Chapter 4 Checking Accounts

Checking Account A checking account is a bank account that allows you easy access to your money Use this account to pay bills/make most financial transactions Access money by… Writing a check Setting up an automatic transfer (online) Using your debit card

Opening a Checking Account You can open a checking account online or you can go to the bank and open it in person Monthly Maintenance Fee Minimum Opening Balance www.PNC.com

4.1 – Deposits/Withdrawals A deposit is an amount of money that you put into a bank account A withdrawal is an amount of money that you take out of a bank account An Automated Teller Machine (ATM) allows you to deposit or withdraw money electronically using a card Requires a Personal Identification Number (PIN)

Using an ATM Deposits can be made at most ATMs, but withdrawals can be made at all ATMs http://www.gcflearnfree.org/edlall/atm

Deposit Slip – Example 1 Margaret Miller makes a deposit at an ATM. She has a check for $235.42 and a check for $55.47. She would like to receive $40 in cash and deposit the rest of the money in her checking account. What is her total deposit?

Margaret C. Miller 2 3 5 4 2 March 11, 2012 5 5 4 7 2 9 0 8 9 4 0 0 0 2 5 0 8 9

Example 2 Manuel Romero is making a deposit in his checking account. He has checks for $435.20, $271.19, and $327.96. He has cash consisting of 15 one-dollar bills, 7 five-dollar bills, 3 ten-dollar bills, 24 quarters, 5 dimes, 15 nickels, and 14 pennies. He would like to keep $75 in cash. What is his total deposit?

Example 2 (cont.) First, figure out the currency deposit $15 + (7 x $5) + (3 x $10) = Next, figure out the coins deposit (24 x $0.25) + (5 x $0.10) + (15 x $0.05) + $0.14 = To figure out the total deposit, remember to subtract the $75 that Manuel wants to keep for cash.

Mobile Deposit Most banks now offer mobile check deposit An application that allows you to take pictures of checks with your smartphone or tablet and deposit the funds into your bank accounts. If your bank offers mobile check deposit, you can avoid visiting a branch to deposit checks.

PNC – Virtual Wallet

Mobile Check Deposit - PNC

4.2 – Writing Checks First you need to open a checking account Allows the holder to write checks against money that has been deposited into it A check directs a bank to deduct money from your checking account to make a payment Account must contain as much money as the amount of the check you are writing Can be penalized with overdraft fees

Writing Checks When writing checks, you need to be able to write dollar amounts in word form, with the decimal portion expressed as a fraction. Example: $65.38 would be written as…. Sixty-five and dollars NOTE: and is only used to replace the decimal point

Writing Checks – Example 1 Bumper Allen is buying a leather jacket at H&M. He buys it on March 23. The cost of the jacket is $45.78. Bumper is paying by check. How should he write the check? 1. Write the date. (All writing should be in pen) 2. Write the name of the person or organization to whom payment will be made 3. Write the amount of the check as a numeral 4. Write the amount of the check in words with cents expressed as a fraction 5. Make a notation on the check to indicate its purpose 6. Sign the check

Writing Checks Questions? Pg. 167, # 3-16. Pg. 171, #15-24 DO WORK

Section 4.3 – Check Registers A check register is used to keep a record of your deposits, electronics transfers (or automatic transfers, AT), and the checks you have written The balance is the amount of money in your account

Check Registers When you make a deposit, add When you write a check or electronically transfer funds out of your account, subtract The purpose of a check register is to make sure you don’t spend more than you have

Check Register Number or code- If writing a check, put the check number here. Or use a transaction code: DC for Debit Card ATM for a cash withdrawal, D for Deposit T for a transfer to your savings account, etc. BP for a online bill payment Date- always record the date of anything you do

Check Register Transaction Description- Make a quick note about the transaction (paycheck for… pizza… Rite Aid) Payment/Debit- record the amounts of money going out of your account Deposit/Credit- record the amounts of money coming into your account Balance- How much money you currently have

Example 1 The previous balance in your check register is $345.98. You make a deposit of $75.00. You write a check for $45.00. What is your new balance?

Online Bank Information You can view your bank information online (transactions, balance, etc.) but BEWARE OF OUTSTANDING TRANSACTIONS You may have less money than it appears!

Practice problems Pg. 172, #1-12 THERE WILL BE HOMEWORK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Section 4.4 – Bank Statements A bank statement lists all of your checks that the bank has cleared, including any automatic transfers, ATM transactions, and deposits since your last statement Once a month Bank might tack on a service charge to your statement, which is a fee charged for services rendered

Bank Statements Present Balance = Previous Balance + Deposits – Withdrawals – Service Charges + Interest

Example of a Bank Statement

Example 1 – Bank Statements Your bank statement shows a previous balance of $944.50. You make deposits of $755.50 and $210.40, and write checks for $355.50 and $125.50. You have a $3.00 service charge. What is your present balance? $944.50 + $755.50 + $210.40 - $355.50 - $125.50 - $3.00 = $1,426.40 present balance

Example 2 – Bank Statements

Section 4.5 – Reconciling the Bank Statement When you receive your bank statement, check with your check register to make sure they agree. We reconcile the statement Could find outstanding deposits or checks that didn’t post or didn’t clear

Reconciling the Bank Statement When comparing the two, remember…. Adjusted Balance = Statement - Outstanding Checks/ + Outstanding Balance Payments or Debits Deposits

Example 1 Your statement balance is $598.67. You have an outstanding check for $125.44 and an outstanding debit of $235.42 that didn’t post yet. You also have an outstanding deposit of $231.98. What is your adjusted balance? $598.67 – ($125.44 + $235.42) + $231.98 $598.67 – $360.86 + $231.98 = $469.79 adjusted balance

Reconciliation Statement Remember, an outstanding check or deposit is one that hasn’t been processed at the bank in time to appear on your bank statement You can use the reconciliation form on the back of your bank statement to reconcile your account

Reconciling the Bank Statement Pg. 179, #1-8 all Make sure you ask questions if you are confused on ANYTHING. Don’t take this material lightly.

Online Banking Online banking, or internet banking, allows you to bank from anywhere All you need is a connection to the internet Access you account(s) round-the-clock, any day

Online Banking Once logged into your account, you can… Transfer funds from checking to savings or savings to checking Make loan payments from checking to loan Make payments to third parties Get info about account balances, previous deposits, previous withdrawals, and loan balances

PNC – Online Banking

Online Banking – Lake Michigan Credit Union

Mobile Banking