What is a checking account?
A checking account is a federally protected account through a bank or credit union that you can deposit and withdraw money from. You are given ‘checks’ which are security enabled pieces of paper that you can use to make payments. Most financial institutions also offer an ATM card and/or a debit card.
Where can I get one?
Walk into any financial institution and ask. Some banks require minimum deposits to open an account, but virtually all banks and credit unions have checking accounts available. There are even checking accounts available via online banks. Online checking accounts can make it harder to access your funds, but many off other perks that make them worthwhile to you.
Why use a checking account?
Bank accounts can provide a neat and tidy way to track your finances. You can use them for cash deposits, checks and money orders, fund transfers, and even cashless transfers at store (via ATM or debit cards). Put simply, they can save you the hassle of carrying around large amounts of cash while giving you a list of your comings and goings every month.
Basic Blank Check
|123 Main Street||Date____|
|City, State Zip|
|Pay to the|
|Order Of _______________________________________________||$|
|YOUR NEIGHBORHOOD BANK|
|For ___________________ ___John Doe___|
||123456789| 123456| 0101||
Above is a basic blank check. Its not very pretty because I made it in excel then copied it over. Still, it gets the basics across.
The Blue is your personal information. Sometimes your driver’s license number or phone number may be at the top. Its sort of up to you, what you want there. I would recommend not putting your social security number on your checks as that would set you up for identity theft if you ever misplaced your checkbook, or wrote the wrong person a check.
In pink we see the value of the check. The box with numeric dollar amounts should match the written version on the line below the name of the person or company you are giving the funds. I remember being told that if the numbers do nto match a bank will not take the check. I also start writing at the beginning of the line, and mark throu any space that I don’t use so no one can modify the amount of the check. It might be easy to add a digit to the number box, but its much harder to add in a word.
The bank information (routing number, account number, and check number) are in green at the bottom right side of the check, as well as the top left corner. The check number makes it easy to keep a ledger of your spending. Even though many people do not use checks as a way of payment, it can be useful to mark transactions with numbers like a check.
The FOR line is handy for including account numbers when sending payments to credit cards or utilities, as well as personal notes like “Birthday present” or “Groceries” or “Auto.” This is can make categorizing purchases easier when it comes time to budget.
And of course, your very own John Hancock goes in the bottom right corner.
How useful are checks?
Well, they can be very useful. When I first had an apartment, I used checks for all of my utility payments, as well as my rent. They kept a written record of payments, and made it easy to have each roommate’s money accounted for. We would divide the bills, write how much it needed to be on a marker erase board, then pin our checks to the fridge. It was easy to see who paid, and since we each put the utility account number on our checks we never had any problems with not getting the company paid.
In addition, some people enjoy the convenience of a debit card, while needing the written record of a check. A check can be filled out (not signed) for transactions and marked with a large VOID across the check. This is very useful for financial newbies. Granted, you can just use the checkbook registar and enter in debit transactions, but I have in the past entered info into a check for record keepign purposes.
Banks will also send you the processed checks for your records. (Some banks also send copies of the original document, or just make scanned images available unless you request the original document.)
There are your basics. Any questions?