Opening and Using a Check Account
Opening a checking account helps make payments through the bank and helps to protect cash. In addition, it provides an authentic record of the transactions.
The three essential things you need while opening an account are:
- Signature Card
- Check Book
- ABA Numbers
Signature Card
A signature card contains the signatures of those who are authorized to draw checks on a specific account. The bank requires a signature card to ensure that the checks drawn on the bank are authorized for payment. A signature card helps the bank identify signatures on checks presented for payments, and to match the signatures on the signed checks presented for payment. Using a signature card protects both the account holder and the bank against checks with forged signatures.
Checkbook
When a depositor opens a checking account, checks are printed and packaged together in a checkbook. Each book has several detachable checks attached to check stubs, numbered in sequence. The stub shows the date, the payee's name, the amount, and the purpose for which the check was issued. The balance in the account should be known at all times so that checks are not drawn for amounts in excess of its balance.
ABA Numbers
An American Bankers Association (ABA) number is the fractional number printed in the upper right corner of a check, just below the check number. This is in addition to the preprinted check number, and the account number. The ABA number identifies the bank and helps to sort checks. The ABA number is also printed at the bottom of each check for electronic sorting.
The ABA number, the account number, and the check number are printed at the bottom of the check in a special ink and type. These specially printed numbers are called Magnetic Ink Character Recognition (MICR) numbers.