The Complete Guide To Checking Accounts

Opening a checking account is often a key step in managing everyday finances. While it’s a simple process, it’s important to understand the different types of checking accounts that may be available to you and exactly how to use and manage the account once it’s established.

The following guide provides a comprehensive overview of everything from how to open a checking account to how to use checks, debit cards, and automatic teller machines (ATMs). You’ll also learn about common fees, tips for reconciling checking accounts, and more.  

Checking 101: Understanding the Basics

A checking account is a type of bank account that allows easy access to funds for daily transactions. It’s typically used for paying bills, making purchases, and withdrawing cash, as well as depositing funds through a bank teller, ATM, or direct deposit. Many checking accounts come with a debit card, allowing for easy transactions in stores, online, and through ATMs. They also allow the use of paper checks.

Benefits of a Checking Account

Checking accounts have several key benefits that make them an important tool for financial management. These include:

• Convenient access to funds: Checking accounts provide quick access to money, making them ideal for depositing funds and paying for everyday expenses.
• Online and mobile banking: Many checking accounts come with online and mobile banking tools, allowing users to conveniently manage their accounts, pay bills, and transfer money. 
• Automatic bill pay: Checking accounts make it easy to set up automatic payments for recurring bills, helping to avoid missed payments and late fees.  
• FDIC insurance: Many checking accounts are FDIC-insured up to the legal limits, offering additional security if the bank fails.
• Overdraft protection options: Many banks offer overdraft protection options, such as linking a savings account or a line of credit to a checking account, providing an additional layer of protection against unintentional overdrafts. 

Opening an Account

While each financial institution may vary slightly, in general, the process for opening a standard checking account is the same. Certain other types of accounts, such as those for students and teens or non-residents, may have additional requirements. 

Standard Checking Accounts

When opening a checking account, expect to provide the bank with standard information and documents, including:

• Date of birth, Social Security number, and contact information
• Government-issued photo ID (driver’s license, military ID, state ID, passport, or passport card)
• Secondary ID (such as a Social Security card, individual taxpayer identification number, alien registration card, or permanent resident card)

Some checking accounts may also require an initial deposit, which you can make using cash, a check, or a transfer from another bank account.

Accounts for Students & Teens

While the minimum age may vary by state, generally, you must be at least 18 years old to open a checking account in your own name. However, there are options for minors.

A parent or guardian can set up a custodial account for the benefit of the minor. The adult maintains control of the account until the minor reaches legal age (typically 18, 19 or 21, depending on the state). At that time, the account becomes the beneficiary's and they are free to use the money as they see fit.

Opening a custodial account for a minor typically requires:

• The minor’s name, date of birth, and Social Security number
• The parent or guardian’s Social Security number, contact information, and photo ID
• An initial deposit (if required for the account type)

The second option is a joint account, which allows the child to access the funds while they are still a minor and allows the adult to maintain some control after the child reaches the age of majority. In this case, both parties have equal rights to the funds and can make deposits and withdrawals. However, depending on the account, the adult may be able to limit or supervise the minor’s activity until they come of age. 

Joint Checking Accounts

A joint checking account is owned and controlled by two or more people. Each owner has equal rights to make deposits and withdrawals without consent of the other owners. All owners may also receive checks and a debit/ATM card. Joint accounts are commonly used by couples, teens and their parents, and elderly adults and their caregivers.

To open a joint checking account, each owner must typically provide:  

• Full name, address, phone number, date of birth
• Social Security number
• Government-issued photo ID

If opening the account in person, the bank may require the presence of all owners. If opening the account online, expect to upload a copy of each owner’s photo ID. The bank may also require an initial deposit.

Accounts for Non-U.S. Residents

Non-residents living in the United States can typically open a U.S. checking account without a Social Security number by using an alternative, such as an individual tax identification number (ITIN). The required documentation typically includes:

• Official, government-issued photo ID (some banks may require two forms of ID)
• Proof of address (driver’s license, paycheck, or copy of lease agreement)
• Unique identification number (Social Security number, alien ID card number, or ITIN)
• Opening deposit (if required for the account type)

The bank may require non-residents to open the account in person rather than online.

Using Checks

While paper checks are not as common as they once were, they’re still useful in a range of situations, such as paying rent, making large purchases, or gifting money. Knowing how to read and write checks is an important part of responsible money management.  

How To Read Checks

Reading a check is a simple process if you know how to decipher the information in the following sections: 

• Date: Located in the top right corner — this is the date the check is written.
• Payee line: This line specifies who will receive the funds.
• Amount box: The numerical amount being paid.
• Amount line: The payment amount written out in words.
• Memo line: This optional section may include notes, such as the purpose of the payment.
• Signature line: The signature of the account holder, which authorizes the payment.
• Routing and account numbers: Printed at the bottom of the check, these numbers identify the bank and account from which the withdrawal is coming.

Before depositing a check, double-check that all information is accurate and legible. If any details are incorrect, reach out to the check writer for a correction. This step may prevent issues such as processing delays or a declined deposit.

How To Write Checks

Even those who do most of their banking electronically may find themselves in a situation where they need to write a check. Following a step-by-step process may help ensure it's done correctly.

1. Date the check: Write the current date on the line in the top right corner.
2. Add payee name: Write the name of the person or organization authorized to deposit or cash the check.
3. Write the payment amount in numbers: Complete the amount payable in the box on the right of the check.
4. Write the payment amount in words: Write out the amount payable in words. Make it legible and draw a line after the remaining space.
5. Add a memo: While this is optional, it may help you remember the purpose of the check.
6. Sign the check: Sign your name on the signature line in the lower right corner. Don’t forget this step, as the recipient can’t cash the check unless it’s signed.
7. If you make an error while writing a check, write the word VOID in large letters across the front in ink. Record it in your checkbook, then write a new check with the correct information.

Making Deposits

There are several ways to deposit funds into a checking account, including depositing checks and cash and receiving funds through direct deposit.

Signing Checks

A recipient must properly endorse a check before cashing or depositing it. While this may seem simple, there are several vital steps. First, double-check the information to confirm the date and amount are correct. Then, verify that you are listed as a payee and that the payer has signed the check. If the check is written to more than one person, review it carefully to determine who needs to endorse it.

Finally, sign the check in the box on the back that reads Endorse Here. Use permanent ink and sign your name exactly as it’s written on the check. Some checks have a checkbox for mobile deposits, and some banks require specific wording when endorsing a check for mobile deposit. 

Using a Deposit Slip

You'll typically need to complete a deposit slip when depositing cash or a check at a bank branch. These are usually located at the back of the account’s checkbook. Blank slips are also available at the bank. When completing a deposit slip, follow these steps:

1. Date the slip: Write the date in the space provided.
2. Add your name: Write your full name exactly as it’s listed on the checking account.
3. Fill in the account number: If using a blank deposit slip, add the account number of the checking account receiving the deposit. For slips that come with a checking account, the account number is prepopulated.
4. Indicate the account type: Check the box to indicate whether the receiving account is a checking, savings, or business account.
5. Indicate the amount of cash deposited: Add up the total cash deposit and write it on the Cash line.
6. Indicate the amount of checks deposited: List all checks to deposit in the space marked Checks.
7. Complete the subtotal: Add up the total cash and checks and add this to the Subtotal line. 
8. Indicate any cash back: If taking cash back, add the amount in the space marked Less Cash (or similar).
9. Calculate the total: Subtract any cash received from the subtotal and put the final amount in the section marked Net Deposit or Total (or similar).
10. Sign the deposit slip (if required): Some banks may require a signature on the deposit slip.

Direct Deposit

A direct deposit is an electronic transfer of funds that replaces the need for a paper check. Many employers offer direct deposit for paychecks. 

While the specifics may vary depending on the payer and the bank, the process for setting up a direct deposit is generally the same:

1. Complete the direct deposit form: The payer will provide a form that typically requires details, including your name, address, Social Security number, and signature. In some cases, employers may set up direct deposit electronically through the company payroll provider instead of using a physical form. 
2. Provide account information: Add the account number and routing number for the account receiving the direct deposit.
3. Attach a voided check: Many providers require a voided check from the receiving bank account.
4. Sign the form: Some forms may require a signature.
5. Submit the paperwork: Follow submission instructions to provide the completed form and voided check to the payer. 
6. Be sure to check the bank account to ensure receipt of the expected deposits. If there is a discrepancy, contact the payer as soon as possible.

Using a Debit Card

Debit cards offer a quick and convenient way to access funds in a checking account. They are widely accepted for everyday purchases and are often used instead of cash or checks.

How Debit Cards Work

Debit cards are linked to a checking account. When used to make a purchase, the funds are withdrawn directly from the checking account balance. To use a debit card, simply swipe, insert, or tap the card and enter the personal identification number (PIN) or sign the receipt to authorize payment. Debit cards are widely accepted by many places that accept credit card payments, and are used for purchases both online and in brick-and-mortar locations.

While many debit cards double as an ATM card, they are not the same. A standard ATM card is only authorized for ATM transactions and is not authorized for purchases.

Credit Cards vs. Debit Cards

They look similar, and both are used for purchases — however, there are some significant differences between debit and credit cards. Debit cards allow you to withdraw money directly from your checking account, making them a good option for managing daily spending without incurring debt. Purchases made with debit cards do not incur interest charges and do not help build credit. Withdrawals are also limited to the amount available in the checking account.

On the other hand, credit cards allow borrowing up to a set limit, with the option to repay the balance over time. Using a credit card may help build credit. However, if it is not paid off before the end of the grace period, purchases may result in interest charges.

Using ATMs

Automatic teller machines offer a convenient way to access funds, check balances, and make deposits without visiting a bank branch. They're readily available in various locations, including at banks, grocery stores, convenience stores, and more. Many are also available 24/7, offering services to account holders when and where they're needed. 

Making Withdrawals

To withdraw cash from an ATM, insert the ATM card into the machine and enter the PIN. Then, choose Withdrawal and select the appropriate account. Enter the amount you wish to withdraw and confirm the transaction. Then, collect the cash and paper receipt (if requested).

For your security, choose an ATM in a well-lit, safe location. Remain aware of your surroundings and protect your PIN from prying eyes.

Depositing Checks

While many account holders think of ATMs as a place to access cash, there are other surprising ways to use ATMs. For example, many machines accept deposits. To deposit a check into an ATM, ensure the machine accepts deposits and is part of your bank's network. Then, insert the debit card and enter the PIN. Select the Deposit option on the screen and follow the prompts to deposit the check. Make sure to properly endorse the check before inserting it into the machine. Confirm the check amount displayed on the screen is correct, complete the transaction, and take the receipt.

Understanding Fees

While checking accounts are convenient, they often come with fees that can quickly add up and reduce account balances. Knowing what to expect and how to avoid common charges may help keep costs down.

Common Bank Fees

Banks may charge various fees for services related to checking accounts. Here are some of the most common bank fees: 

• Monthly maintenance fees: Some banks charge a fee for keeping a checking account open. Many will waive this fee if you meet certain requirements, such as maintaining a minimum balance or setting up direct deposit.
• ATM fees: Using an ATM outside the bank’s network may lead to additional charges, both from the bank and the ATM operator.
• Non-sufficient funds (NSF) fees: If a check or payment is returned due to insufficient funds in the account, the bank may charge an NSF fee.
• Paper statement fees: Some banks charge for mailing monthly paper statements rather than providing electronic versions.

Overdraft Fees

An overdraft occurs when a transaction causes the account balance to go negative. When this occurs, the account may incur overdraft fees. Account holders can add overdraft protection, which allows the bank to pull from a linked secondary account or line of credit to cover the overdraft, avoiding the overdraft fee. 

Overdraft fees are one of the more common bank fees and they have the potential to add up quickly. However, you may avoid this by carefully monitoring account balances.

Managing Your Account

The frequent flow of money in and out of checking accounts makes it important to review and monitor the accounts properly. Doing so may help you stay on top of daily expenses and avoid unnecessary fees.

Reviewing Your Statements

Bank statements provide a detailed record of all transactions, helping account holders track their spending and spot any errors or unauthorized activity. Reviewing the statement each month allows you to track spending, identify errors, and monitor the account for fraud.

Many banks offer digital statements, providing a convenient way to review them online. Online and mobile banking also gives account holders the opportunity to review transactions in real-time, providing additional information between monthly account statements. 

Monitoring Account Balance

Closely monitoring the account balance may help prevent overdrafts and allow checking account holders to effectively manage cash flow. Online and mobile banking platforms provide real-time access to account balances. Account holders can also set up alerts for low balances or large transactions, making it easier to know when to adjust spending. Frequently checking account balances may help prevent unexpected shortfalls, especially after large purchases or bill payments. 

Checking Accounts vs. Other Common Accounts

While checking accounts are ideal for managing everyday spending, other types of accounts may help with different financial goals. Understanding the differences between checking accounts, savings accounts, and money market accounts may make it easier to choose the right option for specific needs.

Savings Accounts 

Savings accounts are designed for storing money that isn’t needed for daily expenses. Unlike many checking accounts, savings accounts often offer interest, allowing the balance to grow over time.

Generally, savings accounts are ideal for setting aside funds for future goals, such as emergencies or large purchases. Checking accounts are more appropriate for handling day-to-day transactions. Savings accounts may also limit the number of withdrawals or transfers each month, charging a fee for transactions exceeding the limit. This makes them less flexible for those who need frequent transactions. 

Money Market Accounts

Money market accounts combine features of both checking and savings accounts, offering a blend of flexibility and growth potential. They often pay higher interest rates than standard savings accounts and may come with checks or a debit card, allowing for convenient occasional payments. However, money market accounts typically require a higher minimum balance to avoid fees, making them better suited for those who can maintain a larger deposit.

Second Chance Banking

Occasionally, banks may prohibit certain individuals from opening a standard checking account. This may occur if the individual has a history of numerous overdrafts, bounced checks, or unpaid fees. If this happens, a second-chance bank account may offer a fresh start.

Second-chance accounts function much like regular checking accounts. However, they often come with additional restrictions or fees. For example, they may not allow overdraft protection or may require direct deposits. Despite these potential drawbacks, having access to basic checking services may prevent the need for costly alternatives, such as check-cashing services or prepaid cards.

Enhance Your Banking With a Checking Account

Checking accounts are designed to help simplify everyday banking. Choosing the right account and understanding how to use it may make it easy to handle daily expenses, keep track of funds, and avoid unnecessary fees.

PNC Bank offers several checking accounts designed to meet specific needs. Explore your options now, or connect with a member of our team for personalized advice.