What are the basics of checking account all need to know?

In North America and many other places, a transactional account is also called as a checking account. Offering quick and secure access to funds needed frequently, it is a deposit account that consumers may hold with a bank. The best part about holding such an account is that money can be reached as frequently as demanded. The sole aim of a transactional account is to give the consumers convenient handling of money either for business purposes or when dealing with a personal client. It does not offer the account holder any interest benefits or savings. Customers have the opportunity to deposit their money irrespective of the value, any number of times.

For the benefit of consumers, tracking a checking amount is simple as most banks or financial institutions offer a passbook or bank statement to help do that. These documents provide details of the financial transactions as itemized lists. Transaction account holders are free to receive and make payments in a number of ways. This includes via cash money involving banknotes and coins, money order and cheque, direct debit and giro. Consumers can also conduct transactions as standing order, through an ATM card or debit card and an International transfer from one account to another called as SWIFT. Though most of these modes are applicable to nearly all financial institutions, certain terms and conditions of withdrawal and deposit may differ from bank to bank.

The appropriate posting of withdrawals and deposits allows an account holder to maintain his/her checking account without any hassles. Depending on the bank in question, consumers may be needed to have a certain minimum amount deposited before they start a new account. The bank could also ask for an identification or residential proof. A no-frill checking account is offered to individuals having a low income and it does not require them to pay fees for employing personal checks along with additional services. A handful of banks also provide interest payment benefits that allow the account holder to maintain a high balance as the minimum amount every month.

Though most banks issue timely statements, in the end, it is the duty of the checking account holder to stay upfront about his/her available funds. Consumers must not misappropriate checks and it should be against the amount of money in the checking account. Upon issuing a check that has a value higher than the account holders’ balance in the checking account, the individual writing the check may have to pay a number of penalties and in rare cases could also face legal action.

A number of banks are known to safeguard a checking account holder by helping make correct and timely payments. More often than not, consumers must refrain from writing checks when they are unaware of the balance in their account as in a number of cases the bank earns back the losses incurred via significant service charges.