Money Management

1. Money Management Checking Accounts & Banking Services By: Talia Spain

2. Checking Accounts • Checking account – check – demand deposit • Cleared – canceled check – substitute check • Convenient way to pay bills • Check is often safer than cash • Built-in record system to track expenses • Bank services – loans, online banking, and 24-hour ATM’s • Electronic check conversion– overdraft – NSF – floating a check

3. Opening A Checking Account • Signature Authorization Form – code word

4. Parts of A Check Check Number Date Name & Address ABA Number Payee Numeric Amount Written Amount Memo Signature Account & Routing Number • Always use pen • Write legibly • Sign your name as it appears preprinted on the signature card • Avoid mistakes – VOID if you do • Be certain you have correct funds to cover each check you write

5. Paying Bills Online • Safer, convenient and, cheaper • Two forms of payment • Routing number and account number – authorize payments each month or allow automatic payments • Use online banking – PIN • Some banks have limits or fees.

6. Making Deposits & Endorsement • Deposit slip • Date • Amount of currency and coins • If checks – write amount of each check • Total – “Subtotal” line • Receive cash – “Less Cash Received” line • If cash received – “Net Deposit” line • “Sign here for less cash in Teller’s presence” • Received a copy • Bank endorsement – misspelled • Special endorsement • Restrictive endorsement – cannot be found if lost

7. Using A Checkbook Register • Checkbook register – booklet used to record checking account transactions • Bank reconciliation – process of matching your checkbook register with the bank statement

8. Types Of Accounts • Joint account – “survivorship account” • Special account – low activity bank accounts, low fees • Standard account – small or no monthly service fee • Interest-bearing account – must stay at or above a minimum balance – “money market account” • Share accounts – least expensive and most convenient

9. KEY TERMS REVIEW Match the terms with the definitions. Some terms may not be used. • 1. A type of bank account from which funds may be withdrawn at any time • 2. A booklet used to record checking account transactions • 3. An endorsement that transfers the right to cash a check to someone else • 4. Writing a check and hoping to cover it with a deposit before it clears • 5. A check that has cleared your account • 6. A written order to a bank to pay the amount stated to the person or business named on it • 7. A check written for more money than your account contains • 8. An endorsement that limits the use of a check • 9. The process of matching your checkbook register with the bank statement CHECK YOUR UNDERSTANDING • 10. What is an overdraft? Why is it important to avoid it? How can keeping a checkbook register up to date help? • 11. Name five types of checking accounts available at many banks. a. bank reconciliation b. blank endorsement c. canceled check d. check e. checkbook register f. demand deposit g. floating a check h. overdraft i. restrictive endorsement j. special endorsement Section Assessment

10. Banking Services & Fees • Full-service bank • Savings • Checking • Credit cards • Safe deposit boxes • Loans • ATM • Online banking • Telephone banking • Certified checks • Cashier’s check • Money orders • Debit cards • FDIC (Federal Deposit Insurance Corporation)

11. Guaranteed-Payment Checks • Certified check – bank fee $2.50 - $5.00 • Cashier’s check – bank draft • Traveler’s check – safer than other check types • Money orders – do not have a checking account or do not want to use case • Debit card – no credit extended • Bank credit cards – full-service bank – annual fee & interest on payments

12. Overdraft Protection • $100 - $1,000 – overdraft protection – “loan” with high interest rates or flat fee

13. Automated Teller Machines • ATM – cash withdraws with a debit card – PIN

14. Online & Telephone Banking • Computer or telephone access – transfer – pay bills – current balance – cleared checks – deposits entered – 24/7 access • Electronic funds transfer – EFT – transfer from account to account – no delay • Stop-payment orders – lost or stolen checks – fee – over 6 months old cannot be cashed

15. Safe Deposit Boxes • Safe deposit box – store valuables – annual fees $50 - $150 or more – two keys – signature • Loans and trusts – trustee – property management – “special agreement” • Notary public – verifies a person’s identity • Financial services – saving and selling bonds – brokerage service – minimum purchase of $1,000 is required

16. KEY TERMS REVIEW Match the terms with the definitions. • 1. Check forms in specific denominations that are used instead of cash while traveling • 2. A request that the bank not honor a specific check • 3. A plastic card that deducts money from a checking account almost immediately to pay for purchases • 4. A personal check that the bank guarantees to be good • 5. A computer-based system that moves money from one account to another without writing a check or using cash • 6. A check written by a bank on its own funds • 7. A place at your bank available to store valuable items or documents • 8. A bank service that covers checks even if you have insufficient funds in your checking account CHECK YOUR UNDERSTANDING • 9. List five banking services that are found at full-service banks. • 10. List bank fees charged to customers and to noncustomers for services provided. a. cashier’s check b. certified check c. debit card d. electronic funds transfer e. overdraft protection f. safe deposit box g. stop-payment order h. traveler’s checks Section Assessment