Question

List three specific reasons/ways your checking account balance decreases?

1) Insufficient funds
2) Bank fees
3) Withdrawals

Answer 1

A checking account balance decreases due to bank fees, withdrawals, and insufficient funds which may result in overdraft fees. Regularly managing and balancing your checkbook is essential to avoid these issues.

Step-by-step explanation:

There are several specific reasons your checking account balance can decrease:

• Bank fees: These are charges from your bank for managing your account and various services. They include monthly maintenance fees, ATM fees, and other service charges.
• Withdrawals: When you take out cash from your checking account, your balance decreases. This can be done at an ATM, through a teller, or when making payments with a debit card or checks.
• Insufficient funds: If you attempt to make a purchase but your account balance is too low, you may be charged an overdraft fee, which results in a negative balance and thus decreases your account.

Understanding these factors is important to manage your money, keep track of your cash flow, and avoid overdraft and the fees associated with insufficient funds. Balancing your checkbook regularly is vital to maintaining a healthy financial standing.