Check Protection

Stolen checks can be a nightmare. However, your checks don't have to be stolen to leave you vulnerable. Sometimes, just the information you have printed on your checks can be enough for a thief to take advantage. We have some tips on what to include -- and other ways to protect yourself.

Checking Your Checks

Treat them like money -- Don't leave your checks laying around, treat them like cash. If you know you have cash in your purse, or wallet, odds are you keep a close eye on it. The same should apply with checks, banking statements and your account number. If you don't keep those in a safe, secure place, you're making it easier for a criminal to target you.

Information to include -- Nessa Feddis with the American Bankers Association says don't necessarily include your full name. It may be smartest to use just your first initial and full last name on your checks. In that case, only your bank will know how you legitimately sign your checks, making it easier to prove fraud if a criminal does find your checks. Feddis says your address is fine, but don't include your telephone number. You can always write that on by hand if a merchant requests it. Also, NEVER include your social security number.

Protections -- You can order checks that have security included on them. The security options are special ink, watermarks, and even a little lock symbol that is on the check. It makes it much more difficult to counterfeit those checks.

Bright Idea!

Don't write checks out to cash unless you are cashing them immediately. Anyone can cash those and get your money if the check is lost.

Another form of protection you'll need has less to do with criminal activity and more to do with your ability to avoid fees. 42 billion checks are processed each day in America, and the odds are that more than a few accounts are hit with penalty fees because of some misconceptions.

Checking Fees


Timing

One of the biggest misunderstandings with checking accounts these days deals with timing. "We've all heard stories from our fathers and mothers about how long it took for checks to get from one point to another, and that's just not the case anymore," says Steve Schutze from the American Bankers Association. The truth is, it doesn't take nearly as long for checks to clear as it once did. Many checks written locally can be processed within 24 hours. Other checks will not hit your account for days, depending on where they're being sent.

Postdating

The idea of postdating a check or dating it for some time in the future is also a common misconception. "People have done that in the past because they want to give someone a payment for the time they weren't going to be around," says Schutze. But, he says banks don't typically look at the dates on the checks being processed. So, if you don't trust the person holding the check, don't give it to them until you're sure it will clear.

Right of Offset

Something else you may not know about your checking account. If you take out a loan at the same bank and don't make the payments, the bank may have a right of offset. That means the bank can transfer money out of your checking account to pay off your debt. So, before taking out a loan or opening up a checking account, make sure to read each and every document and understand when money may be transferred without your specific request.

American Bankers Association

Picking a Checking Account

What kind of checking account do you have? From basic checking to express checking, and money market accounts, there are so many choices these days. How do you know which one is right for you? Joan Buchanan from the Federal Reserve says before you even walk into a bank, you need to figure out what kind of checking habits you have:

>>How many checks do you write each month?

>>What's the minimum balance you keep?

>>Do you ever bounce checks?

>>What features are important to you? This may include online bill pay, overdraft protection, or banking by phone.

>>Would you like to earn interest?

Once you're armed with this information, you can then look at the various options and figure out which one matches your needs best.

Here are some of the many options your bank may offer you:

Basic Checking

A basic checking account, as the name implies, is likely the simplest kind of checking account you can get. It generally offers:

>>Lower initial deposit requirements.
>>Lower daily balance requirements.

However, don't expect to see too many perks. "They may not have as many quote frills," says Buchanan. That means you probably won't get unlimited check writing, unlimited ATM use or an account with no fees.

Express Checking

If you tend to bank electronically, an express checking account may be right for you. They are designed for people "on the go" and who don't spend much time in the bank. Instead, customers of these accounts frequent ATMs, use online banking, or bank by phone. They generally offer:

>>Unlimited check writing.
>>Low balance requirements.
>>Low or no monthly fees.

However, if you have an express checking account, and you do visit a bank branch, chances are, you will be charged a fee every time you talk to a teller.

Student and Senior Checking

If you're a student or senior citizen, talk to your bank. Banks generally have special checking accounts set up just for you. You may be able to get:

>>Free personal checks.
>>Unlimited ATM use.
>>Low initial deposit requirements.
>>Low balance requirements.

Money Market Account

If you're looking to have a checking account that earns a higher interest rate than a regular checking account, you may want to think about a money market account. Money markets generally put your money in short-term investments. While the idea of earning more interest may sound great, there are some requirements. Generally, you must:

>>Have a high initial deposit.
>>Maintain a high balance to avoid fees.
>>Write only three to five checks a month to avoid fees.

However, make sure the money market you choose carries the FDIC stamp. "Most banks and thrifts are insured by the FDIC. However, there are some types of money market accounts that are offered by entities that are not insured by the FDIC," says Buchanan.

Read more smart consumer tips and strategies
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