Checking account
A checking account is a type of deposit account kept at a bank or credit union (where they are called share draft accounts) in which the owner of the checking account (depositor) is permitted to write orders for payment (checks) upon the account which may then be negotiated (cashed) by others. In the United Kingdom the equivalent type of account is called a current account.
In some cases, checking accounts may pay interest. Checking accounts that pay interest are sometimes referred to as a negotiable order for withdrawal or now account in order to differentiate them from the older 'standard' checking account due to rules passed back in the 1930s which prohibited banks from paying interest on checking accounts.
Typically, a the format of a check consists of the date it was written, the party to whom it is payable, the amount that is payable, the identification of the bank it is drawn upon and the account number of that bank, and a signature or other identification indicating the check was authorized by the depositor. There will usually be a series of routing numbers appearing at the bottom of the check, printed using a special type of font called MICR and using magnetic ink so that it can be read by machine.
While in many cases, checks are more and more being displaced by electronic transactions including direct deposit, ATM, check card and credit card purchases, billions of checks are still written every year in the United States alone.
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