Bank Accounts

1. Bank Accounts

2. Deposit Account: Deposit Account: An account at a banking institution which allows the account holder to deposit money into or withdraw money from the account.

3. 4 Main Types of Deposit Accounts:

4. 4 Main Types of Deposit Accounts: • Checking • Savings • Money Market • Time Deposit (Certificate of Deposit)

5. Checking Accounts • Allow quick access to funds • Account holder can write checks authorizing the bank to transfer funds to another individual • May be linked to a debit card • Typically no limits on number of transactions • At risk of being “overdrawn” • To Overdraw: To have checks cashed against an account in excess of the available funds • Some pay interest • Most have a minimum balance • Minimum balance: An amount of money that must remain in an account at all times to avoid a fee

6. Checking Fees: • May have account fees • Overdraft fees: Charge for overdrawing the account • Minimum balance fee: Charge for having the balance of the account fall below the minimum balance • Check ordering fees: Charge for obtaining additional checks • Debit Transaction Fee: Charge for using the debit card to make a purchase

7. Checks: • Banks MUST take checks for the written amount (not the numeric amount) • Post-dated checks are illegal • Post-dated: To write a date later than the current date

8. Savings Account • Passbook or Statement • Passbook: The account holder has a booklet showing all transactions • Statement: The account holder receives a statement each month showing all transactions • Pays interest • Usually limits the number of withdraws permitted each month • Typically have no minimum balance

9. Savings Account Fees: • Fee for Exceeding the limit of withdraws during a month • Some banks are considering charging a maintenance fee just to have the account

10. Money Market Account: • Mix between a Checking and Savings Account • Tiered interest • The more money in the account, the higher the interest rate • Can write checks • Limited on the number of checks per month that you can write • High minimum balances • Typically $1,000 or more • Typically have maintenance fees

11. Time Deposit (Certificate of Deposit): • Highest rate of interest • Account holder agrees to keep the account balance for a set period of time • Can LOSE MONEY for early withdraw

12. Holds: • Hold:

13. Holds: • Hold: An amount of money that is not available to be drawn against

14. Holds: • Hold: An amount of money that is not available to be drawn against • Funds deposited into a bank account may not be available immediately • Checks deposited into a bank account almost always have a hold for the full amount of the check