What are the essential things to know about checking account?

Another service offered by financial institutions such as banks and credit unions is a checking account. These  are services which enables people and individuals alike to save money and at same time withdraw money from the aforesaid financial institution. The conditions of an account vary in different banks, but generally an account holder may choose to pay loans using checks rather than cash which seemed to be the fashion in the world today. Individuals can opt to also use debit cards or ATM cards for the same function.

Checking accounts are not ideal if one wants to earn interest neither for the purpose of saving money. These accounts are use for the convenience of the business or personal clientele; thus not intended to bear interest.  Instead, a customer can deposit or withdraw any amount of money any number of times, subject to availability of funds.

The usual checking account is used through cautious allocation of withdrawals and deposits. The checking account holders have check books which contains all the important routing and mailing information such as the check number and the routing number. When this piece of paper is filled out properly by the account holder, the addressee use it like cash, thus it can be used to transact.  Hence a checking account can also be use for online purchases, which in this sense it can also work like a credit or debit card.

After the check is deposited to the receiver’s bank account, the receiving bank records the check automatically and the check writer’s bank debits the amount from the latter’s bank account. This procedure repeats for every check issued.

Monitoring the available funds is an ultimate responsibility of the account holder, considering the fact that the bank shall also notify the account holder via accounting statements. The amount of money written on the check should at least be tantamount to the  deposited value of money in your checking account otherwise a check written in the value above the remaining balance, would mean numerous fees and possible legal action for the check writer.

The receiver of a bouncing check can stipulate urgent money payment for the initial amount issued and considerable amount for the check returned. Other financial institution has the courtesy to override the lacking amount by paying for it instead then the bank shall then inform the one who wrote the check than an overriding was done. Usually, the bank will make good of their losses by having the one who wrote the check pay some sizeable service charges thus it is essential to be knowledgeable on the current amount prior to issuing a check.