What is a checking account?

A checking account is an account that can be opened through banks, credit unions, etc.  Here the individuals as well as businesses deposit money as well as withdraw money from an account which is federally protected.  Though the terms of a checking account may vary from one bank to another, the account holder can use the personal checks instead of cash to make payments.  The account holder could use either ATM cards or the electronic debit cards to do the cash transactions.

Most banks offer the checking account facility to their customers.  There could be a requirement of a minimal deposit initially to start a new account.  The banks will require address proof as well as proof of identification.  Students as well as those who belong to the low-income groups could opt for a no-frills checking account where there will be no charge for the use of personal checks as well as other services.  Some states have made provisions to offer a lifeline checking account option for their senior citizens.  This kind of a checking account will waive off most of the fees such as surcharges for ATM usage as well as the monthly service fee for maintaining low balances.

Typically a checking account has to keep track of the deposits and withdrawals carefully.  The account holder has checks containing all the relevant information and has a supply of official checks.  Checks filled out correctly would be treated as cash by the recipient and the transaction would be complete.  After the recipient deposits the check into their account a bank staff will file the check electronically and the account holder’s bank will receive this cancelled check as well as the amount to be withdrawn from the checking account.

Account holders will be responsible to keep track of the availability of funds while the bank will issue account statements periodically.  While writing checks the account holder must ensure that there are sufficient funds before issuing checks and at no time should the amount written on the check be higher than the amount that is available in the checking account.  This in turn would attract numerous fees and the checking account holder might also face legal action. At such times, the recipient of the bad check can demand that the cash be paid immediately.  The fee charged on the returned check would also be returned to the recipient.  Some banks may protect their clients by providing an overdraft facility and then intimating the account holder that an overdraft had taken place.

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