Checkbook Tools

Writing a Check

Writing checks is easy, with a little practice. When you write checks, always use a blue or black ink pen and write neatly. Every time you write a check, you’ll fill in the following six areas:

 

Example Checkbook for reference

It is important to write your check legibly to make sure your check is accurately processed.

  1. Date: Write the date.
  2. Pay to the Order of: Write the name of the check’s recipient.
  3. $ Amount: Write the check’s amount using numerals. When you write the number, start at the left and don’t leave space. People could add in more numbers if you do.
  4. Dollars: Write, in words, how much the check is for. When you write the words for the dollars, start at the left side. Write any cents as a fraction. (See sample.) Draw a line through the extra space.
  5. Signature: Sign your name on the signature line, just like it is on the top of the check. Don’t sign it until you use it. If you sign it ahead of time, someone else could use the check.
  6. Memo: Note what the payment is for. (See sample.)

Endorse a Check

If you’ve got a job, chances are you get paid with a check. To deposit that check, you need to endorse it. That means you sign your name in ink on the back of the check. Sign your name the same way it’s written on the check. If your name is spelled wrong, also sign your name the correct way on the next line.

There are a few ways to endorse your check.

Blank Endorsement

Sign your name the same way it’s written on the front of the check. Only sign it when you’re ready to cash it or deposit the money into your account. Once the check is signed on the back (endorsed), someone else could get your money if you lose the check.

Back of check with endorsed signature

Special Endorsement

Do this when you want to give someone else the money. Write “pay to the order of” and that person’s name below it. Then sign your name underneath. Now only that person can cash the check. (See sample.)

Check with pay to the order of name for special endorsement

Restrictive Endorsement

When you want your check to be very safe, such as when you send it to your financial institution in the mail, use this kind of endorsement. Write “for deposit only” and sign underneath. Now the check can only be deposited into your account, not cashed. (See sample.)

Back of check with deposit only written along with endorsement for restrictive endorsement

Do’s and Don’ts

Things Not To Do

Here is what can happen if you write checks without enough money in your account:

 

There are a couple things you need to know about using checks. Here is the first one, and it’s a big one:

 

Don’t write checks for more money than you have in your account. You might have heard it called “bouncing a check,”or “writing a bad check.” The financial institution calls it non-sufficient funds (NSF).

  • You could be charged an overdraft fee by your financial institution.
  • The place to which you wrote the “bad” check could charge you another fee.
  • The place to which you wrote the “bad” check could decide not to take your checks in the future.
  • Your name could go on a risk check or “risk credit” list, and other places won’t take your checks.
  • Your checking account could be closed by your financial institution and you won’t be allowed to write any checks at all. Your financial institution may report this information to other financial institutions, and they may refuse to open a checking account for you for up to seven years after your account was closed.
  • You could get letters and phone calls from the people you owe the money to.

BUT… It’s easy to keep these things from happening. Just keep track of how much money you have in your checking account, and don’t write checks for more than that amount.

Don’t sign blank checks. They can be stolen and used by someone else.

Don’t erase mistakes on a check. Either write VOID across the entire check and next to its number in the check register and tear up the check, or fix the check and write your initials next to the mistake.

Don’t use other people’s checks or let them use yours.

Don’t use a pencil, only use a pen. People can erase the numbers when you write in pencil. Always use a blue or black ink pen.

Things To Do

Keep all your checks in a safe place. Checks are money and can be stolen and used by other people, just like cash.If your checks are ever lost or stolen, call your financial institution immediately!

Keep track of the money you take out of the ATM and debit card withdrawals made—they add up quickly.

Put the right date on your checks.

Sign your name like it’s printed on the check.

Images of Check statements recorded and bank statement of transfers

How to Balance Your Checkbook

Most of the time, your checkbook balance and the statement won’t match. That is normal. This happens because of those outstanding checks we discussed earlier and any deposits that you made after the statement was printed.

Your statement will include a reconciliation form (usually on the back). This is a form to help you reconcile your account. Just like all the other forms we’ve talked about, there are spots for you to fill in.

If you think there is an error in your statement, please telephone or write us promptly at the phone number or address shown on the front of your statement.
Example of how to Balance your Checking Account
  1. List deposits, checks, and other withdrawals that you have written in your check register, but are not listed on the statement in the proper columns.
  2. Write down the total of the deposit list and the checks/withdrawals list.
  3. Write down the ending balance printed on the front of your statement.
  4. Enter the total deposits from line 2. Add lines 3 and 4, enter on subtotal line.
  5. Enter the total withdrawals from line 2 and subtract from subtotal.
  6. Now the balance of your checkbook should match the ending balance on your statement.

Deposit Money in Your Account

You can put cash and checks into your account in different ways. When you’re ready to deposit money at your financial institution, you need to fill out a form called a deposit ticket. You’ll find your deposit tickets in your checkbook, behind the checks. They have printing on both sides. Just like with the checks and the check register, there are areas you need to complete. Use a pen to fill out the form. It is very important that you write neatly. Here are the spots to fill in on your deposit ticket.

  1. Date: The date you are depositing money.
  2. Cash: The amount of cash you are depositing. Add it all together, and write it down here.
  3. Check Entry Area: This is where you write down each check you’re depositing. Put each check amount on its own line.
  4. Additional Check Entry Area: The back also has space for checks, if you run out of room on the front.
  5. Total From Other Side: If you have more than three checks and wrote them down on the back side, add them up and put the total here. If you are depositing three checks, this is the place you write down the third one.
  6. Sub Total: Add items 2, 3 and 5
  7. Less Cash Received: If you want to deposit part of the money, and get part of the money in cash, write down how much you want to receive in cash.
  8. Sign Here: If you want cash back, sign your name here.
  9. Net Deposit: Add all the cash and all the checks together. If you are receiving cash back, subtract that amount. The result is your net deposit. Write down that amount here.

Front Side

Images of checkbook deposit ticket, front side.

Back Side

Images of checkbook deposit ticket, back side.

Review Your Monthly Statement

Every month, you’ll get a statement from your financial institution. This statement tells you:

  • Every check that you wrote (the ones that have been processed— see example on next page).
  • Money you took out of the ATM, transferred by telephone or any other withdrawals.
  • All of your debit card transactions.
  • All of your deposits.
  • Your ending balance (how much you have in your account on the date the statement was printed).

The envelope containing your statement may also contain your canceled checks. You may receive pictures or images of the checks you’ve written, or a paper document or image of a substitute check, (go to page 11). These are the checks you’ve already written that have been cleared (paid out of your account) by your financial institution. Any checks you’ve written that have not cleared are called outstanding checks.

The purpose of your monthly statement is to give you information about your account’s activity every month. Here are the different sections:

  1. Return Address: This is where your financial institution sends your statement from.
  2. Account Information: Here is where you will find your personal information, like the type of account you have, account number and social security number.
  3. Deposits: This is where your deposits are listed. You’ll see the date and the amount of money you deposited.
  4. Checks and Deductions: These are all the checks you wrote for the month. You’ll see the date, the check number, and the amount you wrote the check for. If you see dots or stars between the check numbers, that means either you are missing a check, or that the check is outstanding. You’ll also find your ATM and other withdrawals here.
  5. Daily Balances: You’ll see dates listed, and how much money was in your account on that day. 5 4 3 2 1 9 Review Your Monthly Statement
  6. Ending Balance: Here is a summary of your account for the month. You’ll see how much money you started with, how many withdrawals you made, how much money you deposited, and how much money you have left in your account.
  7. Customer Service Number: This is the phone number you can call if you have

Remember, if there is something you don’t understand about your account, call the number you see on your statement to get your questions answered by your financial institution’s customer service.

Image example of withdrawals from checking

Manage the Money In Your Account

A check register helps you keep track of the money in your checking account. That’s where you write down everything you do with your account. Whenever you deposit money or withdraw money, or use your ATM or debit card, write it in the check register immediately.

When you write something in your check register, we call it recording a transaction. So let’s take a look at a check register and how it works.

The columns in your check register are labeled. Here’s what each column is for:

 

 

Transaction Codes

  • ATM, Automatic Teller Machine
  • D, Deposit
  • DC, Debit Card
  • E, Electronic Check
  • TT, Telephone Transfer
  • T, Tax Deductible
  • O, Other
Image example of check register for keeping track of checkbook transactions

 

  1. Number: This is the check number. You’ll find it in the upper right corner of each check. Every check has a different sequential number.
  2. Date: Write the date you wrote the check.
  3. Description of Transaction: This tells what you did. Did you deposit money? Write a check? Use the Automated Teller Machine (ATM) or debit machine? Make a telephone transfer? Describe your transaction here.
  4. Payment/ Debit: Write the check or withdrawal amount.
  5. Code for Transaction: This is where you fill in a code for transactions you make when you aren’t writing a check. When you get your statement, every month you’ll place a “” through this box when you see the transaction listed.
  6. Service Fee: If your financial institution charges you money to write each check or to withdraw money from the ATM, write that fee in this space.
  7. Deposit/Credit: Did you deposit money into your account? Write down any deposit into your account.
  8. Balance: To find out how much money you have, add the deposited money to what you had before. Or subtract the withdrawal amount from what you had before. The money left is your balance.

Glossary

Automated Teller Machine (ATM): Also known as the money machine or cash machine.

Bad Check: A check that is written when there is not enough money in the account. Also known as a bounced check.

Balance: The amount of money you have in your account.

Cash: Money in the form of bills or coins.

Check: A document used for payment.

Check 21: Federal legislation passed in 2004 that permits financial institutions to create and submit substitute checks from electronic images for processing.

Check Register: A form to keep track of your checking account transactions.

Checking Account: A payment method to manage your money efficiently.

Cleared Check: A check that has gone through the financial institution’s processing center and is listed on your monthly statement.

Debit Card: A card that can be used at an ATM or merchant. Unlike a credit card, the funds are deducted from your checking account.

Deposit: The money you put into your account. Or (verb) to put money into your account.

Deposit Ticket: The form you use to put money into your account.

Electronic Check: When you write a check to a merchant and the merchant hands the check back to you. The check is converted to an automatic deduction to your checking account.

Endorse: To sign your name on the back of a check in order to cash it or deposit it.

Financial Institution: A business that deals with money. For example, a bank or credit union.

Less Cash Received: The amount of cash you get back when you make a deposit.

Memo: The area on a check that notes what the check was written to pay for.

Non-sufficient Funds: See Bad Check.

Non-sufficient Funds Fee: The fee that is charged by a financial institution or business when a check does not clear.

Outstanding Check: A check that is still going through financial institution processing.

Overdraft: When your account goes below zero—there is not enough money to cover the withdrawal.

Reconcile: A process to make sure your checkbook balance matches your financial institution’s balance for your account.

Reconciliation: When you have verified that your checkbook balance is the same as your financial institution’s balance for your account.

Reconciliation Form: A form that helps you reconcile your account. See Reconcile.

Recording a Transaction: The act of writing down a transaction in your check register. See Transaction.

Statement: The documentation you get every month from your financial institution that list all of the activities in your account for the month.

Transaction: When money goes into, or out of, your account. Can include deposits, withdrawals, payments, fees, ATM transactions or transfers.

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