What can an authorized signer do on a checking account?
An authorized signer on a checking account holds significant power and responsibility. Understanding the scope of their authority is crucial for both the account holder and the signer. In this article, we will explore the various actions an authorized signer can take on a checking account, ensuring that both parties are well-informed about the account’s management and usage.
1. Access to Account Information
The primary role of an authorized signer is to have access to the checking account’s information. This includes viewing account balances, transaction history, and other financial details. The signer can monitor the account’s activity and ensure that all transactions are legitimate and within the account holder’s expectations.
2. Make Deposits
An authorized signer has the authority to make deposits into the checking account. This can be done through cash, checks, or electronic transfers. The signer must ensure that the deposits are accurate and comply with the account holder’s financial goals.
3. Withdraw Funds
Similarly, an authorized signer can withdraw funds from the checking account. This can be done through cash withdrawals, checks, or electronic transfers. It is essential for the signer to exercise caution and ensure that the withdrawals are in line with the account holder’s financial needs.
4. Write Checks
One of the most common uses of a checking account is writing checks. An authorized signer can write checks on behalf of the account holder, ensuring that payments are made on time and accurately. The signer must be aware of the account holder’s spending habits and budget to avoid any financial discrepancies.
5. Set Up Direct Deposits
An authorized signer can set up direct deposits for the account holder. This includes setting up payroll direct deposit, government benefits, or any other recurring income. The signer must ensure that the direct deposit information is accurate and up-to-date.
6. Open Additional Services
An authorized signer can also open additional services for the checking account, such as overdraft protection, online banking, or bill pay. The signer must consider the account holder’s preferences and needs when making these decisions.
7. Close the Account
In certain situations, an authorized signer may have the authority to close the checking account. This can be done for various reasons, such as merging accounts or closing an inactive account. The signer must ensure that all financial obligations are settled before closing the account.
8. Monitor and Report Fraud
An authorized signer plays a crucial role in monitoring the account for any suspicious activity. If fraud is detected, the signer must promptly report it to the financial institution to minimize potential losses.
In conclusion, an authorized signer on a checking account has a wide range of responsibilities and powers. It is essential for both the account holder and the signer to understand the scope of their authority and work together to manage the account effectively. By maintaining open communication and exercising caution, both parties can ensure the account’s success and avoid any financial pitfalls.
