One of the most common deposit accounts offered by banks is a checking account. A checking account is one of the most convenient ways of paying goods and services especially if it involves huge amounts. It enables the account holder to pay without the need to bring cash. Thus, it decreases the incidence of theft.

However, as compared to ordinary bank savings accounts, checking accounts are harder to manage. Without discipline and proper management, it can lead you to serious financial trouble. Maximize the effectiveness of your checking accounts with these helpful tips.

Endorse checks accordingly. An endorsed check is just like cash to its possessor. Write instructions on every check, like “for deposit only” or “pay to the order of”. Indicate also if it’s a cross check which usually requires three days before clearing or a post-dated check.

Report theft immediately. If your checkbook is lost or stolen, alert your bank as soon as you realize it’s gone. You may know it the moment it’s stolen, or it may dawn on you until your monthly statement arrives. But act without delay to minimize losses. It’s the bank job to defend your account against invasion by forgery, but you must let them know so they can take action.

Stop payment on checks you shouldn’t have written. It’s legit when you’ve been hood tricked, fooled, or even if you’ve made a simple error and overpaid on your utility bills. Know your bank’s rules on its stop-check service.

Check and balance. Regularly enter each deposit and withdrawal in your check register, and calculate your current balance. This will help you avoid overdrawing or dropping below your minimum maintaining balance. Compare your check register with the monthly bank statement and figure in interest payments, direct deposits, automatic withdrawals, and other fees.

Flag checks that haven’t cleared the bank. Notify your payees and make sure the checks haven’t been lost.

Guarantee payment with certified or manager’s checks. Sometimes it’s necessary to pay by manager’s check depending on the transaction. Make sure you have enough balance to avoid insufficient funds.

Choose a checking account that suits you. If you know you can maintain a healthy balance in your checking account, make sure your account lets you collect interest on it. If you only keep enough to pay the bills, use an “economy” checking account – no penalties for dropping below the minimum maintaining balance. Talk with your banker about which of their checking accounts best suits you.

Debit with plastic. A debit card is considered as a plastic check, not a credit card. Be sure to tally debit card purchases in your checkbook ledger.

Always keep up with your loan accounts. Avoid unhappy surprises by staying current with each loan account you have with your bank. If you’re late with a payment with a loan, the bank may debit your checking account to satisfy that outstanding obligation. One problem will lead to another.

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