Opening and Using Your Checking Account

In the simplest terms, a checking account is a safe place to store your money until you’re ready to use it. You open an account at a bank, begin regularly depositing money into the account, and use that money by writing checks, using your debit card or taking cash out of an ATM. But what does that all really mean? The information below helps break down some of the details of a checking account.

Choosing your account
Picking a checking account can be daunting because there are so many to choose from. There are free accounts, online-only accounts, interest-bearing accounts, joint accounts, student accounts, age-based accounts and even more. Each of them contains different features and benefits, and fees are dependent upon the value of the account. Most institutions have a summary of their checking products on their website as well as inside their branch offices. If you’re not sure what you need or you’re opening your first account, it may be best to go into your local office where a representative can help direct you. You can also check out our helpful Types of Checking Accounts overview.

Understanding fees
Monthly fees vary not only by account, but by financial institution. There are generally ways to waive monthly service fees. Waiving of fees can be tied to any number or combination of things including maintaining a certain daily or monthly balance, completing a certain number of transactions per month or even your current age or status (e.g., 50 Plus or Student checking). There are still banks that also offer a basic, free checking account which carries no monthly service fee. You should also consider other fees such as ATM withdrawals, check printing, overdrafts or returned checks, and more. Ask to see a schedule of fees and charges from any institution that you’re considering to be sure you understand what the account will really cost you.

Opening your account
You can visit your nearest bank branch office to meet with a representative or most banks offer the option to open an account on their website from the comfort of your own home. If you need immediate access to the account, it may be best to visit the branch. When you head to the bank, you don’t need to know the type of account you’d like to open as this can be discussed and decided upon during your visit. However, it’s a good idea to think about what’s important to you ahead of time.

Using your account
Making deposits
Once your account is opened, you’ll want to put money into it which is called making a deposit. You can make deposits in a number of ways including:
  • at your financial institution’s Automated Teller Machine (ATM),
  • inside the branch,
  • through the institution’s Mobile Banking App,
  • or electronically via transfers, Automated Clearing House (ACH) transactions or direct deposit.
Learn more about each of these methods in our Guide to Making Deposits overview.

Checks and debit cards
Typically your account will come with a debit card and you can purchase checks which are universally accepted ways to pay for goods and services.

Debit cards
A debit card is very similar to a credit card. Most have a 16-digit number and a Visa® or MasterCard® logo. They can be used like a credit card for purchases with the major difference being that the money comes out of your checking account right away. You can also use your debit card to make one-time or recurring payments online. You should always be sure that you’re providing your debit card information to a secure and reputable source especially when making purchases on the Internet. Check out our Security & Privacy section for tips to stay safe online.

Debit cards are also what you use to withdraw cash from your checking account through an Automated Teller Machine (ATM). To access your money this way, you'll need to use a Personal Identification Number (PIN) that you will establish when you open your account. PINs provide an added layer of protection if your card is lost or stolen, so you should choose a PIN that would be difficult for someone else to guess. Memorize this number and never share it with anyone.

In addition to using your PIN to make ATM withdrawals, you can select the “Debit” option when using your debit card to make a purchase at a store. You'll need to enter your PIN at that time as well. This option also allows you to request cash back during checkout at most merchants. Alternatively, you can choose the “Credit” option at checkout also referred to as a signature-based transaction. Instead of using your PIN, you would sign your name like you would do for a credit card.

Checks
There are two ways to use checks; writing a check to pay for something or receiving a check from someone which you would deposit into your account.

Let’s walk through how to use a check to pay for something. Here is a sample of a check:


 
 
  • Enter the date in the upper right hand corner. Include the month, day and year (i.e., January 1, 2016 or 01/01/16).
  • Write the name of the person or company you are paying on the “Pay To The Order Of” blank line. Be sure to spell the name correctly.
  • To the right of the “Pay To The Order Of” blank, there is an empty box with a dollar sign. Using numbers, write the amount in dollars and cents. Be sure to place a decimal point in between the dollar numerals and cent numerals.
  • The next available blank line is used to confirm the amount of the check. Write out the dollar amount in words and fractions with the word “and” before the cents amount over 100. If you have any room left after writing the amount, you may wish to draw a line so that no one can add to what you’ve written.
  • The Memo line in the lower left hand corner provides an area to make a note about your payment. You may use it as you wish.
  • The blank line on the lower right hand corner is the signature line. This is where you’ll write your name in cursive (not print).

Here is a picture of the completed check as outlined above:
 


Alternatively, you may receive a check from someone made out to you that you want to deposit into your account or sign over to someone else.

Flip the check over. On the back, there are a few lines on one end that say "Endorse Here." Sign your name exactly the same way it is written on the front of the check.

Endorsing a check just means signing your name on the back. You need to sign the endorsement line in order to claim your money. Once endorsed, there are a number of ways to deposit your check(s) as noted above. Learn more about each of these methods in our Guide to Making Deposits overview.


 
Keeping track of your account
Each month, you will receive an account statement that summarizes your deposits, withdrawals, cashed checks and any fees for the statement period. Even though the bank provides you with this information, it’s a good idea to track activity in between statements. There are free tools available to help with this including online banking, mobile banking apps and a checkbook transaction register which comes with your checks. Remember, you are always in the best position to manage your finances when you are aware of and keep an eye on the transactions that affect your account.

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