Using a Checking Account

Of all the services your bank offers, you will probably use your checking account most often. Whether to pay the rent, buy groceries, or cover utility bills, it's an easy, reliable way to pay your bills. That's because checking accounts let you authorize the transfer of funds from your account to someone else's either in writing or electronically.

How does checking work?

The basics of checking are simple: When you deposit a check or cash, the amount is credited to your account. Then you can write checks against your balance or transfer some or all of your money to a different account. Some checks you deposit are credited to your account the next business day, which means you have access to the money within 24 hours. In some cases, you may have to wait up to five business days for out-of-state checks or checks for large amounts to be credited to your account.

Bouncing a check

Your bank won't honor a check when there is not enough money in your account to cover the amount you wrote it for. Not only are you charged a fee by the bank — sometimes as much as $35 — your credit history can be affected as well. And the person or company that has deposited your check is also usually charged a fee.

Some banks offer overdraft protection, a special line of credit that pays your checks with a loan to you when there isn't enough money in your account. You'll pay interest on the amount that's transferred from the line of credit to your account, but you'll avoid the returned check fee, potential embarrassment of having a check returned for insufficient funds, as well as any potential damage to your credit rating or history by having a check returned unpaid.