Checking Accounts & Banking Services Money Management Checking Accounts & Banking Services By: Talia Spain

Checking Accounts Checking account – check – demand deposit Cleared – canceled check – substitute check Convenient way to pay bills Check is often safer than cash Built-in record system to track expenses Bank services – loans, online banking, and 24-hour ATM’s Electronic check conversion – overdraft – NSF – floating a check

Opening A Checking Account Signature Authorization Form – code word

Parts of A Check Always use pen Write legibly Check Number Name & Address Date ABA Number Payee Numeric Amount Written Amount Memo Account & Routing Number Signature Always use pen Write legibly Sign your name as it appears preprinted on the signature card Avoid mistakes – VOID if you do Be certain you have correct funds to cover each check you write

Paying Bills Online Safer, convenient and, cheaper Two forms of payment Routing number and account number – authorize payments each month or allow automatic payments Use online banking – PIN Some banks have limits or fees.

Making Deposits & Endorsement Deposit slip Date Amount of currency and coins If checks – write amount of each check Total – “Subtotal” line Receive cash – “Less Cash Received” line If cash received – “Net Deposit” line “Sign here for less cash in Teller’s presence” Received a copy Bank endorsement – misspelled Special endorsement Restrictive endorsement – cannot be found if lost

Using A Checkbook Register Checkbook register – booklet used to record checking account transactions Bank reconciliation – process of matching your checkbook register with the bank statement

Types Of Accounts Joint account – “survivorship account” Special account – low activity bank accounts, low fees Standard account – small or no monthly service fee Interest-bearing account – must stay at or above a minimum balance – “money market account” Share accounts – least expensive and most convenient

Match the terms with the definitions. Some terms may not be used. KEY TERMS REVIEW Match the terms with the definitions. Some terms may not be used. 1. A type of bank account from which funds may be withdrawn at any time 2. A booklet used to record checking account transactions 3. An endorsement that transfers the right to cash a check to someone else 4. Writing a check and hoping to cover it with a deposit before it clears 5. A check that has cleared your account 6. A written order to a bank to pay the amount stated to the person or business named on it 7. A check written for more money than your account contains 8. An endorsement that limits the use of a check 9. The process of matching your checkbook register with the bank statement CHECK YOUR UNDERSTANDING 10. What is an overdraft? Why is it important to avoid it? How can keeping a checkbook register up to date help? 11. Name five types of checking accounts available at many banks. a. bank reconciliation b. blank endorsement c. canceled check d. check e. checkbook register f. demand deposit g. floating a check h. overdraft i. restrictive endorsement j. special endorsement Section Assessment

Banking Services & Fees Full-service bank Savings Checking Credit cards Safe deposit boxes Loans ATM Online banking Telephone banking Certified checks Cashier’s check Money orders Debit cards FDIC (Federal Deposit Insurance Corporation)

Guaranteed-Payment Checks Certified check – bank fee $2.50 - $5.00 Cashier’s check – bank draft Traveler’s check – safer than other check types Money orders – do not have a checking account or do not want to use case Debit card – no credit extended Bank credit cards – full-service bank – annual fee & interest on payments

Overdraft Protection $100 - $1,000 – overdraft protection – “loan” with high interest rates or flat fee

Automated Teller Machines ATM – cash withdraws with a debit card – PIN

Online & Telephone Banking Computer or telephone access – transfer – pay bills – current balance – cleared checks – deposits entered – 24/7 access Electronic funds transfer – EFT – transfer from account to account – no delay Stop-payment orders – lost or stolen checks – fee – over 6 months old cannot be cashed

Safe Deposit Boxes Safe deposit box – store valuables – annual fees $50 - $150 or more – two keys – signature Loans and trusts – trustee – property management – “special agreement” Notary public – verifies a person’s identity Financial services – saving and selling bonds – brokerage service – minimum purchase of $1,000 is required

Match the terms with the definitions. KEY TERMS REVIEW Match the terms with the definitions. 1. Check forms in specific denominations that are used instead of cash while traveling 2. A request that the bank not honor a specific check 3. A plastic card that deducts money from a checking account almost immediately to pay for purchases 4. A personal check that the bank guarantees to be good 5. A computer-based system that moves money from one account to another without writing a check or using cash 6. A check written by a bank on its own funds 7. A place at your bank available to store valuable items or documents 8. A bank service that covers checks even if you have insufficient funds in your checking account CHECK YOUR UNDERSTANDING 9. List five banking services that are found at full-service banks. 10. List bank fees charged to customers and to noncustomers for services provided. a. cashier’s check b. certified check c. debit card d. electronic funds transfer e. overdraft protection f. safe deposit box g. stop-payment order h. traveler’s checks Section Assessment