Best Checking Accounts of September 2021: High Interest & Online

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When you have a checking account, there’s some important terminology that you should be familiar with:

Debit card: A debit card is a payment card that’s linked to a checking or savings account. It’s usually (but not always) Visa- or Mastercard-branded. Unlike a credit card, which allows you to borrow money and pay it back later, debit card transactions are approved based on the current balance of your account, and the money is immediately deducted.

PIN: Short for personal identification number, a PIN is a number that’s typically four to six digits, and is used to identify you when using your debit card for ATM withdrawals or in-store purchases.

Insufficient funds: If you write a check or attempt a payment transaction for a greater amount than is in your checking account, it may be rejected for insufficient funds. In simple terms, insufficient funds means that you didn’t have enough money to cover a certain transaction.

Overdraft: An overdraft is the result of a transaction that causes your account to have a negative balance. The key difference between an overdraft and insufficient funds is that a transaction that results in an overdraft is approved and a transaction resulting in insufficient funds is rejected.

Mobile or remote deposit: Most checking accounts allow customers to make check deposits from their smartphone or other mobile device by uploading a photo of the check, thereby saving a trip to the bank.

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Endorsement: To endorse a check means to sign the back of a check in the specified area, indicating that the person being paid is accepting the money.

Routing number: There are three important numbers on every check, and the first is the routing number. This is a nine-digit code that corresponds with the bank that holds the checking account. Some major banks have several different routing numbers, depending on the geographical location where the account was opened.

Account number: The account number is a unique series of numbers that identifies the specific deposit account within the bank indicated by the routing number. In order to send money to a checking account, you’ll need both the routing and account number. In short, the routing number tells the sending institution which bank to send the money to, and the account number tells that bank where to put it.

Check number: Although it’s not particularly important when it comes to most transactions, every check has a unique number (usually three or four digits). Check numbers are useful for helping the account holder keep track of payments they make by check and can also help identify fraud in many cases.

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View more information: https://www.fool.com/the-ascent/banks/checking-accounts/

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