Checking Accounts

Checking Accounts Chapter 9

Possible Activities • Checkbook Simulation • Balance Checkbook (file) • Online Check Writing • Online Deposit Slips • Use the information on page 208 (Solve Problems and Explore Issues) • Go to bank website. #7 on p.207 • Checkbook Unit (if need more practice)

Basics • Check: • Written order to bank to pay the amount stated to the person or business named on it. • Demand deposit: • Money may be withdrawn at any time.

Basics • Process: • You write a check. • The payee cashes your check. • The bank that cashed the check returns it to your bank. • The bank withdraws money from your account and sends it to the bank that cashed the check. • Your bank then stamps the back of your check, indicating that it has a check that has cleared your account. • Canceled Check: a check that has cleared your accounts. Can be used as proof of payment.

Advantages of Checking Account • Provides a convenient way to pay bills. • Safer than using cash, especially when making major purchases. • Built-in record keeping system that you can use to track expenses and create budgets. • Gives you access to other bank services, such as loans, online banking, and 24-hour access to your money through ATMs.

Opening a Checking Account • You must fill out and sign a signature authorization form. • Provides an official signature that the bank can compare to the signature you write on the check.

Parts of Check • Check Number • ABA Number • Name and Address of Maker • Date • Payee • Numeric Amount • Written Amount • Signature • Account and Routing Numbers • Memo

Writing Checks • Always use pen (blue or black). • Write legibly. • Sign name the same as on signature card. • Avoid mistakes. (VOID) • Make sure you have adequate funds. • Go to online checking link.

Why Paying Bills Online? • Safer than sending checks in mail. • Faster than mailing. • Convenient • Saves money for postage and costs of checks.

Paying Bills Online Choice #1 Choice #2 • Can register at website of business to which you will be making payments. • You can authorize payments. • Can bills from your own account. • Register at your bank’s website. • Some banks charged monthly fee.

Making Deposits (use Internet) • Date of transaction. • Cash Section: write amount of $ you are depositing • Checks Section: write amount of check along with ABA number. • Total the currency, coin, and check amounts. Write figure on “subtotal” line. • If you wish to receive some cash, complete “Less Cash Received” line • Complete “Net Deposit” • If you receive some cash, “Sign Here for Less Cash Received” • The teller will give you copy of deposit slip or receipt. • Go to online deposit slip.

Checkbook Register • Definition: booklet used to record checking account transactions. • Practice: use handout • Complete ‘Balance Checkbook’

Reconciling Your Account • Bank Reconciliation: the process of matching your checkbook register with the bank statement • Use sample to explain.

Endorsing Checks • Blank Endorsement • Only the signature of the payee • Special Endorsement • Transfers the right to cash the check to someone else. • “Pay to the order of…” • Restrictive Endorsement • Limits to the use of the check. • “For deposit only…”

Types of Checking Accounts • Joint Accounts • Opened by 2 or more people. • Any person who signs the account has the right to the amount deposits. • Interest Bearing Accounts • Can earn interest. • Must maintain a minimum balance

Banking Services • Money Orders • Debit Cards • Bank Credit Cards • Overdraft Protection • ATMs • Online and Telephone Banking • Stop Payment Orders • Safety Deposit Boxes • Loans and Trusts • Notary Public • Financial Services

Banking Fees • Monthly Service Fees • Overdraft Fees • NSF check charges • ATM fees • Safe deposit box fees

Checking Accounts