By Alan J. Carper Bob Jones University Press. 2010

1. By Alan J. CarperBob Jones University Press. 2010 “ECONOMICS” Personal Finance

2. “Opening & Maintaining A Transaction Account”

3. Objectives: • Name the four common kinds of transaction accounts • Describe the proper way to write a check

4. Biblical Integration: • We need to constantly remember our treasure is not in this world, but in heaven. We can not find satisfaction in earthly wealth. (Matt.6:19-21; Mk 10:21-25)

5. Opening A Transaction Account • Must be of legal age (18 yrs.) • Fill out a signature card • Have the minimum amount to deposit * Joint Account – shared by two or more individuals a. right of survivorship – death of the one becomes the property of the other b. tenants in common – without right of survivorship (Carper 204)

6. Opening A Transaction Account Writing Checks 1. Date: a. postdated – bears a future date b. staledated – bears a date more than six months old 201 Mar. 3 20XX _____ (Carper 204) (Carper, )

7. Writing Checks Payee - the one receiving the payment (DO NOT LEAVE THE PAYEE BLANK) 201 Mar. 3 20XX _____ Calvary Murrieta Christian School (Carper 204)

8. Writing Checks (cont’d.) Amount: • Write out the numeral amt. (Ex. $50.00) on payee line. • Write out the amount in words (Ex. “Fifty and 00/100”) – then make a line all the way to the words “dollars.” 201 Mar. 3 20XX _____ Calvary Murrieta Christian School 50.00 Fifty & 00/100---------------------------------------------------------------- (Carper 204) (Carper, )

9. Writing Checks Signature – sign your name the way you signed your signature card. (If you signed using “Joe” don’t sign it “Joseph” – it’s okay to leave out words, but don’t add words.) 201 Mar. 3 20XX _____ Calvary Murrieta Christian School 50.00 Fifty & 00/100---------------------------------------------------------------- Jane Cash (Carper 204)

10. Making Deposits Cash or Coins – enter the correct amount in the correct area on the deposit slip. $50.00 Date Mar. 3 20XX____ (Carper 204)

11. Checks List each check on the deposit slip with the routing number (ABA No.) enables bank to locate check if lost in transit (processing). $50.00 16-4 25 00 Date Mar 3 20XX $75 00

12. Endorsements Acknowledges receipt of amt. written on the check. John Cash For deposit only 111-1111111 Endorse above line (Carper 208)

13. Endorsements • Four Ways: • Blank Endorsement: - Signature of name listed “EXACTLY” as it is on the face of the check (including initials). If the check lists “Joe and Jane Cash” then both Joe and Jane have to sign the backside of the check. John Cash Jane Cash Dangerous – if lost with signature anyone can sign there name under endorsement giving them the rights to the check. Do Not Endorse Below Line

14. Endorsements Special endorsement – used to sign check over to another (Ex. “Pay to the order of ___”) this gives them the right to the check. Pay to the order of xxxxxxxxxxxxxxxx This is referred to as a Third party check – not very many financial institutions will except unless they can verify the original party to the check.

15. Endorsements Restrictive Endorsement - “FOR DEPOSIT ONLYto the account of___“ or “FOR DEPOSIT ONLY” – followed by your account number. For deposit only 111-1111111 For deposit only to the account of John Cash 111-1111111 (Carper, )

16. Endorsements Conditional endorsement – Stipulates the conditions under which the check may only be cashed. (Ex. “Pay to the order of Joe Cash only upon completion of garage construction”) followed by your signature. NOT ADVISED. Pay to the order of Joe Cash only upon completion of garage construction

17. Stop Payment Stop Payment Order – placed on a certain check asking the financial institution to not pay the funds. Most institutions charge a fee for this service – unless it is a free service attached to your account. (Financial Institutions do not guarantee 100% that the check(s) will not be cashed.) (Carper 207)

18. Reconciling Biggest responsibility Bank of America Account Statement John Cash Statement Period: Jane Cash March 23 through April 21, 20XX 23 Check Avenue Statement Town, CA Acct. No. 111-1111111 ______________________________________________________________________________ Beginning Balance on 3/23/04: $50.00 Deposits: Total Deposits +75.00 4/01 $75.00 Total Checks -25.25 Total Deposits $75.00 Service Charge 5.00Checks Paid: Ending Balance $94.75 1223 4/07 $25.25 (Carper 208)

19. Guaranteed Checks • A check that is affirmed by a bank or other reputable backer in order to be cashed by the payee. • Four types: 1. Certified Check 2. Cashier’s Check 3. Money Order 4. Traveler’s Checks (Carper 205)

20. Saving Generating Money to Save • Finding enough money to save is the key complaint. Two Phases to Saving: 1. Reduction of Expenditures = BUDGET 2. Setting Aside a Certain Amount = BUDGET

21. Savings Information • Floating-Rate Accounts Most popular: 1. NOW 2. Super NOW 3. Share Draft Accounts 4. Money Market Deposit Accounts (MMDA’s) 5. Money Market Mutual Fund Accounts (MMMF’s) (Carper 306)

22. Savings Information Time Deposits 1.fixed interest rates 2. may require certain dollar amt. 3. may carry a certain mature date (Carper 306)

23. Certificates of Deposits (CDs) i. Certain amt. required ii. Mature date iii. Fixed interest iv. Penalty for early withdrawal (Carper 306)

24. Savings Information Government Securities Most Popular: 1. U. S. Savings Bonds a. Series EE Bonds 1. Purchased indenominations of$50 to $10,000 (Purchaser only pays half the face value) b. Series HH Bonds - similar to EE Bonds differ in three ways: i. Purchased for full face value ii. Not bought with cash – ONLY by rolling over EE Bonds iii. Interest paid via treasury checks to bondholder (Carper 307)

25. Works Cited Carper, Alan. Economics. Greenville: Bob Jones University Press, 2010.