Checking & Savings Accounts Lesson 2: Checking Account Basics – Part 2 FINANCIAL AWARENESS Checking & Savings Accounts Lesson 2: Checking Account Basics – Part 2 Instructor PowerPoint Copyright © 2009, Thinking Media, a division of SAI Interactive, Inc. All rights reserved. The Career Ready 101 logo is a registered trademark and Career Ready 101 is a trademark of SAI Interactive, Inc.

Dos and Don’ts of Check Writing Here are some tips to follow when writing checks: Always write your check in ink. NEVER write in pencil because someone can change the dollar amount. Write clearly and legibly especially when writing numbers. 2

Dos and Don’ts of Check Writing Always start at the beginning of the line (far left) when spelling out the amount and draw a line to the end. This will help ensure that no one tries to alter the amount of the check. Do not leave any items blank on your check. All items are required except for the For, Memo or Note area. 3

Dos and Don’ts of Check Writing After writing a check, double-check it to ensure everything is correct. Make sure the $ amount (numbers) match the written amount (written in words). Remember to sign the check. A check does not become legal tender until it has been properly signed. 4

Dos and Don’ts of Check Writing If something is incorrect, do not try to alter the check. Instead “void” the check, tear it up and write a new one. Most banks will not cash a check that has been changed or altered even if it has been initialed. 5

Dos and Don’ts of Check Writing Remember to keep a record of the voided check in your transaction register. Keep your checks in a safe place so they are not lost or stolen. 6

Exercise #2: Checking Account Basics Distribute Exercise #2: Checking Account Basics. You will use this handout throughout Checking Account Basics – Part 2 to mark your responses to questions. 7

Exercise #2: Checking Account Basics Question 1 Directions: Select the best answer to this question. Question 1 When writing a check, which of the following should you do? Leave the Payee/Pay to the Order of field blank. Post-date the check to delay having the money deducted from your account Write the check in pencil because you did not have a pen Always double-check the information on the check before submitting it for payment 8

Exercise #2: Checking Account Basics Question 1 – Answer Directions: Select the best answer to this question. Question 1 When writing a check, which of the following should you do? Leave the Payee/Pay to the Order of field blank. Post-date the check to delay having the money deducted from your account Write the check in pencil because you did not have a pen Always double-check the information on the check before submitting it for payment Answer You should always double-check the information on a check to ensure the information is complete and correct. 9

ATM Card When you open a checking account, most banks issue an Automated Teller Machine (ATM) card. At most ATM locations, you can perform the same transactions electronically instead of physically going to the bank. 10

ATM Card You can use your ATM card to: Withdraw cash Make deposits Transfer money Check your balance Make loan payments An ATM card makes it convenient for you to access your accounts 24 hours a day, 7 days a week (24/7). 11

Debit Card With today’s advanced technology, most people use a debit card to make purchases instead of writing a check. It is quicker and easier than writing a check. Most debit card transactions are deducted from your checking account immediately. 12

Debit Card Businesses like debit cards better because they do not have to deposit checks and wait for them to clear before they get their money or worse, have to process insufficient fund checks. A debit card provides the combined benefits of an ATM card and a check. You can use a debit card to access your account information and withdraw cash utilizing an ATM machine or to pay for a purchase. 13

Debit Card A debit card is not a credit card. It will not provide you with the ability to purchase something immediately and pay later. Most debit card transactions are automatically deducted from your checking account; however, sometimes it can take a couple of days for a transaction to be posted. Always remember to record all ATM and debit card transactions in your transaction register. 14

ATM and Debit Card You may be charged a fee for ATM and debit card use. Before opening an account ask the bank what type of fees they charge. If you use an ATM owned by another bank, most likely you will be automatically charged a service fee and will sometimes incur a fee by your bank for using another bank’s ATM. 15

ATM and Debit Card When you open a checking account and receive an ATM and/or debit card, you will need to create a unique Personal Identification Number (PIN) to use when accessing your account. When creating your PIN, you want it to be a unique number combination that you will be able to remember. 16

ATM and Debit Card Do not use birthdates, anniversaries, phone numbers and social security numbers. Do not write your PIN number on your ATM or debit card. Do not carry your PIN number with you. Write your PIN number on a piece of paper and store it in a secure location in your home. Never keep your PIN with your ATM or debit card. 17

ATM and Debit Card If someone steals your ATM and/or debit card, they more than likely will attempt to use it. If they do not have your PIN, they will be unsuccessful. After three PIN attempts, most ATM machines will automatically confiscate the card. You will have to go to the bank to retrieve your card and create a new PIN. 18

Exercise #2: Checking Account Basics Question 2 What is an ATM card? Enables you to withdraw cash from your account Enables you to check your account balance Enables you to make a deposit All of the above 19

Exercise #2: Checking Account Basics Question 2 – Answer What is an ATM card? Enables you to withdraw cash from your account Enables you to check your account balance Enables you to make a deposit All of the above Answer Most bank ATM locations allow you to do all of the above. 20

Lost or Stolen ATM or Debit Card If your ATM or debit card is lost or stolen, report it immediately to your bank. Most banks have a 24/7 telephone or online access to report lost or stolen cards. According to the Electronic Fund Transfer Act, if you report the card missing to your bank before it is used, you will not be held responsible for unauthorized transactions. 21

Lost or Stolen ATM or Debit Card If it is used before you report it lost or stolen, your liability limit usually depends on when you reported the loss. Here are the guidelines: $50 if reported within two business days $500 if you do not report the loss within two business days Unlimited liability if you do not report unauthorized transactions within 60 days after receiving your checking account statement showing the unauthorized use. 22

Tips for Preventing Theft Here are some tips to protect against account theft: Never give your account number over the phone unless you know you're dealing with a reputable company and no one else can overhear the conversation. Draw a line through blank spaces on the debit slip above the total so the amount cannot be changed (i.e., tip line, etc.). 23

Tips for Preventing Theft Never sign a blank debit slip. Make sure the total is correct before you sign. Tear up carbons and save your receipts to check against your monthly statement. Most businesses use automated debit processing and no longer utilize carbon charge slips. 24

Tips for Preventing Theft Never carry your PIN or write it on your ATM or debit card. Never keep your PIN with your ATM or debit card information. Cut up old debit and credit cards through the account number before throwing them away. 25

Tips for Preventing Theft Review your monthly checking account statement as soon as you receive it. Compare your receipts to the statement. Immediately report any mistakes. 26

Exercise #2: Checking Account Basics Question 3 To prevent theft, which of the following should you do? Never carry your PIN or write it on your ATM or debit card. Never sign a blank credit or debit slip. Never give out your account number or PIN over the phone All of the above 27

Exercise #2: Checking Account Basics Question 3 – Answer To prevent theft, which of the following should you do? Never carry your PIN or write it on your ATM or debit card. Never sign a blank credit or debit slip. Never give out your account number or PIN over the phone All of the above Answer To prevent theft, you should do all of the above. 28

Checking Account Basics Summary By learning how to properly manage a checking account, you can establish good financial management skills such as paying bills on time and ensuring you have enough money in your account before making a purchase decision. 29

Checking Account Basics Summary The most important aspect of daily checking account management is to ensure there is enough money in your account to cover your transactions. If you “bounce” a check, even if you have overdraft protection, it will cost you even more money. 30

Checking Account Basics Summary You will still need to cover the amount of the “bounced” check, plus insufficient funds fee by your bank and the merchant you wrote the check to will charge you a returned check fee. For example, a $20 check could end up costing you $70+ dollars! You may even be prosecuted for writing bad checks that can result in fines and possible jail time. 31

Topic Quiz: Checking Account Basics Directions: Circle the best answer to the question. Question 1 Which of the following can you usually do at an ATM location? A. Withdraw cash B. Make deposits C. Transfer money D. All of the above 32

A. Insures deposits in banks B. Provides 24/7 access to your account Question 2 What is FDIC? A. Insures deposits in banks B. Provides 24/7 access to your account C. Deposits money in your account D. Withdraws money from your account 33

Which of the following is NOT a part of a check? Question 3 Which of the following is NOT a part of a check? A. Check amount B. Signature line C. Deposit amount D. Payee 34

When writing a check, which of the following should you NOT do? Question 4 When writing a check, which of the following should you NOT do? Double-check information to ensure it is correct Write check in pencil so you can correct mistakes Write clearly and legibly when writing numbers Start at the beginning of the line when writing the amount 35

Review this check, then circle the best answer to this question. Directions: Review this check, then circle the best answer to this question. Question 5 What is wrong with this check? The date the check was written is missing. The $ number amount does not match the written word amount. The signature is missing. Nothing, the check is correct. 36

Topic Quiz: Checking Account Basics Instructor Guide Directions: Circle the best answer to the question. Question 1 Which of the following can you usually do at an ATM location? Withdraw cash Make deposits Transfer money All of the above Answer Most bank ATM locations allow you to do all of the above. 37

A. Insures deposits in banks B. Provides 24/7 access to your account Question 2 What is FDIC? A. Insures deposits in banks B. Provides 24/7 access to your account C. Deposits money in your account D. Withdraws money from your account Answer The FDIC preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks. 38

Which of the following is NOT a part of a check? Question 3 Which of the following is NOT a part of a check? A. Check amount B. Signature line C. Deposit amount D. Payee Answer A Deposit amount is included on a Deposit Slip not a check. 39

When writing a check, which of the following should you NOT do? Question 4 When writing a check, which of the following should you NOT do? Double-check information to ensure it is correct Write check in pencil so you can correct mistakes Write clearly and legibly when writing numbers Start at the beginning of the line when writing the amount Answer You should never write a check in pencil because anyone can erase the information and change the amount of the check. 40

Review this check, then circle the best answer to this question. Directions: Review this check, then circle the best answer to this question. Question 5 What is wrong with this check? The date the check was written is missing. The $ number amount does not match the written word amount. The signature is missing. Nothing, the check is correct. Answer Always make sure the $ number amount matches the written word amount before you sign the check. 41

Lesson 2: Checking Account Basics – Part 2 END OF LESSON