Can I open a checking account with a check?

For you to open a checking account, most financial institutions, be it bank or credit union, require a deposit made into the account. Online banks, that is those which only exist in cyberspace, might specify a certain minimum amount of deposit. In addition, some might demand a certain level of funds be maintained monthly. If the account balance goes below that, there could be a penalty.

That initial deposit can be made in a number of ways. One of the most common is to have funds transferred from another account, checking or savings, either within that financial institution or from another one. Electronic transfer means that the money is immediately credited to your account. You can start writing checks, use your debit card, and withdraw money in person or through an ATM. Also, cash can be deposited. In that case, the account will be immediately active. You’re good to go.

Yes, you can use a check or checks as an initial deposit. Those could be checks that had been made out to you, which you will endorse. They could be from your employer, tenant, friend who owes you money, or a gift. Another type of check deposit would be to write a check to yourself, withdrawing money from another account. That account might be the one you are already using for some specific personal reason or for your business. You would endorse it.

No matter the origin of the check, those funds will not be available to draw on until the financial institution is notified that the money has been released from the other financial institution. The phrase for that is that the check “cleared.” Until it does, your checking account will not be active. You cannot write checks on it, use the debit card, or withdraw funds at the ATM.

The clearing process is important. Anyone can write a check to anyone else. That doesn’t mean there are funds to cover the amount indicated on the check. That’s why financial institutions wait until notification that the money is there and has been transferred to your account. How long the clearing process takes depends on the financial institution, its location – such as if it’s based in a foreign country – and the amount to be released.

When the checking account is opened in-person, then the check can just be endorsed and passed over to the professional in charge of new accounts. The procedure is different if the account is being established with an online bank or credit union, via the Internet. Of course, the web doesn’t conduct paper transactions.

To make the deposit with a check you could scan it with your smartphone or a mobile app. Then, of course, you would then have to wait until your electronic account statement indicates that the check cleared. Another way to make a deposit using a check is to send it to the online bank’s or credit union’s postal address via snail mail. Some online banks reimburse the snail mail postage, which is now nearing the 50-cent level.

In managing your financial life, it is useful to have a number of ways to transact your affairs. Writing and receiving checks are just one. Increasingly, consumers and businesses are using electronic payments, including direct deposit. The funds are there for use and the money transfer is immediate.

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