Stop Bank Fraud and Fees: Benefits of Monitoring Your Checking Account

Learn the importance of regular checking account monitoring to stay on top of your spending, catch fraudulent activities early, and improve your financial health with various tools and techniques.
Written by Anna Baluch
Financial Expert
Managing Editor
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It’s all too easy to forget about your checking account, especially if you know you have enough money for your expenses.

However, keeping a close eye on your account is essential if you’d like to stay on top of your spending, increase your savings, and catch fraudulent activities. Fortunately, electronic banking makes it easy to do just that.

According to a survey by the American Bankers Association, 48% of bank customers use apps on phones or other mobile devices to manage their bank accounts, while 23% use online banking via laptop or PC the most.

Let’s explore regular checking account monitoring and why it’s essential.

The Basics of Checking Account Management

When you open a checking account, you can deposit money into it through various methods, such as direct deposit, transferring from another account, mobile deposit, or depositing cash or checks at a bank branch or ATM.

You can also access your money using a debit card, writing checks, or making online transfers and payments.

Watching Your Checking Account for Issues

An overdraft or negative balance occurs when you spend more money than you have in your checking account and the balance dips below zero.

If you overdraw your account, you may be on the hook for fees and more serious consequences, like account closure.

Overdraft protection is an optional service that prevents overdrafts by automatically transferring funds from another source, such as another checking or savings account, into the account.

In addition to overdrafts, your checking account is at risk for unauthorized transactions and fraud. These issues can cost you a lot of time, money, and headaches, especially if caught late.

Regularly monitoring your checking account helps you keep track of your balance, ensures that all transactions are correct, and helps you spot any unauthorized activity quickly. It also lets you stay on top of your financial situation and avoid potential fees.

Common Checking Account Terms

Which Banks Have the Lowest Checking Accounts Fees?

Plenty of checking accounts have no fees, but if you use a traditional, big-name bank, you could be paying too much.

Here are our top checking account picks for those who want to save on checking account fees and enjoy the convenience of online banking.

Benefits of Regular Checking Account Monitoring

There are several reasons you should keep an eye on your checking account regularly, including the following:

Early Fraud Detection

By checking your account often, you’ll be able to spot fraud early on and respond quickly. 

If a thief makes a small transaction and you catch it right away, for example, you may be able to stop them from making a larger transaction. 

“Spotting unauthorized charges early allows you to report them to your bank promptly, minimizing your liability and preventing further fraudulent activity,” explains Taylor Kovar, CFP and founder of 11 Financial.

Fee Avoidance

If you know what’s happening in your checking account, you can avoid overdraft and other fees, such as returned payment fees.

Since one overdraft fee can run around $34, account monitoring is well worth it.

Improved Financial Management

When you know what’s happening in your checking account, you’ll have better control of your finances. 

You’ll find it easier to stick to your budget and reduce the risk of overspending.

Account Balance Awareness

Regular monitoring helps you stay aware of your account balance, ensuring you have enough funds to cover upcoming bills and preventing the inconvenience of declined transactions.

This awareness allows you to make informed decisions about your spending and saving.

Identifying Errors and Discrepancies

Regularly reviewing your account can quickly identify errors or discrepancies, such as incorrect charges or deposits.

Addressing these issues promptly with your bank can prevent potential complications and ensure your account remains accurate and up-to-date.

How Often Should You Check Your Account?

“It’s advisable to check your checking account at least once a week. This ensures you stay updated on your account activity and can promptly address any discrepancies or suspicious transactions,” says Kovar.

“However, if you have a high volume of transactions or frequent financial obligations, consider checking your account more frequently, even daily,” he adds. At the end of the day, the frequency at which you should check your account depends on your unique situation and particular goals.

If you check your account every day, you’ll understand how much you’re spending on a daily basis. You won’t be surprised when you log into your account because you’ll always know where you stand from a spending and saving perspective.

While daily checking account monitoring can be beneficial, monthly reviews are also critical.

By diving deep into your checking account activity every month, you’ll gain comprehensive oversight and gain a big picture or bird’s eye view of your finances.

Tools and Techniques for Effective Account Monitoring

Fortunately, several strategies can make it easy to monitor your checking account.

Mobile Banking Apps

If your bank or financial institution has an app, you may want to download it to quickly check your account status while on the go.

Most apps also allow you to set up alerts and receive notifications for fraud or when your account balance goes below a set threshold.

These alerts can be customized to notify you of various activities, such as deposits, withdrawals, or large purchases, helping you stay informed about your account’s activity in real time.

Budgeting Tools and Apps

In addition, there are many free and low-cost budgeting tools and apps that you can integrate with your checking account.

These tools can help you categorize your spending, set budget goals, and track your financial progress.

Some popular options include Pocketguard, YNAB (You Need A Budget), and Empower.

These apps provide insights into your spending habits, help you identify areas where you can save money, and ensure you stay within your budget.

Regular Account Statement Reviews

Another helpful technique is regularly reviewing your account statements.

Many banks offer electronic statements, which you can access through online banking platforms.

By examining your statements monthly, you can verify all transactions, spot any discrepancies, and ensure that all charges are accurate.

Account Reconciliation

You can also use bank account reconciliation to keep your finances in order.

This involves comparing your account records with your bank statements to ensure they match.

Reconciliation helps you promptly identify errors or unauthorized transactions and keeps your financial records accurate.

Traditional Methods

For those who prefer traditional methods, keeping a check register is an effective way to track account activity manually.

Recording every deposit, withdrawal, and check written can help you maintain an up-to-date account balance and avoid overdrafts.

Automatic Account Monitoring Services

Lastly, consider using automatic account monitoring services from some banks and third-party financial services.

These services can offer additional features, such as credit score monitoring, spending analysis, and financial planning tools, to give you a comprehensive view of your financial health.

Using these tools and techniques, you can effectively monitor your checking account, stay informed about your financial status, and avoid potential issues such as fraud, overdrafts, and budgeting pitfalls.

How a Banking Expert Deals With Her Checking Account

“I personally monitor my account daily because I have been a victim of fraud. I sent a check in the mail to my utility company, and that compromised my account number. The perpetrator was able to gather just enough information about me and my account, and they were able to withdraw a substantial amount of money,” says Kimberly Kelley, an Assistant Branch Manager with Addition Financial Credit Union.

“Had I not noticed, my mortgage would have been rejected and so would any other bills that were scheduled to clear my account.

To top it off, I was out of the country when this happened and could have potentially had my entire account withdrawn, leaving me with no money. I was able to get my money back eventually, but had I not caught it, it would have caused many other issues,” she explains.

Checking Your Checking Account: What Works Best for You?

As you determine how often you should review your checking account, keep the following in mind:

Account Activity Level

How often do you use your account? If you use it every day, daily or weekly monitoring is likely your best option. However, monthly or quarterly monitoring may be sufficient if you only use it occasionally or in specific situations.

Personal Financial Goals

Consider what you hope to accomplish financially. If you’re saving for a car you’d like to buy in the near future, for example, you may be more motivated to check your account frequently to ensure you’re not overspending and have enough funds to allocate to your savings account.

Use of Mobile Cash Services

“If you use mobile cash services, for example, cash app or Venmo, then you also need to monitor that the transactions are done accurately. The key is not to impact your financial stability by not watching the movement in your bank account,” explains Kelley.

“Also, recent financial changes, ongoing bill payments, or concerns about account security may call for more frequent monitoring,” says Kovar.

Dealing with Issues: Steps to Take When You Spot a Problem

If you notice unauthorized charges on your account, Kelley recommends contacting your bank or financial institution immediately.

Depending on the situation, they may be able to freeze your account, reverse the transaction, or return your money. Here are the steps to take if you spot a problem with your checking account:

Step 1: Contact Your Bank Immediately

As soon as you notice an unauthorized charge or discrepancy, call your bank or financial institution’s customer service.

Most banks have a dedicated fraud or disputes department that can assist you. Provide them with all relevant details about the transaction in question.

Step 2: Freeze Your Account

Request your bank to freeze your account if you suspect fraud or multiple unauthorized transactions occur.

This can prevent further unauthorized activity while the issue is being investigated.

Step 3: Report the Transaction

Formally report the unauthorized transaction. Your bank may require you to fill out a dispute form or provide a written statement.

Keep a copy of any forms or correspondence for your records.

Step 4: Monitor Your Account Closely

After reporting the issue, watch your account closely for any further unauthorized transactions.

Regularly check your account balance and transaction history through online banking or your bank’s mobile app.

Step 5: Follow Up Regularly

Stay in touch with your bank to track the progress of your report.

Don’t hesitate to follow up if you haven’t received a resolution within a reasonable time frame. Persistence can help ensure your case is handled promptly.

Step 6: Update Account Security

Change your online banking password and update your security questions to safeguard your account.

Consider enabling two-factor authentication if your bank offers this feature, as it adds an extra layer of protection.

Step 7: Review Your Transactions

Review all recent transactions to ensure no other unauthorized charges have occurred.

This can also help you understand your spending patterns and identify any unusual activity more quickly in the future.

Step 8: Notify Credit Bureaus

If your personal information has been compromised, it’s a good idea to notify the major credit bureaus (Experian, Equifax, and TransUnion).

You can place a fraud alert on your credit report, which warns creditors to take extra steps to verify your identity before extending credit.

Step 9: File a Police Report

In cases of significant fraud or identity theft, filing a police report can be beneficial. This report can serve as additional documentation for your bank and credit bureaus and may be required to resolve certain disputes.

Step 10: Keep Detailed Records

Maintain detailed records of all communications with your bank, including dates, times, and the names of representatives you spoke with.

Document any steps you take to resolve the issue. This information can be valuable if further action is needed.

By following these steps, you can effectively address any problems with your checking account and minimize potential losses. Regular monitoring and prompt action are crucial to maintaining your financial security.

The Bottom Line

By regularly monitoring your checking account, you can take a proactive approach to your finances. You’ll be more likely to follow your budget, reduce the risk of fraud, avoid hefty fees, and improve your overall financial health.

While routine account monitoring will take time and effort, it will pay off tenfold.

Frequently Asked Questions

Is it a good idea to set up autopay from my checking account?

With autopay, you won’t forget to pay bills and incur late fees and other serious penalties. However, even if you set it up, you should still keep tabs on your checking account.

What are some checking account security measures I should implement?

To keep your checking account secure, take advantage of two-factor authentication. Also, ensure your password is strong and change it often.

What are the main risks of infrequent checking account management?

If you don’t check your account regularly, errors and discrepancies may go unnoticed. You may also delay fraud detection and accumulate fees that can affect your financial health.

About Author
Anna Baluch
Anna Baluch is a personal finance writer and expert who writes about financial topics ranging from personal and student loans to mortgages, debt relief, auto financing, and budgeting. As a contributor to MoneyRates, Anna’s insights are backed by her hands-on experience, exemplified by her achievement of paying off her mortgage in just 16 months, a journey she shared on the “Burn Your Mortgage” podcast in 2019. Her knowledge and expertise have appeared on personal finance platforms such as LendingTree, Business Insider, Credit Karma, Experian, American Express, Rocket Mortgage, U.S. News & World Report, and Policygenius. Anna is dedicated to guiding consumers toward making informed financial choices.
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