You may be wondering the big “why” question when you read my headline. Let’s start with convenience. You can pay your bills. You can gift money at birthday time. Your bank will often do free notary service. If you have more than one account, you can easily transfer money from one to another.
Yes, that are many ways to pay for things today. Paying your utility bill via an automatic deduction from an account is wise—think about travel and illness. You could forget or you could be unable to place a payment in the mail or even call it in. You don’t want your utilities cut off.
But there may be rent, mortgage, taxes, auto and house insurance, a deposit that needs to be made, something that needs a paper trail to it. In years past, it was typical to get monthly bank statements with all your canceled checks within them. Many don’t. You can request the snail mail statement that would include copies of your canceled checks.
Today, most get their statements are online—meaning that if there are items that you need an actual copy of you, you have to print them out.
My tip would be that if you are claiming anything on a 1040 or business tax return, keep a paper copy for seven years. As each year ages, then shred old records.
Before you set up an account, you need to find a bank or a credit union that is the right fit for you.
Shop Around
· Ask people about their experiences with their bank. Would they recommend their bank to someone else?
· Find out what kind of fees the bank charges. Some banks charge a fee if the account gets below a certain amount.
· What kind of fraud protection does the bank have?
· How does the bank handle overdrafts?
· What would the bank do if your credit card with said bank was hacked or stolen?
· What is the grace time to discovery if there is fraud against your account?
· How much time would you have to notify the bank of any discrepancy in your account—i.e., a missing deposit; an erroneous charge; or anything that you know to be amiss.
· Are personal accounts wear dated? Meaning that a check needs to be cashed or deposited within a specific timeframe? If it’s past the date printed the check then the check is no longer valid. Did you know that?
How to Open a Checking Account
When you open a checking account, the bank will want to know a whole lot about you. You will have to provide:
· Proof of your identity –usually two forms- a drivers license or passport and a credit card with your name on it.
· Your current address.
· Make an initial minimal deposit.
Designing Your Check
The person helping you open your account will give you several checks to last until the ones you order come in. You can order from the financial institution or an outside service. Companies like Costco usually have discounted services for members that will be lower than what a bank will charge.
If you have your first name on your check. Use your initials when you sign your checks. Or, if you use your initials on your checks, sign them with your full name. It’s common to ask for verification if you give a check to a company—that’s when a driver’s license comes in. Does your name on it match your check?
Do not put your telephone number on your checks because every time you put a check out you open yourself up to robot and spam calls. If the receiver of your check requests it, simply add it below your phone number.
How to Write a Check
When you write a check fill in all the lines. Know that the written amount takes precedence over numbers. A bank will not honor a check if the numeral blank is not filled in ANY the written amount blank is not completed, including any cents.
And, make sure that your signature is uniquely yours.
Patricia Lane Williams, CPA has worked with thousands of men and women sounding the warnings. She is the author of the Amazon bestseller, Money: Get It. Save It. Grow It … Before Debt Steals It. It’s her first book in the Four Corners Prosperity series. Her website is www.PatWilliamsAuthor.com.