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BANKING AND CREDIT

Chapter 23. BANKING AND CREDIT. 23.1 Financial Institutions 23.2 Checking Accounts 23.3 Credit and Its Use. Lesson 23.1. FINANCIAL INSTITUTIONS. Objectives. Name and describe the four major types of financial institutions Discuss how electronic banking may change money management.

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BANKING AND CREDIT

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  1. Chapter 23 BANKING AND CREDIT 23.1Financial Institutions 23.2 Checking Accounts 23.3 Credit and Its Use CHAPTER 23

  2. Lesson 23.1 FINANCIAL INSTITUTIONS Objectives Name and describe the four major types of financial institutions Discuss how electronic banking may change money management CHAPTER 23

  3. Lesson 23.1 TYPES OF INSTITUTIONSAND SERVICES • Commercial banks • Full-service banks offer many financial conveniences and services. • Automated teller machines (ATMs) are electronic terminals in which customers can insert a plastic card to withdraw cash, make deposits, or transfer funds to another account. • Mutual savings banks • Savings and loan associations • Credit unions CHAPTER 23

  4. Lesson 23.1 ELECTRONIC BANKING • Electronic banking is a broad term used to describe various types of electronic fund transfers (EFTs). • Automated teller machines (ATMs) • Telephone banking systems • Computer banking systems • Direct deposits or withdrawals • Point-of-sale transfers CHAPTER 23

  5. Lesson 23.1 DEBIT CARD • A debit card is a plastic card used to immediately transfer funds for a purchase from a bank account to a seller. CHAPTER 23

  6. Lesson 23.2 CHECKING ACCOUNTS Objectives Describe types of checking accounts and how to open an account Illustrate how to write and endorse a check, maintain a check register, make a deposit, and reconcile a bank statement CHAPTER 23

  7. Lesson 23.2 UNDERSTANDINGCHECKING ACCOUNTS • Checks provide a safe and convenient way to pay bills. • Checks can be used as freely as cash. • Using checks makes it easier to keep good financial records. CHAPTER 23

  8. Lesson 23.2 TYPES OF CHECKING ACCOUNTS • Regular checking account • Special checking account • Negotiable order of withdrawal (NOW) account • Share draft account CHAPTER 23

  9. SAMPLE CHECK Lesson 23.2 CHAPTER 23

  10. Lesson 23.2 OPENING A CHECKING ACCOUNT • A signature card is a form that is completed when opening a checking account. CHAPTER 23

  11. Lesson 23.2 WRITING A CHECK • Date • Postdating is dating a check ahead of time. • Payee • The person or institution that you write the check to is the payee. • Numerical amount • Written amount • Purpose or account number • Signature CHAPTER 23

  12. A CORRECTLY WRITTEN CHECK Lesson 23.2 CHAPTER 23

  13. Lesson 23.2 KEEPING A CHECK REGISTER • A check register is used to record checks written, deposits made, and other transactions. CHAPTER 23

  14. ONE-LINE ENTRY TWO-LINE ENTRY SAMPLE CHECK REGISTER Lesson 23.2 CHAPTER 23

  15. Lesson 23.2 ENDORSING A CHECK • An endorsement is your signature, sometimes with a brief message, on the back/left side of a check. • Blank endorsement • Restrictive endorsement • Full endorsement CHAPTER 23

  16. FORMS OF ENDORSEMENT Lesson 23.2 Blank Endorsement Restrictive Endorsement Full Endorsement CHAPTER 23

  17. Lesson 23.2 RULES FOR ENDORSING CHECKS AND WITHDRAWING DEPOSITS CHAPTER 23

  18. Lesson 23.2 MAKING A DEPOSIT • The process of putting money into a checking account is known as making a deposit. • A deposit ticket is a preprinted form used to make a deposit into a checking account. CHAPTER 23

  19. SAMPLE DEPOSIT TICKET Lesson 23.2 CHAPTER 23

  20. Lesson 23.2 STATEMENT OF ACCOUNT • A statement of account is a summary of all transactions completed in a checking account for a given time period. • The summary includes: • Amount of each check and the date the bank received it • Deposits you made • Any service charges • Any interest earned • Beginning and ending balances CHAPTER 23

  21. Lesson 23.2 STATEMENT OF ACCOUNT CHAPTER 23

  22. Lesson 23.2 BALANCING A CHECKBOOK • Comparing the bank statement with your check register is known as balancing (or reconciling) a checkbook. • Balancing a checkbook ensures that both you and your bank have recorded all the activity on your account accurately. • Instructions on how to balance your account are usually printed on the back of the statement. CHAPTER 23

  23. Lesson 23.2 FORM FOR BALANCING A CHECKBOOK CHAPTER 23

  24. Lesson 23.3 CREDIT AND ITS USE Objectives Name and describe the two basic types of credit Calculate the cost of credit CHAPTER 23

  25. Lesson 23.3 CREDIT • Credit refers to the receipt of money, goods, or services in exchange for a promise to pay. CHAPTER 23

  26. Lesson 23.3 TYPES OF CREDIT • Loan credit • Sales credit CHAPTER 23

  27. Lesson 23.3 THE COST OF CREDIT • The finance charge is the total dollar amount you pay for using credit. • The annual percentage rate (APR) is the percentage cost of credit on a yearly basis. CHAPTER 23

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