Using A Checking Account

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In most states, before you can open an account of your own, you must meet the following requirements.

• Be at least 18 years of age or married.
• Have a Social Security Number (SSN).
• Be able to show proof of identity such as a driver's license or birth certificate.

If you do not meet these requirements, you can open a joint account with a parent or guardian.

What You Need To Know

• Carrying checks or a debit card is safer than carrying cash, especially when buying something expensive.
• You can deposit or cash checks you receive on birthdays and holidays or from working.
• With an account, you can track what you spend and monitor your transactions by using your check register, monthly bank statement that you receive by mail or your online bank statement. If your bank provides canceled checks or duplicate checks, these can also help you track your spending. Most banks process checks electronically, which means that you will probably receive images of your canceled checks with your bank statement rather than the actual canceled check.
• You may be able to download your checking account activity into a computer budgeting program.

• You have to record every time you put money into your account (deposit) and every time you take money out of your account (withdrawal).
• Each month, you should make sure the amount of money you project you have matches how much the bank indicates you have. That is called "reconciling your account."

Opening Your Account

1. Choose the type of checking account you want, order checks, and decide if you want an ATM/debit card.
   
   
2. Deposit money into your new account using cash, a check, electronic transfer from another bank or a parent's credit card. The bank can show you how to complete a deposit slip for the amount of money you will use to open your account.
   
   
3. Show the bank how you will sign your checks by completing a signature card. The bank keeps this card on file to make sure your checks are not used by another person. Sign each check just as you sign the signature card to make sure the bank will accept it.

Update Register First, Write Checks Second

Using A Check

• Endorse a check only when you are ready to use it. An endorsed personal check can be cashed or deposited by anyone.
• Write only in the endorsement area on the back of the check.
• Sign your name exactly as it appears on the front of the check.
  Note: If your name is misspelled or does not match your signature card, sign it as it appears on the check. Then sign it again, correctly, to match your signature card.

The way you endorse your check tells the bank how you will use it. You can ask the bank to give you cash in return for the check (cash a check). You can deposit the check amount into your checking account (deposit a check). Or, you can use the check to pay money to someone else (sign over a check).

Cashing a check. In return for your endorsed check, you receive cash equaling the amount of the check. You must show a photo ID. It is easiest to cash checks at your own bank, but you may also be able to cash a check at a grocery store. Avoid check-cashing services which charge a fee. For cash, endorse the check on the reverse side like this example.

Depositing funds. After you present a check for deposit, the bank puts that amount of money into your account. The way you deposit your check determines how fast you can use the money.

• Electronic funds transfers are available on the day the bank receives them.
• If you deposit funds from another bank, it may be several days before you can withdraw your money.
• Some banks allow you to make deposits from home using your personal computer (PC) and a document scanner. The bank provides specific instructions on how to endorse the check and complete the process. Check with your bank to see if they offer this service.

You can deposit a check at the bank, at your bank's ATM, or by mail. Make sure you follow your bank's deposit instructions. To deposit a check, endorse it on the reverse side like this example.

Signing over a check. You may want to give someone else a check that was written to you. Maybe you owe a parent or a friend some money. By signing the check over to them, you give them permission to use it. You would endorse the check like this example.

Bad Checks

The following are tips to keep from writing bad checks:

• Make sure there is enough money in your account before you write a check or use your ATM/debit card.
  
  
• Record every check, ATM, debit, and online purchase in your check register and subtract them from your account balance.
  
  
• Keep track of bank fees and subtract them from your account balance as they are charged.
  
  
• Compare your check register with your monthly bank statement as soon as you receive it. If their amount and yours do not match, you should try to resolve it. If you cannot solve the problem, contact your bank.
  
  
• Consider getting overdraft protection so your account is covered if you make a mistake. Make sure you know what the fees are for this service.
  
  

Check Processing

After Tamra deposits Ryan's check, it is processed either by mail or electronically. Within 2 or 3 days or as little as a few hours, the amount of the check ($25) is subtracted from Ryan's checking account balance and added to Tamra's checking account balance. The time it takes to complete this transfer of money is called "float" time.

Should Ashley Float The Check?

A: No way. With electronic imaging technology, Ashley's check could clear in just a few hours and her account would be overdrawn. Never float a check.