Banking For Dummies

Help from a real life bank teller on the rules and how-to's of banking.

[bankingfordummies]

So I never thought I would have to say this... But let's talk about safety. Specifically safety at the ATM... Specifically when an armored truck is servicing it. There's a reason armored truck personnel have bullet proof vests on and guns on their belt. Their line of work is a dangerous job, so it should go without saying that when they are doing their job in an area like an outdoor ATM, you should never approach these people. You are putting yourself and them in danger when you do this. So please, let them do their job in peace. If you need an ATM, there is probably another one a couple blocks from where you are. Don't be lazy. Don't put armored truck personnel at risk. Please think first.

[bankingfordummies]

Tips for Business Banking

Businesses are complicated things. There's so much to think about from employee benefits to tax filing. For many businesses, especially those that haven't been around that long, there are some common errors and Don'ts that crop up more commonly when doing bank transactions than you'd think. I'm going to tell you what they are and how to avoid them.

1. Checks/Deposits: Checks are the number one headache for businesses and even individuals alike because people get checks from clients or other individuals and don't take a moment to actually look at the check and make sure a few things have been done. When you receive a check, look at it and make sure they dated the check, signed the check, and that they filled out the number box and correlating legal line on the check. The legal line is the middle line that should have the exact same numbers at the box on the right side, except written out in words in the English language. This is important, as the rules state that this line must be written in English and no other language. Actually read the legal line and make sure that it matched the number box, and that both match the amount you have quoted as the price that is due for payment. This includes the cents, as this is most commonly left off. Now make sure your client has not written with a very light blue or light green pen. For whatever reason, bank scanners cannot pickup this color, so the resulting image it blank. If this happens, you will have to get the check reissued, because tracing over the check is classified as "altering." Lastly, make sure any errors are initialed and the new writing is legible. Do not allow anyone to give you a check that has been written over in a way that makes it seem non-legible or altered. More likely than not, the bank will hand it back to you saying they can't take it. Lastly, make sure the check is made out to the right business name. Do not accept checks made out to you personally (the acception would be CPA businesses where your name usually is the main part of the business name, or sole proprietorships (small businesses that do not have an TIN/EIN. If a sole proprietorship is Incorporated, then INC business rules apply). In other words, if you are a INC, LLC, LC, etc. The check needs to be made out to your business.

Withdrawals/Check Cashing: Withdrawals with businesses can be tricky. They have to be done by signers on the account. In the case of businesses that are not sole proprietorships, checks made out to the business or even an individual also cannot be cashed against the account. Any check being cashed must come from the account directly and be made to an individual, such as payroll or petty cash, simulating a withdrawal. When withdrawing, make sure you are a signer on the account, you have your ID ready, and you know if there are any denominations you need the cash in specifically.

[bankingfordummies]

Lesson 2: How to write a check.

I found this picture online of all the parts of a check. It’s an excellent diagram to get you started and help you learn what to put where. I’m just going to say a few extra little words on the subject. We’ll start with the “pay to the order of” line. On this line, I have seen people write just about anything. Depending on how accurate you write this line, the bank may or may not take the check that you’re writing. Accounts are styled a certain way. If someone’s company is called “Lovely Lawns INC,” don’t make your check out to “Beautiful Lawns,” Though the word “beautiful” and “lovely” sound similar to you, their company is incorporated under “Lovely Lawns INC,” which is likely how the account is also styled, and the bank may not be able to take that check. When writing a check to an individual, always write their last name. And if you aren’t sure how their name is spelled, ask.

A little note on “and” and “or”: Making out a check in a situation where two people could potentially benefit, such as a husband and wife, can be kind of tricky. Maybe you want to show you have equal affection for both. Maybe you aren’t sure who does the banking in the family, or maybe you aren’t totally sure which person should receive the check. When making out a check with two names, “or” mean that either person can sign the back of the check and benefit from it. By writing “Sandy Smith or Andy McDonald,” you are saying that either person can sign the back of the check and receive the funds from it. By writing “and,” you are stating that both people must sign the back of the check in order to cash it, but they must also have an account together unless one person signs their portion of the check over to the other(There can be exceptions to this is say, its an insurance check and its written out to a specific person and a company. Obviously you aren’t going to have an account with that company). This can get tricky in the bank world when people don’t have bank accounts together and can cause a lot of problems when put up against the way and account is styled. However, there are some cases where “and” is necessary (like insurance checks). So use these two words appropriately.

The second thing is the “number amount” box and the “written legal line.” You need to fill out both of these. If there’s a discrepancy, the written legal line will always win, but sometimes tellers and machines have trouble reading your handwriting, so numbers help us fill in the gaps. As a side note, make sure you try and separate dollars and cents on the written line, or you might end up saying a number that you didn’t want to say.

Besides the date at the top, the only other required element is your signature at the bottom. Now, please note, a check isn’t valid without a signature, so don’t ever forget to sign your check.

“Why are checks so expensive?”

There’s a few reasons for this. See those black sets of numbers at the bottom. One is for the bank routing number, one for your account number, and one for your check number. Each of those is encoded with magnetic ink that computers can read. That ink is special, and its expensive. The other reason is that checks are printed on a special kind of paper, which is meant to be durable and help prevent fraud. Many checks have security features added to help fraud prevention. They also come in special books with perforated edges and personalized information printed on. After all that, it shouldn’t be surprising at all that checks can be pricey.