How did the Checking Account Appear? - written by Christov Bryant

The idea of the checking bank account didn't crop up until the beginning days of the 1500's. It came about in the Netherlands during a period when Amsterdam was a vital center for commercial pursuits. Merchants, who were amassing hefty quantities of money, required a safe location to keep their notes.

"Cashiers" arose to fuflill this want. Cashiers would store the money in order to obtain a charge on the account. You may not be a merchant, however, is this beginning to seem recognizable yet?

Before long a vast demand came about because of growing competition as even more individuals rushed into becoming cashiers. This caused the cost of having your funds held by a cashier to decrease rapidly. It also forced the cashiers offering accounts to begin looking for better and more attractive ways to catch the attention of customers.

The innovative methods of building customer interest took the form of original services granted to a client. Very similar to modern banks, these cashiers required something unique in order to woo merchants. Those innovations today are hard to compare to those of the early 1500s. Yet, it is imperative to realize that today we take the modern checking account for granted. Back in the day it was still developing because banking was still quite young.

The idea that someone could come in with a note from a client that would allow them to take cash directly from the client's holdings in that time was a never before conceived way of doing business. This capability was the most important of the innovative services that came about in order to fill the demand and to woo customers. Such a note today is commonly known as a "Check." In much the same way as a cancelled check is held on to as a record, the note of those days from the client was held back then to provide confirmation of the transfer of funds.

This original improvement really gave a means to the merchants allowing for the transfer of capital to happen in a more efficient way. Such an improvement in efficiency helped to improve the profitability of trade and of the merchant profession.

As a result of the transience of the traders, the concept of what we now know of as the checking account before long spread to other ports beyond the Netherlands. These ports included England, a major world power, and her many colonies upon which the sun never sets. Some of these colonies included all that existed in what would become the USA.

This idea extend to the primary US colonies in 1681. Massachusetts land lords began mortgaging their land holdings to the cashiers who created accounts that the landlords could then use to write checks.

The modernization of the modern checking account did not arrive until afterward. It wasn't until the seventeen hundreds that checks in the sense that people know them at present began to appear. In England, banks started to print checks on behalf of their depositors. Such checks had unique numbers printed on them to assist with keeping track of them. In fact, it was not until this time that the word "check" began being used to talk about these financial notes.

The seventeen hundreds truly started the time during which these, at one time, fresh services began to be harmonized and prevalent. This is the period when enough banks began to normalize their checks that there came about the predicament of getting checks cleared. This created the need for the invention of the first clearing houses meant for formalizing the task of processing of checks.