Bank accounts with cheque books

Benefits of cheque books

Although they’re much less popular than they once were, cheque books still offer a number of benefits in certain situations.

• • Reliable. If you live in an area where electronic banking services are not always available, having a cheque book linked to your account provides a convenient way to access your funds.
  • Send payments by post. If you need to send payments by post, cheques offer a more secure option than sending money.
  • No need to carry large sums of cash. Paying by cheque removes the need to carry a large amount of cash, providing extra safety and peace of mind.
  • Traditional method of banking. If you don’t feel comfortable taking care of your everyday banking needs online, using cheques provides an easy solution.

How cheques work

Cheques provide a simple and secure way to make payments using the money in your transaction account. Once you write a cheque, the person you make the cheque payable to can deposit it into their bank account.

The cheque is then returned to your bank to be verified and approved, in order to make sure you have enough funds in your account to cover the transaction. If everything is okay, your bank will then withdraw the necessary funds from your account and authorise payment to the person who deposited the cheque.

This system makes cheques a much more secure payment method than cash in many situations, but it also means payment takes much longer than other modern methods. Cheques take a minimum of a few business days to clear after being deposited in your account, so they’re not ideal if you’re looking for fast payment.

Which bank accounts offer cheque books?

Cheque books are still available on transaction accounts from almost every Australian bank, credit union and building society.

Not that long ago, you would have automatically received a cheque book whenever you opened an account, but with the rise of online payment options this is no longer the case. Instead, you will have to contact your bank or visit your nearest branch to order a cheque book, and in some cases you may have to pay a fee.

For example, CommBank customers who have the appropriate account can order a cheque book by phoning the bank or visiting their nearest branch.

Cheque books are available on everyday transaction accounts, providing another way to access the money in your account. Some banks offer cheque books with all their transaction accounts, while others will only offer them with specific accounts. Read the account terms and conditions or contact your bank for details on which accounts come with a cheque book.

How to compare bank accounts with cheque books

Make sure to consider the following features when choosing a bank account with a cheque book:

• • Cheque book option. In the modern world of online and mobile banking, don’t simply assume that all transaction accounts will include a cheque book. Check with your bank to make sure you can obtain a cheque book before you actually open an account.
  • Replacement cheque book. It’s also a good idea to look into how to get a replacement cheque book when you use up your first book. Some banks will automatically send you a replacement cheque book once you’ve written a “trigger” cheque towards the back of your current book. You may also be able to order a replacement through the Internet, over the phone or by visiting a branch.
  • Fees. Fees are a crucial consideration whenever you choose any type of bank account. As well as ongoing service fees and charges for specific types of withdrawals, read the fine print to find out whether there are any fees associated with the use of a cheque book. For example, can you write an unlimited number of cheques without incurring any extra fees, or will you need to pay a fee for each cheque you write?
  • Deposit and balance requirements. Some accounts require you to maintain a minimum balance in your account at all times. Others may require you to deposit more than a specified minimum amount each month and failing to do so may incur a monthly fee. If you do choose an account with minimum balance or deposit requirements, make sure you are able to meet those conditions.
  • Access options. In addition to cheques, how else can you access the funds in your account? Options may include online and mobile banking, ATM and branch withdrawals, and EFTPOS payments.
  • ATM networks. If the account features a debit card, it’s worth checking out the size of each bank’s ATM network to find out where you can withdraw cash. You could always use another bank’s ATM to do so, but you’ll be slugged with a fee for doing so.

Traps to avoid

The main issue to be wary of when choosing a bank account with a cheque book is fees. Some banks may charge a fee for each cheque you write, while others may only allow you to write a specific number of fee-free cheques in any given month.

For example, CommBank customers should be aware of two kinds of fees when writing cheques on personal accounts:

• A $2 fee may be charged for each cheque issued on your account and cashed over the counter at a CommBank branch.
• A $1.50 fee applies to cheques written by you and negotiated through the clearing system.

Meanwhile, if you bank with NAB and have a NAB Classic Banking, NAB Cash Manager or a NAB Retirement Account, you can write an unlimited number of cheques at no extra cost. As always, check the fine print to make sure you’re aware of any fees and charges that may apply.

Finally, remember that not only do cheques take a few days to clear, but the people you send them to may not bank the cheque immediately. So that you don’t get caught short, make sure there are always enough funds in your account to cover the cheques you have written.

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