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Simple Ways to Manage a Checking Account
While you might not often find yourself writing out an actual paper check, you still need a checking account. Having a checking account makes it much easier to get paid and pay your bills. Your debit card enables you to access money through ATM withdrawals and online transfers.
At some point, everyone will need to open a checking account, so it’s important to how to use one. Here’s a few easy-to-follow tips and rules to keep in mind when opening and managing your checking account.
What to Know Before Opening a Checking Account
Most banks offer a variety of checking account options, so it’s worth having a clear understanding of exactly what you intend to get out of your account. Some things to consider when choosing a checking account include:
- Is there any minimum balance required to open an account?
- Are there any limitations on checks or debit transactions?
- Do you want a checking account with or without overdraft protection?
- How much does it cost to use this account on a monthly, yearly, or per transaction basis?
- How much money is needed to open a checking account that pays interest?
Take Charge of Your Records
Because it is a transactional account, funds can flow in and out quickly. It can sometimes be hard to keep track of them all, and if you don’t know what’s going in and out of your account, it will be difficult to manage it. While it might seem tedious, recording each transaction made will not only allow you to manage your account properly, but also instill good financial discipline.
Balance Your Account Regularly
Balancing your account helps you stick to your budget and helps you avoid unnecessary charges resulting from bounced checks or overdraft fees. You can do this by manually comparing your monthly statements with your own records to make sure they balance. This also helps you spot any errors in the system, such as incorrectly charged fees.
Keep Your Account Information Protected
Unfortunately, financial fraud remains a reality in our world. Don’t take the safety of your account information, especially your PIN numbers and online banking passwords, lightly. In particular, be cautious about official-sounding requests for such information. These are often phishing scams as a legitimate financial institution will never ask you for such sensitive information in this way.
Simple actions to help you protect your money include checking your account regularly for fraudulent or erroneous charges, never sharing your banking information with anyone, and never accessing your financial accounts using public wifi that isn’t password protected. Additionally, if your debit card is stolen, report it immediately. You can call Member Services at (800) 666-0191 to report lost of stolen cards, or any unusual activity in your accounts. Check out our Security Center for more information.
Give Yourself a Cash Cushion
While we understand that this is not always possible, it is good practice to always give yourself some breathing room in your account. Emergencies always happen without warning, so it’s always a good idea to ensure you have a readily accessible cash on hand. This is not only good practice for managing your checking account, but for your overall finances as well. Make a plan for emergencies by setting up an emergency fund. One useful tip is to set up online alerts when your account balance falls below a certain level. Setting up these Account Alerts is quick and easy. Account Alerts monitor your account every 10 minutes for new activity, ensuring you have real-time account information right at your fingertips.
Understand the Effect of Funds Availability
Under federal regulations, financial institutions are obligated to disclose their funds availability policy to their customers. The funds availability policy refers to how long it takes after you make a deposit for your funds to be available in your account. In general, electronic deposits, cash deposits, and certain types of checks (such as cashier’s checks or U.S. Treasury checks) are available within one business day. However, other types of checks may take a few business days to process, depending on your bank or credit union.
A common mistake that people make is not factoring in funds availability when managing their accounts. This is a mistake that can lead to overdrawing your account and overdraft fees. It’s also why keeping a cash cushion in your checking account is so important.
Here at Stanford, we offer two different types of checking accounts, including a free checking account. Each gives you access to a variety of online and mobile banking tools, so be sure to contact our team today to discuss which option is best suited to your needs.
