7 things you need to know about banking

For many people, banking seems straight forward, deposit money and write cheques. But there are actually many details you need to know about banking to make sure you’re holding on to all of your money and not spending on fees, or spending too much time correcting problems.

Always make sure you read the disclosures your financial institutions provide so you know the rules that go along with having an account. For example, free accounts are only free if you follow all the rules and avoid using products and services that incur fees. According to extension.edu, these are seven things you need to know about banking:

1. Before you write a cheque, make sure your current account has enough money in it to cover the cheque.
2. Direct deposit can help you make savings a habit. You can even direct deposit your paycheque into multiple accounts: your regular cheque account, and possibly a separate emergency savings account where your money is less available for spending. Take advantage of this easy and effortless way to make savings automatic in order to help you reach your financial goals.
3. Open your statements as soon as they arrive in the mail. You only have 60 days to check your statement and correct errors. Some financial institutions even limit the timeframe to 30 days. Although you may not always be happy about the “damage” you have done, you need to make sure the damages are all yours and not bank error or identity theft.
4. Protect yourself from cheque fraud. Fill out your cheques properly. This means filling in all spaces to avoid someone being able to add numbers or names to your cheque. Use a gel pen to prevent people from washing information off your cheque and rewriting your cheque with a new amount and payee. Avoid putting account numbers on cheque if you can. If you must put account information, limit it to the last four digits of your account.
5. Reduce the risk of identity theft. Go electronic and keep your financial information out of your mailbox. Stealing mail is one of the top ways identity thieves get your personal information.
6. ATM deposits may not be available immediately. Most banks and credit unions do not consider the money you deposit into an ATM to clear your account until it makes its way inside the financial institution. Your deposit may take one or two business days to clear, and possibly longer, depending on the type of cheque deposited.
7. Beware of joint accounts. If the person sharing your bank account is not your spouse, you have essentially gifted that person half your account by adding his/her name to your account. You also have put your account at risk to claims by creditors or the spouse of your joint account holder. The best way to provide someone access to pay your bills is by giving him/her a Power of Attorney, not by joint ownership of your account. If you want someone to inherit your property, name him/her as “Pay on Death” on your account.