Checking Literacy Consumer Education 2015-2016

1. Why someone might want to open a checking account Safety: You may not be safe walking around with a lot of cash. A stolen ATM/debit card or stolen checks can be replaced, while stolen cash is simply gone.

1. Why someone might want to open a checking account Convenience: If you use an ATM card or checks you do not always have to have cash to make a purchase. It’s a bad idea to send cash through the mail to pay bills. You can usually access your checking account easily by using your check/debit card.

1. Why someone might want to open a checking account Easier Budgeting: A checking account can help you budget your money. When you use your check register to record debit card transactions or checks you have written, you are automatically keeping track of where your money is going, making it easier to track your spending habits.

1. Why someone might want to open a checking account Proof of Payment: Checks are written proof that you made a payment to someone. Each time you write a check that “clears” (the money is taken from your account), there is a record of it. If anyone ever challenges that you did not make a payment, you can always use your check transaction record to prove it. (A digital copy of the endorsed check is available through your bank)

1. Why someone might want to open a checking account Additionally: You might be someone who knows that cash in your pocket is too easily spent. Having a checkbook instead of cash might help you to be less impulsive in your purchases, saving you money in the long-run.

2. Things to consider when opening a checking account. Location: branch offices hours of operation availability of ATMs (fee free) online access

2. Things to consider when opening a checking account. Fees: monthly fees per check fees printing of checks balance inquiry fees ATM fees

2. Things to consider when opening a checking account. Other charges: overdraft charge stop-payment fees certified check fees P.S. did you know that “overdraft protection” that banks offer is a loan with pretty high interest? Keep your account balanced and you will never have to worry about it!

2. Things to consider when opening a checking account. Interest: rate earned minimum deposit compounding method fee charged for falling below necessary balance Interest earned is free money  Interest paid is money you give away 

2. Things to consider when opening a checking account. Restrictions: minimum balance deposit insurance holding period for deposited checks (Check21=usually means same day or early next day)

3. Research Activity Example: Let’s say you are attending Michigan Tech in Houghton, MI (way up in the UP) so you decide Superior National Bank and Trust is the closest to your dorm:

3. Research Activity continued Example: Let’s say you are attending Michigan Tech in Houghton, MI (way up in the UP) so you decide Superior National Bank and Trust is the closest to your dorm:

Writing a check is like writing a binding contract. 4. Now that you have your checks, what do you need to know? There are a few precautions that students need to be made aware of: Writing a check is like writing a binding contract. When you sign the bottom of a check, you are agreeing to pay the specified amount on demand. When you “bounce” a check, you usually must pay the person or business a fee on top of what you already owe them (most businesses charge a “Returned Check Fee” of $25). Most banks charge an additional fee for having to cover your expense (most banks charge around a $35 non-sufficient funds fee) Writing bad checks is also considered check fraud and can be a jailable offence.

Always write checks in ink (non-erasable) and fill up all spaces 4. Now that you have your checks, what do you need to know? There are a few precautions that students need to be made aware of: Always write checks in ink (non-erasable) and fill up all spaces

4. Now that you have your checks, what do you need to know 4. Now that you have your checks, what do you need to know? There are a few precautions that students need to be made aware of: Once you endorse a check (sign the back of it), anyone can cash it. Never endorse checks you plan on depositing later. As an added measure, some people write “For Deposit Only” and the account number below their endorsement.

4. Now that you have your checks, what do you need to know 4. Now that you have your checks, what do you need to know? There are a few precautions that students need to be made aware of: Keep unused checks in a place where others will not have easy access to them.

4. Now that you have your checks, what do you need to know 4. Now that you have your checks, what do you need to know? There are a few precautions that students need to be made aware of: Check your statement regularly to make sure there was no unauthorized activity. Make sure everything on your statement matches everything in your register Most banks offer online statements that are updated almost daily.

Making a Deposit

Endorsing a check Do not sign a check until you are ready to deposit (Unless you use a restrictive endorsement)

5. Fill out the deposit slip

5. Fill out the deposit slip 200 00 187 58 12 42 50 - 450 March 28, 2016

5. Transaction Register Transaction Type/ Check # Description Date Debits (-) Credits + Balance  

5. Transaction Register Transaction Type/ Check # Description Date Debits (-) Credits + Balance  Deposit  Beginning Balance 3/28/16   450  00  450 00

Writing a Check

6. Buy and Sell You have 4 items you can sell You must purchase 2 items Write 2 checks for items you have purchased Enter the debits in your register You must sell 2 items Receive 2 checks for items you sell Enter the credits in your register

6. Transaction Register example Transaction Type/ Check # Description Date Debits (-) Credits + Balance  Deposit Beginning Balance 3/28/16   450  00  450 00  #127 Bought MSU Socks 10 52 439  48 Deposit Sold magazine 15 99 455 47

7. Debit Card Debit cards are USUALLY declined if you don’t have enough to pay the amount. Be careful to put the amount in your Transaction Register— Debit card purchases and ATM withdrawals are easy to forget about Run as “Credit” and not “Debit” for security

7. Debit Card Subtract the 2 debit card transactions from your Transaction Register Example (your balance will be different) Transaction Type/ Check # Description Date Debits (-) Credits + Balance  Deposit Beginning Balance 3/28/16   450  00  450 00  #127 Bought MSU Socks 10 52 439  48 Deposit Sold magazine 15 99 455 47  Debit Target 28   11 427  36   ATM Cash  20 407 

8. Keeping a Running Balance Continue using your register with your ending balance from step 7. Everyone will have slightly different balances #2 says check #107 – cross that off and use whatever check number you are on.