How to Write a Check

How to Write a Check Economics - Auwers

Vocabulary • DDA (Demand Deposit Account) • Payee • Signatory • Written amount • Number amount • MICR encoding • Route and transit number • Account number • FDIC • Overdraft • Fees • Reconciling your account • Endorsement • Stale dated

Why a checking account? • Checking accounts make it easy to access your money because you are allowed unlimited withdrawals – hence the name DDA or demand deposit account. • Checking accounts help you keep track of how you are spending your money making it easier to budget. • Maintaining a checking account without overdrafts can help you establish good credit. • However, it is your responsibility to maintain your balances to avoid fees which are very expensive and damage your credit report.

Step One • Start by writing the date and the payee When cashing a check it must be less than 6 months old or it is considered stale dated. http://banking.about.com/od/checkingaccounts/ig/How-to-Write-a-Check/1write_a_check_step2.htm

Step Two • Now write the amount of the check in the numerical line $___________...

Step Three Write - out the dollar amount next; this is the amount the bank will use to cash the check !

Step Four • Now it’s time to sign the check on the signature line and write in the memo if you choose to …Never sign the check before it is totally made out. A blank check that is signed is available for anyone to use!

Step Five • When cashing a check your signature or endorsement is required on the back of the check. • TIP • Keep your signature the same once you begin signing legal documents. • Never use pencil or erasable ink as the check could be altered .

Step Six • Keeping track of your deposits and checks is called reconciling your account . It means you are checking to see that the bank has properly encoded (MICR) your transactions. • If asked by the bank the MICR encoding is read as follows: first the route and transit number (this shows the Federal Reserve Branch and the institution’s number) • The middle set of numbers is your account number • The last number is the number of the check that was written. • The same is true of the deposit tickets…

The Process of Recording Keeping accurate records is very important!

How to Write a Check