Source: BALANCE Financial Guide
A checking account is a contractual relationship between you and your financial institution, with each party having specific responsibilities:
Rejected or Bounced Checks
If you write a check for more than is in your account, the check will be rejected when it comes in for payment. It will be sent back to the person who deposited it and you will be charged for “bouncing” it. The merchant you wrote it to will not only charge a returned check fee, but the law enables the merchant to charge you for up to three times the amount of the check. In addition, you may be subject to court proceedings and be required to take special classes on money management. One bad $12 check could cost you a lot of money!
Do not write a check before you make a deposit, counting on the “float” time. With the electronic nature of banking, a check can clear the financial institution the same day you write it.
Many financial institutions will offer you overdraft protection through your credit card or
savings account. When you write a check for more than is in your account, the overdraft protection will kick in and the check will be covered. There is usually a fee charged for this service.
Online Account Access
Many financial institutions offer account access via the Internet or a mobile app. This service is usually free of charge, and is a convenient way to keep track of your transactions.
The ability to transfer funds, receive and pay bills, place a stop payment on a check, and downloadable financial management software are also commonly available online services.
Keep track of your deposits (credits), or checks you write, debit card charges, ATM withdrawals, and fees (debits) in a check register. Record the following information for checks you write:
Balancing Your Bank Statement
Each month your financial institution will send you a statement detailing the activity in your account. This includes all the checks you wrote, ATM withdrawals, deposits, debit card charges, fees and any other activity on your account during the month. It is important that you carefully review this statement to make sure it agrees with your records. Mistakes can be very costly!
Steps to Maintaining a Balanced Account (if using a check register)
Our BALANCE Financial Guide is dedicated to helping you balance life’s important decisions.