Ch. 5.4 Deposit Account Documents

When an account is opened, customers receive documentation outlining the rights and responsibilities associated with the account.

State and federal governments require banks to provide this documentation to customers. These documents protect both the consumer and the bank from misunderstanding and loss

The Federal Reserve, along with state and sometimes local governments, performs reviews to ensure that deposit account documents are specific, complete, clear, and used appropriately.

Documents Included Account rules Deposit rate schedules Free schedules Check hold policies Disclosure statements Opting out options  These documents collectively are sometimes called governing documents.

Account Rules Explain characteristics of each type of account They include definitions, requirements, restrictions, and other information associated with each account.

Deposit Rate Schedules List interest rates in effect at the time for various types of accounts

Fee Schedules Shows all charges that apply to each specific type of deposit account

Check Hold Policies Explains when deposited funds will be available for use by the consumer. Deposited funds are credited provisionally until full and final payment is received. In most cases, funds are available for use immediately but the bank will charge back to the account any amount that is uncollectible

Disclosure Statements Provide full information about bank policies such as electronic funds transfer policies, lending policies, interest crediting, and compliance with banking regulations. Required by law

Opting Out Options Allow you to notify your bank that you do not authorize the bank to share your personal financial information, like average account balance, with any other businesses.

Account Rules

Reference to Governing Documents The bank notes that account holders hold have to abide by rules set forth on Government Documents. The bank states that it may change rules but it must provide updated documents to the account holders.

Signature Policies Banks keep a card on file with the signature of everyone in an account. Signature policies spell out who can do what. The signature policies exist when the account is open and in the event of inconsistencies, disputes or deaths.

Opening and Closing Accounts These policies may include a deposit to open an account. Needs the presence of the person opening the account and valid identification. Bank has the right to not open an account for someone. The bank also reserves the right to close an account.

Resolution Form A resolution form grants authority for specified individuals to manage account transactions on behalf of the business. A resolution form might be needed from the company when a LLC(limited liability company), corporation, or partnership is started.

Deposit Collection This account rule explains the effects of uncollected deposits on accounts. The bank notes that it is not responsible for collection deposits.

Overdraft Policies An overdraft occurs when your withdrawals are greater than the money you have in the bank. If the account holder has more then one account in the bank, the bank may transfer funds to the other accounts to cover the draft. Fees are charged for over drafting your account.

Minimum Balance/Service Charges A bank in some cases make you have a minimum balance to have an account with them to avoid over drafting. The bank will tell you the exact fee for the service charges when you fail to keep a minimum balance in the account you have.

Withdrawal Policies The requirements for withdrawals very for accounts. They include - maturity dates & penalties for early withdrawals of time deposits - making withdrawals in person - id needed when withdrawing

Check Policies They relate to the accurate dating of checks & their timely deposits Stale check is dates six months or more before it is presented for payment or deposit Post-dated check is dated later than when it was written.

Account Statement Policies They deal with the bank statement They state what is & what is not included with each statement

Other Policies Account rules usually include assorted bank policies such as: - stopping payment of a check - handling inactive or dormant accounts - reimbursement of expense incurred by the bank on the account holder’s behalf

Waivers Accounts may contain notices about waivers such as customer’s agreement to waive protest of dishonored items & the banks willingness to waive those fees

Book Work Pgs #1-12 #15 #18 #23 #28 After you finish your book work, finish your poster.