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Checking Account Information

A checking account is a convenient way to pay for things. It gives you immediate access to your money without the security issues of carrying cash. It helps track where your money goes because you have a record of your expenditures and deposits and, if managed properly, can make your life easier.

How checking accounts work…
Checking accounts allow you access to the funds in your account at a financial institution. Cash is replaced with a piece of paper that when presented to someone with a written dollar amount and your signature becomes a formal payment. Cash can also be replaced with a plastic card that automatically takes the money out of your account and pays the agreed upon amount. Using a plastic card is more commonly referred to as a cash, debit, or check card.

How to write a check…
Before writing a check, remember the first rule of checking accounts, make sure you have the money in the account. More importantly, write checks for money you already have available in your account. Other rules to remember: use permanent ink (black or blue ink is best) and write legibly.

To write a check, start on the top and work your way down the paper so your ink doesn’t smudge.

1. Date: Always write the date you are writing the check. Once written, checks are a legal form of payment for an indefinite amount of time. Writing the date on the check gives you a recorded time: some financial institutions will not accept a check if the date on it is more than one year old.

2. “Pay to the Order of:” Write the name of the company, person(s), or place to whom you are making payment. If there is additional space afterwards, draw a line to the end of this section. This will help prevent fraud. Also, never write a check payable to “cash”. Should you lose the check anyone who retrieves it would be able to present the check for cash from your account.

3. “$ Box”: Write the dollar amount of the payment in numeric format.

4. “…DOLLARS”: Write the dollar amount of the payment in word format. Start from the far left and write the cents in fraction form. If there is additional space afterwards, draw a line to the end of this section. Please note, this is the legal dollar amount of the check. It is important to note that the numeric and written dollar amounts should be the same. If they are not, the written amount will be considered the legal dollar amount of the payment. You may write the amount whichever way is most comfortable for you, for instance… $1,200 could be written as “One thousand two hundred dollars and xx/100”, or as “Twelve hundred dollars and xx/100”. Once you begin writing checks, continue to use the same verbiage from check to check and remember to be consistent.

5. “Memo”: This is your chance to reference what the check is for, or other relevant information concerning the payment. This field is optional. It does not need to be completed. Many companies request you write your account number with them.

6. “Signature”: Sign your name. Your signature makes the check official. Once it is signed, you have requested payment from your account. Always sign your checks in the same manner, using the same name format. (Don’t use your middle initial on some and not others.) Only sign a check when you are going to use it immediately.

Your check is now complete and ready to be presented for payment. Don’t forget to log the check information in your check register. Keeping a record of your paper checks and plastic payments is crucial for successfully managing a checking account.



Balancing your checkbook…
When done on a routine basis, balancing your checkbook is easy, satisfying, and painless. On the other hand, when not balanced on a regular basis, it could be dangerous to your financial health.

It should only take a few minutes every month to figure out exactly how much money you have in your account.

Gather your deposit and withdrawal slips, your ATM and SmartCash card receipts, your check register, your monthly statement, and a calculator.

Begin by finding the last time you balanced your account in your check register. It should be the last time you received a statement. Then use your monthly statement to verify account activity. Simply check off items that match between your statement and your register using a “√” on both. Go through and match the dates, check number, and dollar amounts of checks you wrote with those that cleared (been paid from) your account. Do the same thing with deposits, ATM deposits and withdrawals, and check card purchases. Once you’ve √’d all the items in your record, verify on your statement if you received any dividends or paid any fees, if so record the transaction(s) in your check register and recalculate your balance. Compare the balance in your checkbook register against the ending balance on your monthly statement. If the amounts are the same, all transactions have posted correctly and your account is balanced. Great job! IF the amounts are not the same, don’t worry, if you use your account on a regular basis, there is more of a chance they will not equal right away. Simply start with the end balance on your monthly statement and add recent deposits that are not on the statement. Then subtract the check, ATM, and SmartCash card amounts that you wrote but have not been paid by the Credit Union. This balance should match the balance in your checkbook. If not, there’s a mistake somewhere. Review your transactions against those shown on your monthly statement to verify everything matches.Try this…

1. Write your checkbook balance    $ ______________
2. Add any account dividends + $ ______________
3. Subtract any service or ATM fees  - $ ______________
4. Your new balance is… = $ ______________
5. Write the end balance on your statement    $ ______________
6. Add any recent deposits + $ ______________
7. Subtract any checks, SmartCash card, or ATM withdrawal amounts that have not cleared  - $ ______________
8. Your new balance is… = $ ______________
Line 4 and Line 8 should be the same. If not, review your information for errors. If you’re still having difficulty reconciling your checking account, please contact the Member Service Department for assistance. They’d be happy to help!

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