What is a Checking Account?
Checking accounts let you pay for things (usually larger
things like clothes or computers) with a check, so you don't have to carry
lots of money around with you. A check is like a note that says: If you
go to my bank (or have your bank go to my bank), they have my permission
to give you this much money out of my bank account. You've probably seen
your parents write checks at stores or at home to pay bills. Checks are
especially useful when you have to mail money to someone, since mailing
cash is risky because anybody could take the cash and use it. Only the
person who the check is made out to can cash a check. Some checking accounts
let you pay for things with a small, plastic card, called a debit card,
which works just like a check. Every month, the bank sends you a letter,
called your "account statement" telling you what checks you have
written and how much money is left in your account. You can then compare
the bank's records to yours, to make sure everything is correct. This is
called "balancing your checkbook" and it is important to do this
every month, so that mistakes, either yours or the bank's, can be found
quickly. If you write checks for more money than you have in your checking
account, the bank will not pay them. This is called "bouncing a check,"
because your bank will "bounce" your check back to the person
you wrote it to, instead of giving them money.
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