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What Is a Checking Account?

Your checking account will allow you or your business to deposit money and withdraw funds from a bank account that is insured by the Federal government. The terms of a checking account will vary widely from bank to bank, but there are a few general facts about these accounts that don't vary. For instance -- a checking account holder can use personal checks printed by the bank and personalized to the user in place of cash for payment. The holder of a checking account can also use electronic debit cards or ATM cards to access their individual accounts and make payments or take out cash withdrawals.

How Do You Open a Checking Account?

Every bank offers some form of checking account service to their customers. Be aware that some banks require a small initial deposit before a customer can establish a new account. Other things you'll need to bring along when you open a checking account are proof of identification and proof of your address. Any government-issued ID (such as a passport, driver's license, state ID, etc) will work for identification, and proof of address can be a power bill, a pay stub, or something else official with your name and your address on it.

Special Checking Accounts

Some banks offer special types of checking accounts for specific types of customers. Lower-income customers or customers with credit issues (like students or other people with little credit history) may have access to "no frills" checking accounts which don't charge fees for certain aspects of the account in exchange for a limited checking account experience. If you're interested in earning extra interest, you can find checking accounts that pay a higher interest rate in exchange for you maintaining a certain minimum balance each month. There's also something called a "life line checking account" or "senior checking account" option for older citizens and certain low-income customers. This type of checking account waives just about all the fees a bank may normally charge -- including monthly service fees for keeping a low balance and surcharges for a certain number of ATM uses each month.

How to Maintain a Checking Account

A checking account is really just a series of deposits and withdrawals. To maintain your checking account and avoid earning black marks on your credit history by defaulting on a bank account, you must keep track of your checks, debit card uses, and deposits to make sure that you keep a positive balance.

A check works like this -- when you write a check for goods or services, the recipient treats that checks the same as a cash payment and completes the transaction. After that check is deposited into the recipient's bank account, a bank employee files the check electronically and the check writer's bank works out the amount to be withdrawn from the check writer's account and "processes" the check. This happens every time a check is written and transmitted against any checking account.

How to Keep Track of Your Checking Account

Most banks offer a number of different ways for their checking account customers to check their account balances and make sure their records are correct.

Routine methods include the release of printed monthly statements of debits and credits, or withdrawals and deposits. These paper statements are mailed to you monthly, or available online all the time. ATM machines even offer an option to check an account balance, and many banks have phone-in centers where you can use an "automated teller" for certain updates and transactions. You can compare your own list of checks you've written with the list of checks that have already run to determine how much cash is actually available in your account.

As long as you are a responsible checking account holder and you maintains good records of your transactions, you should be able to keep a minimum balance in your account and avoid penalties.

A checking account is just about the safest and easiest way of paying bills and dealing in money. Everything from direct deposit of your payroll check to using Paypal to shop online requires a checking account. Sure, savings accounts are good for adding interest, but a checking account allows you to make everyday transactions like paying rent and bills or purchasing everyday items.