29 Jun
2010

You’ve probably had a checking account for years, but there are some things about your account that you probably don’t know (or haven’t thought about):

1) Your money is secure – up to a point. The money in your bank is secured by the government. If your bank goes bankrupt, your money will be protected. However, if you have very large investments or deposits with your bank, not all your cash may be protected.

2) Checks should be used with caution. When you give someone a check, you are giving them some of your banking information and some access to your account, so it pays to be cautious. For example, void checks should only be given to companies that you know are legitimate. With a void check, a company could, theoretically, withdraw more money than you have agreed to or withdraw at different times than you agreed to. While your bank will likely make it right if the company overdraws, that is not a hassle you need. Similarly, if you give post dated checks (such as to your landlord) make sure that you cancel them at your bank if your agreement changes. If you move out early, for example, your landlord could still cash that final post dated check. Always check your account balances at the end of the month to look for unauthorized transactions.

3) You may be overcharged for your checking account. Checking accounts often carry higher fees than many other accounts. Switching to an online account or a different kind of account (most banks have several types of accounts) can save you money each month.

4) You will want to have a savings account and rely on it more than your checking account. Even if you have a checking account, you will still want to open a savings account (preferably a low-fee account). You should not keep large sums in your checking account. Just keep enough in to cover checks, bills, and fees. Keeping most of your money in savings, even if you have to transfer it from time to time to your checking account, will allow you to make some money in interest.

5) It is possible to be denied for a bank account.