Ways to Understand Your Check and Tips to Balance Your Checkbook

Although they get used less and less, checks are still a popular way to pay. According to the Federal Reserve Board, about 18 billion checks were written annually as recently as 2012. Some of those were paychecks, insurance benefits, and payments for benefits like Social Security – but many were personal checks. Checks are legal documents that are commonly used in certain settings. Here are some tips and suggestions for understanding and using your checks effectively.

What You Will Need to Fill Out Your Check

To complete your checks, you will need to fill in the following pieces of information:

1. The date.
2. The Pay to the Order of line.
   This is where you write the name of the person or company to whom you will give the check. After writing the name, you can draw a line to the end. This prevents anyone from adding an additional name on your check.
3. The dollar amount of the check in numbers.
   Such as $15.64.
4. The dollar amount of the check in words.
   Such as Fifteen and 64/100. After writing out the amount of the check, draw a line to the end. This prevents anyone from adding an additional amount after what you have written.
5. The memo section. 
   This area is optional. You can use this area to remind yourself why you wrote the check or to record the account number of the bill you are paying.
6. The signature line.

What is on the Check That You Will Need to Know

7. Your name and address.
   Your phone number is sometimes included.
8. The check number. 
   The number is used to identify each check written.
9. Codes for the state where the financial institution is located and the regional Federal Reserve Bank that will handle this check.
10. Mutual Credit Union’s number and branch.
11. Routing numbers. This includes Mutual Credit Union and the state computer routing numbers, as well as your account number.

What is on The Back of Your Check?

The back of a check generally has three separate sections.

The endorsement area is where you endorse—sign—the check once you’re ready to deposit or cash the check. This might be as simple as adding your signature, but it’s safest to use an endorsement that restricts how the check can be used. If the check is lost or stolen after you endorse it, your restriction makes it harder to steal the money itself.

The security screen is not an area you’ll use as a consumer; most checks say that this area is reserved for financial institution use. Financial Institutions use this space to note the flow of events when a check is processed. This section is usually printed very lightly (possibly with a pattern of lines) so that it’s hard to photocopy and reproduce. On legitimate check stock, you’ll often find the words “Original Document” here, but you have to look closely.

The security box describes the security features on the check you’re holding. It contains a warning that might help discourage thieves from altering or copying the check, and it also provides tips to help you determine if a check is legitimate. For example, it might suggest that you look for microprint or watermarks on the check.

Best Practices When Paying by Check

1. Check your balance to make sure you have enough money before writing a check.
2. Record the transaction and update the balance after writing a check.
3. Write checks legibly with a pen.
4. Print the correct date on the check.  Do not post-date a check.
5. Make sure the number and written words you write for the check amount match.
6. Write the check amount to the left of the amount line.
7. If you make a mistake on a check, write “VOID” across the check’s face , tear up the check, and write a new one.
8. Don’t sign blank checks.
9. Use restrictive endorsements, such as “For Deposit Only,” when appropriate.
10. Destroy voided or unused checks and deposit slips.

How to Balance Your Checkbook

• Update your balance in your checkbook register by keeping track of each withdrawal and deposit as they occur.
• When you receive your monthly statement from Mutual Credit Union, balance, or reconcile, the statement to your checkbook register. To reconcile the statements, match each transaction in the statement to the transactions in your register and place a mark next to the transaction in your register for each transaction that matches the statement. If you have a record of a transaction that does not appear on the statement, the transaction may still be pending or may not have been presented to Mutual.
• The balances as of the end of the month should match. If the balances do not match, check your register to see whether one of your withdrawals or deposits has not been processed, see if Mutual has a record of a transaction that you do not have recorded in your register, or see if the amount of one of the transactions differs.
• To match your current balance to the balance from the statement, add back to your current balance any withdrawals made after the date of the statement and subtract the amount of any deposits made after the date of the statement.  This should match the balance from the statement.
• If the balances still do not match, check your register and receipts against the record from Mutual Credit Union to determine whether an error has occurred. Also check for any arithmetic errors (e.g., adding rather than subtracting) in your register. If you believe an error has occurred, contact us to help you resolve.

 

For a full list of all Mutual Credit Union Checking account products, please visit our website page Mutual CU Personal Checking Accounts.