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3. Read to Learn • Discuss the different types of checking accounts and how they work. • Discuss other services and offerings that banks provide checking account holders.

4. The Main Idea Checking accounts are tools that many people use to make payments. A checking account provides a way for consumers to manage their spending, make payments easily, and keep track of their funds. When they have a checking account, customers can access information online through the bank’s Web site.

5. Key Concepts • How Checking Accounts Work • Account Services and Other Offerings

6. Key Terms a written order directing a bank or other financial institution to pay money on demand to the person or company named on it check

7. Key Terms electronic transfers of payments directly from the payer’s account to the account of the person being paid directdeposit interestbearingaccount an account that earns interest on the balance for the depositor

8. Key Terms electronic transfers of payments directly from the payer’s account to the account of the person being paid directdeposit interestbearingaccount an account that earns interest on the balance for the depositor

9. Key Terms signaturecard a record of an account holder’s signature used to verify identity an account holder has written checks for more money than the balance in the account overdrawn

10. Key Terms overdraftprotection a line of credit for overdrawn checks stoppayment an order for a bank not to cash a particular check

11. Key Terms a bank card that immediately takes money from a checking account when it is used debitcard

12. How Checking Accounts Work A check is a common medium of exchange, or way to make payments for goods and services. check a written order directing a bank or other financial institution to pay money on demand to the person or company named on it

13. How Checking Accounts Work A customer opens a checking account by depositing money into a bank. The bank provides a checking account customer with paper checks.

14. Writing and Cashing a Check Figure 29.1

15. Writing and Cashing a Check Figure 29.1

16. How Checking Accounts Work The payee can either deposit the check or cash it. Once the money is paid, the check writer’s bank voids the check.

17. Types of Accounts Most banks offer several types of checking accounts. Shop around and compare financial institutions and the services they have to offer.

18. Regular Checking Account A regular checking account is designed for customers who write a few checks each month and do not keep a minimum amount of money in the account.

19. Regular Checking Account Direct deposit is one of the services available to customers with a regular checking account. direct deposit electronic transfers of payments directly from the payer’s account to the account of the person being paid

20. Interest-Bearing Accounts Most banks offer interest-bearing accounts. interest-bearing account an account that earns interest on the balance for the depositor

21. Joint Accounts A joint account allows people who are equally responsible for the account to write checks. Joint accounts are usually used by married couples or businesses with more than one owner.

22. Checking Account Security Once you decide what type of account you want, you must fill out a signature card at the financial institution. signature card a record of an account holder’s signature used to verify identity

23. Checking Account Security Your financial institution will ask you to provide your address, phone number, and the answer to a security question. The bank assigns you a checking account number and issues you a book of checks.

24. Account Services and Other Offerings An overdraft is the amount of money that is overdrawn from your checking account. overdrawn the account owner has written checks for more money than the balance in the account

25. Account Services and Other Offerings Banks may charge a fee for overdraft protection. overdraft protection a line of credit for overdrawn checks

26. Account Services and Other Offerings Banks usually charge a fee for a stop payment. stop payment an order for a bank not to cash a particular check

27. Account Services and Other Offerings A debit card is used like a credit card. debit card a bank card that immediately takes money from a checking account when it is used

28. You purchased a digital video camera using a check. You began to regret the purchase and called the store to inquire about returns. The manager told you that there are no returns on the item you bought unless it was defective. Decision Making Should you call your bank and stop payment on the check you used for the purchase? Explain your answer.

29. Answer Answers should address the issue of what it means to stop payment on a check. It is not an appropriate practice to use to resolve issues of this type.

30. Online Banking You can use an Internet browser on your computer to handle online banking. Personal finance software allows you to store information about your transactions for your records.

31. Graphic Organizer Check Account Balances Transfer Money What You Can Do with Online Banking Pay Bills Check Account Status 24 Hours a Day Save Time and Money Schedule Automatic Payment

32. E-Banking E-banking, or online banking, is becoming more popular worldwide, but the United States still relies heavily on paper checks. A recent survey revealed that of all the households that are on the Internet, only one in five also do their banking online.

33. How does a checking account work? A customer deposits money into a checking account and receives a book of checks to use for payments and purchases. The person can cash or deposit checks.

34. What are the three main types of checking accounts? regular checking accounts, interest-bearing accounts, and joint accounts

35. Discuss some additional services and offerings that banks provide checking account holders. Overdraft protection is a line of credit for overdrawn checks. Banks also will allow a stop payment, an order for a bank not to cash a particular check. Debit cards are also offered.

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