Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Updated on Monday, January 4, 2021
Experts recommend monitoring your checking account for irregularities and transaction accuracy at least once a month. However, there are benefits that come with monitoring your account on a more frequent basis.
Not only is monitoring your checking account activity on a regular cadence a healthy financial habit to adopt — it could end up saving you thousands of dollars in liability losses in the event of theft or fraud. We delve into the importance of routinely monitoring your checking account and also offer some tips for effectively doing so.
- Why it’s important to monitor your checking account
- How often should you monitor your checking account?
- Tips for monitoring your checking account
Why it’s important to monitor your checking account
There are an array of benefits associated with monitoring your checking account, including catching fraud, finding hidden or excess fees and keeping your financial life organized. Effectively monitoring your checking account consists of combing through your account statement for any unauthorized transactions or charges on a regular basis.
The most significant argument in favor of monitoring your checking account on a consistent basis is that it can save you thousands of dollars in liability losses. In the event of theft or fraud, the Electronic Fund Transfer Act protects your funds. Under this act, if you report your debit card or ATM card as lost or stolen, you are not responsible for any unauthorized transactions that follow.
However, if someone makes an unauthorized transaction before you report your card as missing or stolen to your bank, the amount you will be responsible for is based on how quickly you report it. You could also be on the hook for charges if someone makes unauthorized transactions with your debit card number, even if your card is not technically lost.
The chart below outlines how much you are liable for based on when you report a theft or fraud:
|Liability Based on How Soon You Report Theft or Fraud|
|When you report the theft or fraud||Maximum loss|
|Before any unauthorized charges are made||$0|
|Within 2 business days after you learn about the loss or theft||$50|
|More than 2 days after you report the loss or theft, but less than 60 calendar days after your statement is sent to you||$500|
|More than 60 days after your statement is sent to you||All of the money taken from your checking account, and any money taken from linked accounts|
Monitoring your checking account on a regular basis allows you to catch any irregularities or unauthorized transactions more quickly, so that you can promptly report the fraud and limit your responsibility for any unauthorized transactions.
Find hidden fees
Combing through your checking account on a consistent basis also can be a great way to catch surprise fees. Common fees that can be surreptitiously charged to your checking account can include:
- Monthly maintenance fees
- Per check fee
- Check printing fee
- ATM fee
- Returned deposit item
- Overdraft fees
- Stop payment fee
If you encounter any unexpected fees — or believe you are being overcharged for a fee — you may want to speak with your financial institution about it getting waived or lowered, or re-assess whether your checking account is the best fit for you.
Keeping tabs on the transactions and activity of your checking account is an important part of money management. By understanding exactly how much you are spending and what you are spending it on, you can build a budget and cut back where you need to.
Additionally, by consistently monitoring your checking account, you will have a good grasp on what your current balance is, making it less likely that you’ll overdraft and get slapped with a fee. Aside from spotting potential theft or fraud and excessive fees, these are added bonuses to monitoring your checking account.
How often should you monitor your checking account?
You should monitor your checking account — at the very minimum — at least once per month, according to Ken Tumin, founder of DepositAccounts.com. Due to Regulation E, which covers the rights, responsibilities and liabilities that come with electronic fund transfers, Tumin explained, consumers aren’t responsible for lost funds as long as they notify the bank of the error within 60 days of them issuing the statement.
“Thus, one could recover from fraudulent withdrawals by checking (your account) only once every other month,” Tumin said. “But it’s easier to make it a habit by checking once a month.”
In fact, Tumin recommends enabling account alerts to stay on top of your account activity on a more frequent basis.
“At most banks, you can set up alerts so the bank will text you when certain transactions occur or certain balances are reached,” he said. “So you could set it up to text you on any withdrawal or when the balance falls below a certain amount.”
Tips for monitoring your checking account
Not sure how to stay on top of monitoring your checking account? You can keep tabs on your checking account in a number of different ways:
- Check your monthly statement: Review your monthly statement and compare the transactions to your receipts.
- Use your bank’s mobile app: Check your recent activity via your financial institution’s mobile app and compare it to your receipts.
- Sign up for automated alerts: Make sure to set up automated alerts that notify you when certain transactions occur or when a certain balance is reached.
- Report suspicious activity: If you notice any suspicious activity, contact your financial institution immediately,