Somerset Trust Company offices will be closed on Labor Day, September 1, 2014. Normal business hours will resume on Tuesday, September 2, 2014.
How to Maintain a Checking Account

 

Whether you use checks or use only your debit card, maintaining an accurate record of the amounts you spend from your account and the amounts you deposit into your account is so important.
 
Pay particular attention to 
Your Checkbook Register.

Checking Account Terms

Account Number Number that identifies your checking account and should be on all your checks and deposits
Cancelled Checks Checks that have been paid by the bank.
Check The printed form used by the customer ordering the bank to pay a definite sum of money from the customer’s checking account to a designated payee.
Deposit Ticket or Slip The printed form upon which the depositor lists all cash and checks to be deposited to his or her account.
Drawer The person who orders the bank to pay a definite sum of money from his or her checking account.
Electronic Transaction Any deposit or charge to the account that occurs without the use of a paper document. Electronic transactions require some form of authorization by the account holder before they can be initiated. Samples of Electronic Transactions include ATM, debit card, direct deposit or automatic bill payments.
Endorsement

The signature of the payee on the back of the check. There may be many endorsements on the back of a check.

Payee The person, firm or organization to whom the check is payable. Reconcilement of Account—the steps taken for verifying the balance of the checkbook with the bank statement.
Service Charge A charge made by an institution for servicing the checking account.
Statement The form issued by the bank to its customer on a regular basis which shows the balance at the beginning of the period, checks paid by the bank, deposits to the account, service charges if any, electronic transactions, and the balance at the end of the period.
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How to Write a Check

  1. If your checks are not numbered, number them consecutively.
  2. Date each check properly. If dated in the future, the bank may return it.
  3. Type or write in dark ink the name of the person or company to whom the check is payable. 
    Never use pencil when completing a check.
  4. Enter the amount of the check in figures as close to the dollar sign as possible so that additional figures cannot be added.
  5. Write the amount of the check (in words) starting under the “Pay to the order of” line and at the left edge of the line.
    Draw a heavy or wavy line between the amount and the word “Dollars.”
  6. Sign your name on the bottom line exactly as you signed it on the bank’s signature card when you opened the account.
  7. Use the Memo line to record what the check is in payment of.
  8. Be sure that the check has your account number on it.

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Make a Deposit

The printed form that is used for making a deposit is called the checking account deposit ticket.
One of the more commonly used deposit tickets is illustrated here.

 
  1. Be sure that the deposit ticket has your account number on it.
  2. Date the deposit ticket.
  3. Show total currency and total coin that is to be deposited. Currency is paper bills.
  4. List checks separately that are to be deposited. If necessary, use the back side of the deposit ticket for additional checks and enter the amount on the front.
  5. The total of the deposit.

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Cancelled Checks

Checks that have been paid by the bank are called cancelled checks. Somerset Trust Company provides images of these checks in your statement. Some of the typical endorsements shown on the back of the check include:
   
  1. Payee’s endorsement.
  2. The payee’s bank.
  3. The Federal Reserve Bank. Endorsements show through whose hands the check has passed in the collection process.

 

 

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Make-Up of a Check

  1. Check number
  2. Date of check
  3. ABA and Federal Reserve Numbers. These numbers identify Somerset Trust Company at the Federal Reserve Bank.
  4. Payee
  5. Amount of check (in figures)
  6. Amount of check (in words)
  7. Name of bank on which check is drawn
  8. Transit field, corresponds to #3. Magnetically imprinted for routing by computer.
  9. Your account number, magnetically imprinted for computer processing.
  10. Check number in magnetic ink for computer processing. Corresponds to #1.
  11. Signature of drawer or account owner.
  12. Amount of check in magnetic ink for computer processing.

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Your Checkbook Register

The checkbook register is that part of your checkbook where all the checks you write, debit card purchases and deposits you make are recorded. A typical page from a checkbook register is illustrated.

   
  1. Check number or record of CheckCard transaction.
  2. Date of the check or transaction.
  3. The payee.
  4. The amount of the check or transaction. Subtract the amount from the previous balance. Be sure to record the check or transaction in your checkbook register as it occurs.
  5. Deposits should be recorded in the deposit column and added to the previous balance.

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Forms of Payee Endorsements

The signature or stamp of the payee on the back of the check is called the endorsement. The three most common endorsements are as follows: 

Blank Endorsement Endorsement in Full Restrictive Endorsement
An endorsement that consists only of the name of the payee. Should not be placed on the check until the payee is ready to deposit or cash the check. An endorsement that states to whom the check is to be paid together with the name of the payee. States that the check can be cashed or transferred only on the order of the person named in the endorsement. An endorsement that limits the receiver of the check as to the use he can make of the funds collected. Commonly used when checks are prepared for deposit.
ENDORSE HERE ENDORSE HERE ENDORSE HERE
John Doe X pay to the order
of xyz company
John Doe
X for deposit only
John Doe
Do not write, stamp or sign below this line. Reserved for bank use. Do not write, stamp or sign below this line. Reserved for bank use. Do not write, stamp or sign below this line. Reserved for bank use.

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Reconciliation

Reconcilement is the process whereby you verify your checkbook register amount with the amount the bank has on its records for your account.
Before you begin, make sure all items shown on the statement from the bank have been entered in your checkbook register.

To update your checkbook register:

  • Add any increases such as deposits listed on the statement that you have not already entered.
  • Subtract any decreases such as checks, charges, fees, ATM withdrawals or STC CheckCard transactions that you have not entered.
  • In your register, mark off all increases listed in the statement.
  • Likewise, in your register, mark off any decreases listed in the statement such as checks, ATM withdrawals, STC CheckCard transactions or fees.

Here’s how the reconcilement process works.

  1.  Insert the ending balance on your statement.
  2.  Add deposits not credited to your account.
  3. Subtract all checks outstanding (not checked off in your checkbook register, therefore not yet charged to your account, or cleared.)
  4. Your adjusted balance should agree with the balance in your checkbook register.

    If your adjusted balance does not agree with your checkbook register follow the steps listed below.
  • Recheck the addition, subtraction and corrections made in your checkbook register and on your reconcilement form.
  • Verify the carryover balance from page to page in your checkbook register.
  • Be sure you have deducted any service charges made by the bank from your checkbook register.
  • Make sure you have recorded all automated deductions and deposits in your checkbook register.
  • Verify the magnetically printed amount located on the bottom right corner of the cancelled check or any deposit slip with the amount listed in your checkbook register.

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