Function

• Checking accounts provide a place for people to temporarily stow money that they intend to use within a short time. Checking accounts enable people to efficiently transfer funds to other parties. Every bank has a routing number which acts like an account number and the Federal Reserve uses the routing number to direct deposits to a particular bank. Once a bank receives a deposit, it uses the account number to assign funds to a particular account.
  
  

Features

• Accountholders can access their funds by using checks. Payees can cash or deposit checks. Customers can also access funds through debit cards that allow account holders to make withdrawals at automated teller machines. Banks mail monthly statements that list all deposit and withdrawal activity, but many customers prefer to review their accounts by using online banking services. Online bill pay enables customers to set up one-time or regular electronic payments to creditors, utility companies and other businesses.
  
  

Time Frame

• Cash and electronic deposits post to an account the same day they are received or on the next business day if received on Saturday or Sunday. Banks hold check deposits of $5,000 or less for two business days, although they make $100 available the day after the deposit. Check balances in excess of $5,000 are held for seven business days. Check balances in excess of $5,000 in accounts less than 30 days old are held for nine business days. Banks do not hold certified, Treasury or in-state government checks for amounts of $5,000 or less. Checks amounts above $5,000 are subject to seven-day holds. Banks may waive standard hold times for longstanding customers.
  
  

Benefits

• Bank checking accounts are covered by the Federal Deposit Insurance Corp. The FDIC began providing deposit protections in 1933 and covers balances for up to $250,000 for each account owner. Checking balances are combined with savings and certificates of deposit balances at each institution towards the maximum of $250,000 per person. Accounts with two owners enjoy double the coverage. The FDIC does not aggregate balances held in deposit accounts at different institutions.
  
  

Warning

• When an accountholder loses his checkbook, he usually has to close the account because banks typically charge a stop payment fee of $30 or more to stop each check, and the stop payments only remain in effect for six months. Closing accounts often disrupts other automatic debits and credits.
  
  Internet fraudsters often attempt to steal debit card numbers from online sites and use them for fraudulent transactions. If account holders fail to notice and don't report fraudulent transactions within 60 days, they are liable for any losses that occur.