deposit business check into personal account

You may deposit checks by mail. If you write a check from your account at another bank, make the check payable to American Express National Bank and write. A free checking account lets you safely and easily deposit and withdraw money for everyday purchases. You can use personal checks or a debit card to spend. A sole proprietor can direct his or her customers concerning the payee name on any check payments. Checks payable to the individual owner can. deposit business check into personal account

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QuickBooks Online: Entering Expenses paid in CASH (or with owner’s personal account)

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What Is a Checking Account?

A checking account is a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines, and electronic debits, among other methods. A checking account differs from other bank accounts in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both.

Key Takeaways

  • A checking account is a deposit account with a bank or other financial firm that allows the holder to make deposits and withdrawals.
  • Checking accounts are very liquid, allowing for numerous deposits and withdrawals, as opposed to less-liquid savings or investment accounts.
  • The tradeoff for increased liquidity is that checking accounts don't offer holders much, if any, interest.
  • Money can be deposited at banks and via ATMs, through direct deposit or other electronic transfer; account-holders can withdraw funds via banks and ATMs, by writing checks, or using electronic debit or credit cards paired with their accounts.
  • It's important to keep track of checking account fees, which are assessed for overdrafts, writing too many checks and—at some banks—allowing the account balance to drop below a required minimum.

Understanding Checking Accounts

Checking accounts can include commercial or business accounts, student accounts, and joint accounts, along with many other types of accounts that offer similar features.

A commercial checking account is used by businesses and is the property of the business. The business' officers and managers have signing authority on the account as authorized by the business' governing documents.

Some banks offer a special free checking account for college students that will remain free until they graduate. A joint checking account is one where two or more people, usually marital partners, are both able to write checks on the account.

In exchange for liquidity, checking accounts typically do not offer high interest rates (if they offer interest at all). But if held at a chartered banking institution, funds are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per individual depositor, per insured bank.

For accounts with large balances, banks often provide a service to "sweep" the checking account. This involves withdrawing most of the excess cash in the account and investing it in overnight interest-bearing funds. At the beginning of the next business day, the funds are deposited back into the checking account along with the interest earned overnight.

Checking Accounts and Banks

Offering checking accounts for minimal fees, most large commercial banks use checking accounts as loss leaders.

A loss leader is a marketing tool in which a company offers a product below its cost or market value to attract consumers.

The goal of most banks is to attract consumers with free or low-cost checking accounts and then entice them to use more profitable offerings such as personal loans, mortgages, and certificates of deposit.

However, as alternative lenders such as fintech companies offer consumers an increasing number of loans, banks may have to revisit this strategy. Banks may decide, for example, to increase fees on checking accounts if they cannot sell enough profitable products to cover their losses.

Money Supply Measurements

Because money held in checking accounts is so liquid, aggregate balances nationwide are used in the atm withdrawal limit chase of the M1 money supply. M1 is one measure of the money supply, and it includes the sum of all transaction deposits held at depository institutions, as well as currency held by the public. M2, another measure, includes all of the funds accounted for in M1, as well as those in savings accounts, small-denomination time deposits, and retail money market mutual fund shares.

Using Checking Accounts

Consumers can set up checking accounts at bank branches or through a financial institution's website. To deposit funds, account-holders can use automated teller machines (ATMs), direct deposit, and over-the-counter deposits. To access their funds, they can write checks, use ATMs or use electronic debit or credit cards connected to their accounts. 

Advances in electronic banking have made checking accounts more convenient to use. Customers can now pay bills via electronic transfers, thus eliminating the need for writing and mailing paper checks. They can also set up automatic payments of routine monthly expenses, and they can use smartphone apps for making deposits or transfers.

Don't overlook checking account fees—there are things banks won't widely advertise to people who aren't reading the fine print, including contingent fees like overdrafts.

Checking Accounts and Overdrafts

If you write a check or make a purchase for more than you have in your checking account, your bank may cover the difference.

What many banks don't tell customers is that they'll charge you for each transaction that causes your account to use an overdraft. If you have a $50 account balance, for example, and you make purchases using your debit card of $25, $25, and $53, you will be charged an overdraft fee—usually a hefty one—for the purchase that overdrew your account, as well as for each subsequent purchase after you're in the red.

But there's more. In the example above in which you made three purchases of $25, $25, and $53, you wouldn't just be charged deposit business check into personal account fee for the last purchase. Per the account-holder agreement, many banks have provisions stating that in the event of an overdraft, transactions will be grouped in the order of their size, regardless of the order in which they occurred. This means the bank would group those transactions in the order of $53, $25, $25, charging a fee for each of the three transactions on the day you overdrew your account. Furthermore, if your account remains overdrawn, your bank may also charge you daily interest on the loan.

There is a practical reason for clearing larger payments before smaller payments. Many important bills and debt payments, such as car and mortgage payments, are usually in large denominations. The rationale is that it is better to have those payments cleared first. However, such fees are also an extremely lucrative income generator for banks.

Avoiding Overdraft Fees

Many banks offer a service called overdraft protection for checking account-holders. This feature is essentially a line of credit that kicks in when a debit is presented to the account that it can't cover. Overdraft protection supplies the funds, thus avoiding denial of the payment and a non-sufficient funds (NSF) fee. However, banks usually do charge a “courtesy fee” for each use of overdraft protection.

Outside of overdraft protection, you can avoid overdraft charges by choosing a checking account with no overdraft fees, or keeping money in a linked account.

Some banks will forgive one to four overdraft charges in a one-year period, though you may have to call up and ask. Chase Bank, for example, waives the fees for insufficient funds incurred on up to four business days in every 12-month period on its Sapphire Checking and Private Client Checking accounts.

Checking Account Service Charges

While banks are traditionally thought of as generating income from the interest they charge customers to borrow money, service charges were created as a way to generate income from accounts that weren't generating enough interest revenue to cover the bank's expenses. In today's computer-driven world, it costs a bank pretty much the same amount to maintain an account with a $10 balance as it does an account with a $2,000 balance. The difference is that while the larger account is earning enough interest for the bank to earn some income, the $10 account is costing the bank more than it's bringing in.

The bank makes up for this shortfall by charging fees when customers fail to maintain a minimum balance, write too many checks, or, as just discussed, overdraw an account.

There may be a way to get out of at least some of those fees on occasion. If you're a customer of a large bank (not a small-town savings-and-loan branch), the best way to avoid paying non-recurring fees is to ask politely. Customer service reps at large banks are often authorized to overturn hundreds of dollars in charges if you merely explain the situation and ask them to cancel the charge. Just be aware that these "courtesy cancellations" are usually one-time deals.

Checking Account Features

Direct Deposit

Direct deposit allows your employer to electronically deposit your paycheck into your bank account, which makes the funds immediately available to you. Banks also benefit from this feature, as it gives them a steady flow of income to lend to customers. Because of this, many banks will provide free checking (i.e., no minimum balance or monthly maintenance fees) if you set up direct deposit for your account.

Electronic Funds Transfer

With an electronic funds transfer (EFT), also known as a wire transfer, it's possible to have money directly transferred into your account without having to wait for a check to come in the mail. Most banks no longer charge to make an EFT.


ATMs make it convenient to access cash from your checking account or savings after hours, but it's important to be aware of fees that may be associated with their use. While you're typically in the clear when you use one of your own bank's ATMs, using an ATM from another bank could result in surcharges from both the bank that owns the ATM and your bank. However, surcharge-free ATMs are becoming increasingly prevalent.

Automated Teller Machine Definition

Cashless Banking

The debit card has become a staple for anyone who uses a checking account. It provides the ease of use and portability of a major credit card without the burden of high-interest credit card bills. Many banks offer zero-liability fraud protection for debit cards to help protect against identity theft if a card is lost or stolen.

Checking Accounts and Interest

If you choose an interest-bearing checking account, be prepared to pay plenty of fees—particularly if you can't maintain a minimum balance. According to a 2021 Bankrate study, the average minimum balance required to avoid a monthly fee on an interest checking account was $9,896.81, up 31% from the year before.

This minimum amount is typically the combined total of all your accounts at the bank, including checking accounts, savings accounts, and certificates of deposit. If your balance falls below the required minimum, you'll have to pay a monthly service fee. The average monthly service fee on interest-bearing accounts increased by nearly 5.5 percent since last year’s survey. The average maintenance fee on a checking account that earns interest totaled $16.35 a month.

Only a handful of banks serve up free interest-bearing checking accounts with no strings attached. However, if you have a longstanding favorable relationship with your bank, you might get the fee on your interest-bearing checking account waived.

Checking Accounts and Credit Scores

A checking account can affect your credit score and credit report under certain circumstances, but most basic checking account activities—such as making deposits and withdrawals and writing checks—do not have an impact. Unlike credit cards, closing dormant checking accounts in good standing also has no impact on your credit score or credit report. And oversights that result in checking accounts being overdrawn do not appear on your credit report as long as you take care of them in a timely manner.

Some banks do a soft inquiry, or pull, of your credit report to find out if you have a decent track record handling money before they offer you a checking account. Soft pulls have no impact on your credit score. If you’re opening a checking account and applying for other financial products, such as home loans and credit cards, the bank is likely to do a hard inquiry to view your credit report and credit score. Hard pulls reflect on your credit report for up to 12 months and may drop your credit score by as much as five points.

If you apply for checking account overdraft protection, the bank is likely to pull your credit since overdraft protection is a line of credit. If you fail to restore your account to a positive balance in a timely manner following an overdraft, you can expect the incident to be reported to the credit bureaus.

If you don't have overdraft protection and you overdraw your checking account and fail to restore it to a positive balance in a timely manner, the bank may turn your account over to a collection agency. In that case, that information also will be reported to the deposit business check into personal account bureaus. 

How to Open a Checking Account

There are agencies that keep track of and report your banking history. The official name of this report card on your bank accounts is "consumer banking report." Banks and credit unions look at this report before they will allow you to open a new account.

The two consumer reporting agencies that track the vast majority of bank accounts in the United States are ChexSystems and Early Warning System.

When you apply for a new account, these agencies report whether you have ever bounced checks, refused to pay late fees, or had accounts closed due to mismanagement. 

Chronically bouncing checks, not paying overdraft fees, committing fraud, or having an account "closed for cause" can all result in a bank or credit union denying you a new account. Under the Fair Credit Reporting Act (FCRA), if your checking account was closed due to mismanagement, that information can appear in your consumer banking report for up to seven years. However, according to the American Bankers Association, most banks will not report you if you overdraw your account, provided you take care of it within a reasonable period.

If there is nothing to report, that is good. In fact, that’s the best possible outcome. It means you have been a model account-holder.

Being Denied a Checking Account

If you haven't been a model account-holder, you can effectively be blacklisted from opening a checking account. Your best course of action is to avoid problems before they happen. Monitor your checking bank of america physician mortgage rates and make sure you check the balance on a regular basis to avoid overdraft charges and fees. When they occur, make sure you have sufficient funds to pay them, the sooner the better.

If you are denied, ask the bank or credit union to reconsider. Sometimes the opportunity to speak with a bank officer is all it takes to get the institution to change its mind.

You can also try opening a savings account to build a relationship with the financial institution. Once you are able to get a checking account, it can be tied to this savings account to provide DIY overdraft protection. 

Even if you have legitimate blots on your record, it’s important to know how your data is tracked and what you can do to fix a mistake or repair a bad history.

Tracking and Correcting Your Data

Under the FCRA, deposit business check into personal account have the right to ask the bank or credit union which of the two verification systems they use. If a problem is found, you will receive a disclosure notice, likely informing you that you will not be able to open an account and why. At that time, you can request a free copy of the report that was the basis for your denial.

Federal law allows you to request a free banking history report once per year per agency, at which time you can dispute incorrect information and ask that the record be corrected. The reporting services also must tell you how to dispute inaccurate information.

You can and should dispute incorrect information in your consumer banking report. It may seem obvious, but you should obtain your report, check it carefully, and make sure it is accurate. If it is not, follow procedures to get it corrected and notify the bank or credit union. The Consumer Financial Protection Bureau (CFPB) offers sample letters to dispute inaccurate information in your history.

When you contact one of the reporting agencies, be aware that it may try to sell you other products. You are not obligated to buy them, and declining them should not affect the outcome of your dispute.

You may be tempted to pay a company to "repair" your credit or checking account history. But most credit repair companies are scams. Besides, if the negative information is accurate, the reporting services are not obligated to remove it for up to seven years. The only way it can be legitimately removed is if the bank or credit union that reported the information requests it. So, you might be better served to try to repair your relationship with the institution on your own.

Some banks offer cash-only pre-paid card accounts for people who can't get traditional accounts. After a period of good stewardship, you may qualify for a regular account.

Many banks and credit unions offer other types of second-chance programs with restricted account access, higher bank fees, and in many cases, no debit card. If you are a candidate for a second-chance program, make sure the bank is insured by the FDIC. If it’s a credit union, it should be insured by the National Credit Union Administration (NCUA).

Is a Checking Account a Debit Card?

A checking account is not a debit card. A checking account is a deposit account at a financial institution that allows for withdrawals and deposits of cash. Checking accounts serve as a person's primary day-to-day resource of funds, where cash can be withdrawn or deposited and various payments can be made. Today, most checking accounts come with a debit card that is linked to the checking account. The debit card can then be used to make electronic payments or cash withdrawals from an ATM.

What Are the Different Types of Checking Accounts?

Some of the different types of checking accounts are regular (basic) checking accounts, premium checking accounts, student checking accounts, senior checking accounts, interest-bearing accounts, business checking accounts, and rewards checking accounts. Each of these comes with different features, or different limits on certain features, such as minimum deposit amounts, number of transaction fees, ATM fees, and overdraft protection.

What Is the Difference Between a Checking Account and a Savings Account?

A checking account is meant to be used for daily cash needs. It is the primary source of funds for an individual where cash can be withdrawn for spending or payments. A savings account is an account that is meant to be used for saving rather than spending. Savings accounts also come with the ability to earn interest on money deposited in the account whereas a checking account does not. Most savings accounts also come with limited withdrawal amounts per month whereas a checking account has limitless withdrawals.


Whether you work from home or own a multi-million dollar company, there are numerous reasons to separate personal and business finances. Yet, business owners still make the mistake of using a personal bank account for their business.

Although having two bank deposit business check into personal account appears inconvenient, you shouldn't use a personal account for your business finances primarily because it can affect your legal liability.

In fact, one of the first steps to owning a business should be opening a business bank account, in addition to a personal bank account. Most banks now offer free business checking accounts so cost shouldn't be an issue.

Legal Protection

When you set up an LLC or a corporation, one of the primary advantages of doing so is the legal liability protection it affords you.

The bottom line: the courts consider the corporation a separate entity from the individuals who own it. When you do business as a corporation, if the corporation gets sued, the party suing the corporation cannot sue you as an individual, unless of course you have personally guaranteed something.

But, if you mingle your finances, a court can potentially go after the individual running the company because it looks less like you're running a capital credit union online banking entity and more like you and the corporation are one and the same.

Tax Advantages

It doesn't matter if your business is run out of a home office, strictly Web-based, or is a "brick and mortar" location, a separate business account has its advantages. Regardless of whether you set up an LLC, Corporation or Partnership, maintaining a business bank account will help you avoid unnecessary hassles.

For example, using a separate business account makes it much easier come tax time, as you will need to file your business income and expenses separately from your personal transactions. Differentiating personal expenses from business expenses when they are in the same account can be time consuming and cumbersome.

Bryan Greenwood from Washington Mutual Small Business Banking notes, "Keeping separate accounts (business and personal) is always the smart thing to do. Many business owners are so busy starting, running and growing their businesses, it is always better to develop good business habits early, especially when it comes to finances and record keeping."

In addition, the IRS has stringent rules for those who work from home about what can be deducted as "business expenses." If you use your personal account, the IRS may frown upon those deductions, even if they are legitimate business expenses.

Consider Your Credibility

Besides IRS auditing issues, using a business account also adds a note of professionalism to your company. If a client receives a personal check for services rendered, they may not take you as seriously as you would like. However, a professional check from a business account will convey professionalism and, more importantly, confidence.

Added Convenience - the Business Credit Card

One of the best ways to make sure you distinguish between personal and business expenses is by using a separate business credit card. Expense reporting can be a daunting, yet crucial task for small businesses, and credit card statements can be a valuable asset when monitoring business spending.

In addition to the obvious reason of deducting business expenses with ease, using a business credit card gives businesses an additional line of credit that may not be an option from a traditional bank. Not only can businesses extend their cash flow to pay for business supplies, vendor services, and other ongoing payments; business credit cards can be used so that monies do not come out of the business's cash accounts. As soon as a customer pays his or her bill, the credit card bill can be paid.

Many business credit cards also come with business "perks," such as frequent travel discounts, higher credit limits, longer billing cycles, and lower interest rates. For example, the American Express¨ Business Gold Rewards Card is very popular among entrepreneurs. You can earn up to 40,000 bonus membership rewards points during the first year, enough for one round-trip free domestic ticket.

In addition, some business cards give business rewards, such as cash back options on the purchase of office supplies, while others offer flexibility to businesses that may not be offered with a standard, personal credit card. Finally, credit cards have zero liability for fraudulent charges, giving businesses added protection if their credit is used by an unauthorized party.

Processing Credit Cards

With the ability to shop on-line and run in and out of a store in the blink of a Visa swipe, business owners are realizing that customers hardly ever carry cash anymore. So what happens when a potential customer comes into your small business with only a MasterCard, but you only take cash? What if a customer searches for companies on-line with your specific product, but doesn't find you because you lack a Web site with on-line shopping? This is where a reputable Merchant Account Service is key.

A merchant account is a credit card business service set up by a financial institution, allowing businesses to accept credit cards as payment for goods or services. These companies process funds from respective credit card companies and then transfer the collected funds into the business's checking account.

There are two types of merchant accounts: traditional merchant accounts and on-line merchant accounts. Traditional merchant accounts authorize and transmit credit card payments using a credit card machine (swipe terminal), which is installed at the business. Online merchant accounts accept, authorize and process credit card transactions securely over the Internet.

Like any type of business partnership, merchant account providers should be researched thoroughly. The best way to find a suitable merchant account is to shop around and compare merchant accounting service companies, as many of them may try to take advantage of unknowing business owners with hidden fees, such as chargeback, pass through, minimum or termination fees.

Be sure to read any contractual agreement extensively before signing on the dotted line, as some contracts may carry a deposit business check into personal account clause. Be sure to read any contractual agreement extensively before signing on the dotted line, as some contracts may carry a non-cancellation clause.

Setting Up Accounting

Determining whether you will need a business bank account, credit card and merchant account service is imperative, but setting up the accounting for the business is also an important step. You have probably already determined what type of business you will be running, whether it is a corporation, sole proprietorship, or partnership. If not, this must be established, as your business structure will determine which type of accounting will be best suitable for your business' needs.

Once the business structure is established, the next step is to clarify the business' spending requirements. How many checks will you be depositing each week? How many checks are written? Does your company need the ability to deposit large amounts of cash? Is in-person banking a priority or will you be making deposits after hours via an automatic telling machine? These are just some of deposit business check into personal account questions that need to be answered in order to find out which type of bank accounting is right for you.

With each of the above, finding a reputable company is imperative, whether it is a bank, credit card company or a merchant account. Select a ace flare account direct deposit that is convenient to both your business and your lifestyle. In addition, be sure to choose the most appropriate type of account for your particular business.


Check Cashing: How to Do It Without a Business Bank Account

Cashing checks is an important task for businesses and consumers. While online payments are popular, people aren’t always trusting of this option. Because of this, having a business bank account in-place is key. However, some business owners prefer to operate without involving banks.

Topics Covered in this Article:

In this post, we’ll explain how to cash checks without a business bank account. We’ll also explain why it’s still prudent to have a bank account for your business.

What Happens When You Receive Business Checks?

If you’re a sole proprietor, your business is likely tied to your personal checking account. However, from a legal standpoint, there’s no protection of personal assets.

When you have a different business form, such as an LLC or corporation, receiving checks becomes a bigger issue. Customers will likely address the check to your business’s name. Without an account, it will be challenging to retrieve the funds.

Business vs. Personal Checks

Personal and business checks are essentially used the same way; both are drawn from an account holder’s bank account for the amount displayed on the checks.

However, one difference is that personal checks are usually the size of dollar bills and can fit easily in wallets. Business checks are larger, which helps banks recognize that it’s a business check.

For a check to be valid, it must contain several items:

  •  Account number
  • Bank name
  • Routing number
  • Valid date
  • The amount as a number and spelled out
  • Signature

Business checks will often contain security features not found in personal checks. For instance, many business checks have holograms or watermarks to help banks reduce fraud.

Common Issues with Cashing Business Checks

There are certain situations in which cashing business checks without a bank account can cause problems.

For example, let’s say that you receive a check from a customer, and it’s made out to your business’s name. However, you have yet to open a business checking account. What will happen with this transaction?

Unfortunately, without a business checking account, you may be unable to get the check cashed. The best course of action is to open a business banking account. Your other options are:

  • Ask the customer for a credit card number
  • Accept a wire transfer (which will be costly for your customer)
  • Ask the customer to write a new check to your personal bank account
  • Seek out a check cashing option that doesn’t require a bank account


Check Cashing Without A Business Bank Account

If you have a business bank accounts, cashing a check is easy. However, without a business bank account, it becomes more complicated.

If you can’t open a business bank account, here are your options for cashing business checks:

1. Walmart and Other Retail Stores

Most Walmart stores offer check cashing services. Businesses can present their checks to the Money Center or Service Desk, although check cashing isn’t available in every state.

The company charges fees based on the transaction type, and you’ll have the choice of getting the money in cash or via a Walmart MoneyCard (which may come with additional fees).

In most cases, Walmart won’t cash checks for amounts greater than $5,000. Santander com internet banking, you can cash multiple checks when each is below that limit.

To cash a check, Walmart will ask for valid government-issued identification and may also require additional verification.

Other retailers, such as supermarkets and drugstores, offer check-cashing services, but they may not accept business checks.

2. Check Issuing Banks

Usually, if you go to the issuing bank to have your check cashed, they can verify the account is legitimate. However, depending on the bank, you may be charged a processing fee. This fee may be waived if you decide to open an account at this bank.

If you can deposit business check into personal account a friend or family member who has an account at the issuing bank, you may be able to avoid fees. Fear not for i am with you always kjv bank could use this person’s account to back the check for your business. However, this option shouldn’t be used as a long-term solution, as this person will need to be available for every check cashed.

3. Specific “Money Centers”

Money centers are usually willing to cash business checks, but they usually come with fees and require an application.

When utilizing money centers, you’ll receive cash quicker than you would if you went to a bank. However, the fees charged are higher, because that’s how the centers make money.

4. Checking Cashing Stores

You’ll likely see stores in small neighborhoods that offer check cashing services. They’re usually lenient when cashing business checks, but can be expensive.

The fees charged are usually based on a percentage of the check amount and can be for 5 percent or more. For smaller checks, this may not seem like much, but if you use this service often, the fees will add up.

5. Prepaid Debit Card Transfer

Opening a prepaid debit card can help when cashing business checks.

Mobile apps such as InGo allow you to scan your business checks and add cash to your prepaid debit card, minus a fee. If you’re willing to wait ten days, the company may waive the fees, as long as the check clears.

It’s important to note that prepaid cards expire eventually, but your funds will remain safe. If this occurs, you must open a new prepaid debit card and transfer your funds (which comes with a fee).


Why a Business Bank Account Is Important

Opening a business bank account shows your customers that your business is legitimate, and makes depositing checks much easier. Although there’s in-store and online check cashing services that don’t require a bank account, they typically aren’t recommended as a long term financial solution.

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Editor’s Note: This post was updated for accuracy and comprehensiveness in April 2021.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Post by: Fora Financial

Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].


Checking Accounts: Understanding Your Rights

You already know in many ways how your checking account works. You write paper checks, withdraw money from an automated teller machine (ATM), or pay with a check card. Your paycheck might go by "direct deposit" into your account, or you might deposit checks at a bank's teller window or ATM.

But recently, you might have noticed changes in your checking account. The checks you write might be "clearing"—the money is being taken out of your account—more quickly. Some checks you write might be listed as "ACH" transactions on your bank statement. Instead of receiving cancelled checks back from your bank, you might be receiving "substitute checks."

In This Section

What's happening? 

Checks are being handled in some new ways these days and those changes can affect how you handle your money.

  • Some checks are now processed electronically and the original paper checks are destroyed.
  • Checks can be processed more quickly and your checks might be clearing faster.

You might not be able to get your original checks--or even copies of your checks--back from your bank.

Electronic processing may be even more common in the future, but one thing will not change: You will continue to have the right to dispute any mistakes and clear up problems with your account, whether or not you have the original check.

Does it matter if my check is processed more quickly? 

Traditionally, when you wrote a check, the paper check was transported from bank to bank before the money was taken out of your account. Now that many checks are being processed electronically, money may be taken out of your account more quickly. To avoid bounced checks and related fees, you must be sure you have enough money available in your account to cover each check when you write it (and when you withdraw funds at an ATM).

Although electronic processing might mean that the check you write will clear more quickly, the funds that you deposit might not be available to you any more quickly. A federal rule governs the maximum time your bank can wait before making deposited funds available to you, and that rule hasn't changed. That's why you need to know exactly how much money is available in your account at the moment you write a check. For example, money from a check you deposit on a Monday might not be available until the following week. So, if you count on that deposit when you write a check on Tuesday to pay a bill, that check might bounce.

Also, be sure that the available account balance you're counting on does not include funds from your bank's "overdraft protection" program. It's possible that an account balance statement could include an overdraft protection amount, which could lead you to believe you have more money in your account than you really do.

What are the different ways my check can be processed now? 

Remember, the way your check is processed will affect how quickly your check will clear and you have only limited ability to control the way your check is processed. A check you write can be processed in several ways:

  • Under the conventional method for processing paper checks, the check you write to a merchant (for example) is deposited by the merchant at the merchant's bank and the original paper check is then shipped from bank to bank. This process could take a few days.
  • A new federal law known as the "Check 21 Act" makes it easier for banks to create and send electronic images of paper checks. Even before Check 21, banks were allowed to process checks electronically when all the banks in the process agreed. Under Check 21, any bank may create a special paper copy—called a "substitute check"—using images of the front and back of an original check. If any bank in the process requires a paper check, another bank can send a substitute check in place of the original.
  • Under an Electronic Fund Transfer (EFT) process, a merchant or other party (such as a utility company) can change your paper check into an electronic "debit" that is paid from your checking account. The debit may be paid from your account much more quickly than if a check had been processed in the conventional way.
    • One kind of EFT uses the Automated Clearing House (ACH) network, which a merchant or company can use to convert a paper check into an electronic payment. For example, if you mail a check to your credit card company, the company may convert that check to an ACH payment. The company generally would destroy the original paper version and keep only an electronic image of the check.
    • Sometimes, a paper check can be turned into an ACH transaction right in front of you. For example, when you write a check at a retail store, the clerk might scan the information from the check, stamp your check "void" and hand it back to you, and then send the payment information to the merchant's bank electronically.

Can I tell how my check is being processed? 

You probably will be able to tell how your check was processed, after the fact, by looking at your bank statement. Your bank is required to list every EFT transaction in your monthly bank statement, including the dollar amount, the date the transaction cleared, and the name of the recipient. Electronic transactions may be grouped together, apart from your regular check transactions.

If you receive a paper substitute check, you will be able to identify it by this statement: "This is a legal copy of your check. You can use it the same way you would use the original check."

If a merchant wants to turn your paper check into an EFT, the merchant should give you notice that your payment will be processed that way. There might be a sign at the cash register, or the cashier could inform you.

May I choose the processing method for my check? 

Not usually. Check processing involves several parties-you, the person you're paying, that person's bank, and your bank. Each party has an interest in efficient, reliable check processing. Somewhere along the line, one of the parties might choose to process your payment electronically.

However, you can contact a party to whom you regularly mail checks, for example, the phone or credit card company, and tell them not to turn your paper checks into electronic ACH transactions.

Can I get my cancelled checks with my bank statement? 

No law requires your bank to send you your cancelled checks. If you receive your checks or copies of checks, that's usually because of your customer agreement with your bank and your bank's policies. Many consumers don't receive their checks or even copies of their checks.

If you've usually received cancelled checks with your bank statement, you could start receiving substitute checks—the special paper copies created under the Check 21 Act—instead of, or in addition to, cancelled checks.

Even if you do not usually receive cancelled checks, you may ask your bank to provide you with copies of specific original checks, or the cancelled checks themselves. In most cases, your bank will be able to give you a copy of the check. But your bank might not always be able to. When a paper check is processed electronically, the original check is typically destroyed.

What if something goes wrong? 

Let's say the wrong amount was deducted from your checking account. Or maybe you've discovered a payment that you never authorized. No matter how your check was processed, you should contact your bank right away. The bank might be able to clear up the problem quickly.

Even without a cancelled check, you can prove you made a payment with your bank statement, which shows the date and amount of the payment. You also might have a receipt from a retail transaction. In any case, the law does not require you to have the original paper check, or even a copy of it, to resolve a problem with a bank.

Generally speaking, you will not be held responsible for processing errors or transactions you did not authorize. Different laws and rules apply, depending on how your check was processed.

  • Under conventional check processing procedures, you won't generally be held responsible for payments you didn't authorize. The applicable law is a state law called the Uniform Commercial Code (UCC). Your precise rights, the length of time you have to file a claim, and the way you can file a claim, may differ depending on how the UCC was adopted in the relevant state.
  • The UCC also applies if a substitute check is involved, but so does the Check 21 Act. Check 21 provides for a special refund called an "expedited recredit" that applies only if you received a substitute check. To obtain this refund, you generally should contact your bank within 40 days of the date your bank provided you with the substitute check, or the date of the bank statement showing the problem. You must submit your claim in writing, along with information necessary for the bank to investigate. If the bank determines that your claim is valid, the bank must credit your account by the end of the next business day. If 10 business days have passed since you filed the claim and the bank has not determined whether the claim is valid, the bank must credit your account for at least part of the amount in question while it continues to investigate.
  • Electronic payments, including those involving ACH (such as a converted check), are governed by the federal Electronic Fund Transfer Act and Regulation E. You generally have 60 days from when you received the bank statement showing the error to notify your bank about the problem. Within 10 days after you notify the bank, the bank is required to investigate its records for an error; if the matter is still unresolved after 10 days, the bank must temporarily credit your account for at least a portion of the disputed amount and continue investigating for 45 days.

What if I made the payment another way? 

Rules that govern EFT payments will apply if you make an ATM withdrawal, or if you use a debit card (check card), debit card number, or your checking account number without writing a paper check.

You could also make a payment through a "demand draft" or "remotely created check" (RCC) by authorizing someone to withdraw money from your account without your signature. For example, you could authorize your credit card company over the phone to make an RCC for payment on your credit card account before the monthly deadline. The Uniform Commercial Code applies to RCCs. While RCCs can be useful, you must trust the person or company you allow to create an RCC because the RCC does not include your signature, and proving that you did not authorize the payment could be hard.

What if I can't resolve a problem with my bank? 

Contact your bank first. You might also contact the recipient of the payment. If you are unable to resolve the problem through the bank, and a national bank is involved-a national bank has the words "National," "National Association," or "N.A." in its official name-you may contact the Customer Assistance Group at the Office of the Comptroller of the Currency toll free at 1 (800) 613-6743.

For complaints about state-chartered financial institutions, contact the relevant state attorney general or state banking department. Links to state attorneys general can be found on the Website of the National Association of Attorneys Generals. The Conference of State Bank Supervisors lists state banking department links. You may also contact the Federal Reserve Board, or the Federal Deposit Insurance Corporation regarding state banks that are not members of the Federal Reserve System.

If you have a problem with the recipient of your check—an entity other than a financial institution, such as a department store—contact the Federal Trade Commission toll free at 1-877-FTC-HELP (1 (877) 382-4357). More information about contacting the FTC is on the Web.


1Webster Premier Checking: Minimum opening deposit of $500 is required. You can avoid a $21.95 monthly maintenance fee by keeping $20,000 in combined monthly average checking, money market, and savings balances or $50,000 by adding CDs, home equity, and installment loan balances (excludes mortgages, refinanced student loans and savings secured loans) as of the end of your statement period; and monthly average investment balances (excluding the last day of the month). Fees may reduce earnings. Premier Checking is a tiered rate product. The tiers are $0 to $2,499.99, $2,500 to $9,999.99, $10,000 to $24,999.99, $25,000 apple pencil 1st gen charger $49,999.99, and $50,000 and over. The APY (Annual Percentage Yield) for Premier Checking as of 06/01/2021 is 0.01% for balances of $0.01 to $49,999.99 and 0.01% for balances $50,000.00 and over, and is subject to change at any time. Tax reporting may apply. Product features are subject to change at any time.

Premier Checking ATM Benefits: Webster will not charge any fees for checking withdrawals at non-Webster ATMs. If you are charged a fee by another bank for checking withdrawals at its ATM, we will rebate the fee.

2Webster Value Checking: Minimum opening deposit of $50 is required. You can avoid the $11.95 monthly service fee when you meet ONE of the following during your monthly statement cycle: a) maintain a monthly average balance of at least $1,000; b) are age 65 or older and have at least one direct deposit; OR c) have cumulative direct deposits of $500 or more each month. Delivery of statements electronically is free; those accounts not enrolled in Statement eDelivery will receive a $2 monthly paper statement fee. This fee is waived for account holders age 65 and older or 18 and younger.

3WebsterOne® Relationship Checking: Minimum opening deposit of $50 is required. You can avoid a $16.95 (or $14.95 with direct deposit) monthly maintenance fee by keeping $4,000 in combined average checking, money market and savings balances during your monthly statement period or $20,000 adding CD, home equity and installment loan balances (excludes mortgages, refinanced student loans and savings secured loans) as of the end of your statement period. Rates and fees may vary by state and region; fees may reduce earnings. The APY (Annual Percentage Yield) for WebsterOne Relationship Checking is subject to change at any time.

4Webster Student Checking: Minimum opening deposit of $50 is required. No monthly service charge for 5 years after opening or switching to this account. After 5 years, it will convert to Webster Value Checking. A valid student ID is required; if it is not provided within 60 days of account opening account will convert to Webster Value Checking. You must be at least 18 years old to open an individual checking account at Webster. A student at least 15 years old may open a joint Student Checking account with another individual who is at least 18 years old. Each joint owner has full control over the account and is responsible for the activity of the other owner, including the activity of a minor who is a joint owner. See your Deposit Account Disclosures for more details on Joint Ownership Accounts.

Student Checking ATM Benefits: Per statement cycle, Webster will not charge for up to 4 ATM fees associated with using non-Webster ATMs. If you are charged a fee by another bank for using its ATM, we will rebate 1 fee per statement cycle. Product features are subject to change at any time. Insufficient Available Funds Fees: 1 fee will be rebated per academic year (September to August).

5Opportunity Checking: Minimum opening deposit of $50 is required. The monthly service charge will be $16.95 (or $11.95 with direct deposit). Visa debit card purchases using the "credit" option are limited to $250 per calendar day. Other miscellaneous fees may apply. Delivery of statements electronically is free; those accounts not enrolled in Statement eDelivery will receive a $2 monthly paper statement fee. This fee is waived for account holders age 65 and older or 18 and younger.

*Special Loan Discounts – Automatic Loan Payment Offer: Customers with any personal Webster checking account are eligible to receive an automatic payment rate discount on Home Equity Loans and Lines, Mortgages and Personal Loans. To receive the rate discount, an automatic payment deduction (ACH) is required from your Webster Bank personal checking account. This discount does not apply to Government Assisted Mortgages. Mortgages over $1,000,000 are not eligible for the discount.

All loans and lines are subject to the credit approval process. Product features, APY and/or offers are subject to change without notice and may be withdrawn at any time. Rates and fees may vary by state and region. Other restrictions may apply. Cannot be combined with any other offers from Webster or its affiliates. See a banker for details. Tax deposit business check into personal account may apply. Other miscellaneous fees may apply and reduce earnings.

**Delivery of statements electronically is free; accounts not enrolled in paperless statements will receive a $2 monthly paper statement fee. This fee is waived for account holders 8 and younger or 65+.


5 Replies to “Deposit business check into personal account”

  1. Thats great to knw! When you receive it make sure to transfer to ur personal savings 🤍🤍🤍

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