If a depositor does not ask for interest on his checking account he is often allowed, even by the largest banks, to keep a very low balance. Often a charge is made if the account is allowed to fall below fifty dollars or twenty-five dollars, but this custom is by no means universal. There is no direct profit to a bank in checking accounts that fall so low, and as all business is based on mutual benefit in the long run, I advise young men to try to keep their bank-accounts if possible always up to several hundred dollars or more. When the banker accepts your account, and gives you a pass book and a check-book, he has the right to expect certain things from you, as you have the right, legally and morally, to expect certain things from him.

First

In the First place, he has the right to expect a profit from your account. Banking is an expensive business. It costs a certain amount to handle every check that passes through the bank, and every account should contribute a portion to the expenses of the bank, however small. When your banker asks you to keep acertain balance, he is merely asking his right to a profit from your account. It is easily to be seen that if you keep a small balance, say ten dollars, and the banker furnishes you with stationery, does the necessary bookkeeping on the account (for your benefit as well as his), the earning power of that ten dollars, even if it were all invested at six per cent., would be insufficient to compensate him for the cost attending that account.

Second

Never overdraw. In national banks overdrafts are now forbidden, but whether they were or not, you have no right to ask it. It hurts your credit with the banker. It is a forced loan without security, and is poor business practise.

Sometimes an overdraft is allowed as a matter of accommodation, and sometimes in order that the credit of the drawer with the holder of the check may not be impaired; but it is bad practise, gets you in wrong all over and should neither be asked nor expected.

Third

Do not draw against "Uncollected funds." By uncollected funds is meant checks that have not been collected. For instance, if you have a balance of one hundred dollars, and deposit a hundred-dollar check and draw your own check for one hundred and fifty dollars, you have taken all the original deposit and half of the amount represented by the check just deposited. The banker must send that check, let us say to New York, and wait for advice that it is paid before knowing that it has been paid, which may take three or four days. You are asking him to pay out his money three days in advance of its receipt, a practise which good banks frown upon and will not allow.

Lastly

Lastly have your pass book balanced once a month. Doing these things consistently, your banker will be a good friend and you will be a good customer, in favor with one who can do you many favors.

There is one other service which your bank will perform for you, almost always without charge. It furnishes business information, suggestions and advice. It will obtain special information, through banks in other cities. Indeed this is the commonest and surest way of obtaining much valuable information. It is chiefly through your bank that reliable data may be had regarding investments and the standing of brokers or other business concerns both in your own and in other localities. Do you want to know about a firm in Dallas, Texas, for example? Ask your bank to write to a bank in Dallas for the information.

The man who puts money in the bank regularly and keeps a fairly good-sized balance there is in many ways in a better position than any one else to make favorable investments. Not only is he in a better position to obtain information, but if he needs money to complete his payments on some especially desirable investment he is in a position to borrow it. Innumerable men have made safe and profitable investments with the assistance of their banks. The banker is always glad to help a customer acquire property.