Money Monday – Checking Accounts 101

A checking account is one of the first rights of passage into adulthood. With that being said I think it is important to be familiar with the basic terms and concepts. If a checking account is something you have had for while then this should come as a sort of refresher. As the first asset to your financial footprint a checking account should be balanced regularly and you should check with your bank to make sure you are getting the most from your banking experience. An on-line log in or a mobile app are easy ways to stay updated anytime anywhere.

Here are some basic terms that  you will hear throughout your financial life regarding your checking account.


Reconciling or balancing your check book – this habit  makes sure that what the bank has listed for you activity is actually what you have done. Balancing your account helps you stay on budget, catch fraudulent charges, and keeps you organized.

For those of you running a business this is essential. You will need to account for all expenses during tax season and balancing your accounts does just that. Please don’t be the person who waits until two weeks before the deadline to try and work on this project, believe me you will want to tear your hair out and your eyes may permanently cross. 🙂


Debit Card CVC/CID code – This is an additional identifier for your card used to help keep transactions from potential fraud hazards. As you can see by the pic it is located usually on the back in the signature panel or on the front for american express.



Routing Numbers and account numbers – The routing number is a nine digit number that is specifically given to identify the bank that you have your account with. It is usually found on the bottom of your checks and is the first series of digits listed.

Overdraft – Over draft means that you have spent more money then what was available in your account. Some banks will allow the transaction to go through and put your account balance in a negative status. This also means that they will charge you an extra fee for the courtesy. In order to bring your account back to good standing you will need to pay for the amount that the account is in the negative,  the fees that are charged by the bank, and any outstanding checks/charges you have as well. This can get very costly. I have seen many accounts go into the negative and take a couple hundred dollars just to fix. Banking institutions make millions on just overdraft fees each year, so if you think that the one time fee of $35 is nothing think about it happening a few million times a month.  Balancing your checking account is how to avoid these types of mistakes.

FDIC Insured – Federal Deposit Insurance Corporation, this is insurance that is backed by the federal government in the event of a bank failure. This means that if you have money held in an approved account type and with a participating member of the FDIC program you will have limited coverage up to $250,000 of the money in your account if the bank fails. It is smart to be in business with a bank that is FDIC insured. It is no cost to you as a consumer and it protects your money. Normally a sign is posted in the bank indicating if they are FDIC insured and they will be happy to go over which accounts fall under the current laws for the program.

When choosing a banking institution to open an account with keep in mind that you want one with great service, FDIC insured,  minimal or  no fees, and hours and locations that work for your life and schedule. Your banker should be able to fully explain all of the terms of service and you should take the time to read and understand the fine print on your accounts. Thanks for visiting our Money Monday series and as always feel free to reach out to me with any questions at



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