Checking Accounts

What is a checking account? A bank account that allows easy access to the funds. You can use your checking account to pay bills. With a checking account you can access your money by writing checks, setting up automatic transfer, or use your debit card.

Debits and Credits A debit is a withdrawal. A credit is a deposit.

Choosing a Bank Considerations Ask yourself: What do I want to do with my bank account? How do I prefer to do my banking? What’s it worth to me? What are other opinions about banks? What bank is the best fit for me?

Basic Types of Bank Accounts Checking Account Savings Account Money Market Account Certificate of Deposit Overdraft Protection Interest Checking Accounts

Checking Account An account that allows you to pay your bills and have easy access to your money. When you open your checking account you should get a debit card that can be used at the ATM and stores. Checking accounts can be used to make online purchases.

Savings Account An account that allows you to save your money. An advantage of having a savings account is that it has a lower minimum balance requirement. A disadvantage is that the interest rate is lower than other accounts.

Money Market Account This is a type of savings account. Offers a higher interest rate. You can write checks off of this account. It has a higher account minimum balance. If you cannot maintain the minimum balance then you will be charged a fee.

Certificate of Deposit This account offers a higher interest rate, but you lock the money in for a length of the CD. The interest rate may stay low when interest rates actually rise. You cannot withdraw money without taking a penalty until the period of the CD is complete.

Overdraft Protection Also known as a cash reserve account. This account will protect you from overdrawing your account. One form of overdraft protection is attaching a line of credit to your account. Another option is to have your savings account connected as your overdraft account, and money will automatically be transferred over.

Interest Checking Accounts This type of account allows you to earn interest on easily accessible cash You can write checks, use a debit card, make transfers, and earn a competitive return on your cash. Pitfalls to watch for are limited number of transfers in the account per month, minimum balance requirements, bounced check fees. Types of interest checking accounts: 1.Plain account –pays interest and offers checking features. 2.Reward account-have more restrictions and are harder to qualify for but they pay more interest.

Opening a Checking Account Considerations Pay attention to: Minimum balance requirements Number of checks and debit transactions that are allowed each month Number of bill pay transactions Information on overdraft protection that is offered Type of services the bank offers and fees that are associated

Free Checking Offer Banks usually require that you make a small deposit in order to open the account. There is usually no annual or low balance fee. Some banks offer free checks for life with free checking. To make sure that you get a good deal on a free checking account, look for the following: -no low balance fees -free ATM and/or debit card -no charge for ACH and direct deposit transactions -free online access to your account -unlimited monthly check writing -no minimum check writing amount

Free Checking For the best in free checking, see if you can find free checking that offers: -at least one free book of checks -free online bill pay -overdraft protection plans -no charge to use ATMs outside of banking family -reimbursement of ATM fees charged to you by another ATM

Check Register A check register is your own personal record of your checking account. Check registers can help you: -Identify mistakes -Catch identify theft -Avoid bounced checks

Handling Discrepancies You should bring with you to the bank: 1.Your bank account statement 2.Receipts of deposits and other transactions 3.A copy of your current checkbook register

Overdrawn Accounts Most banks charge at least $25.00 Stores also charge you a returned check fee

What should you do if you overdraw your bank account? 1.Stop using your checking account until you have sorted everything out. 2.Balance your account with what the bank has charged you. 3.Bring your account back into the positive, 4.Deposit money into your account until you are in the positive again. Most banks set a limit as to how long they will allow a negative account to stay open. 5.Once you have cleared everything up, you can use the same account, but keep a running register to prevent it from happening again.

Online Banking Allows you to manage your money more easily, and earn a competitive return. Typically pays a higher rate of interest. A number of online bank accounts offer free checking and some even pay a high yield on your checking account balance.

Benefits to Online Banking Experience fewer errors and have an easier time tracking things. Most banks allow you to download account information so that you can manage your finances with your computer.

Debit Cards Debit cards are easy to use and carry. Fees are nominal and it’s easy to cancel a debit card if it’s lost or stolen while your traveling. A debit card differs from a credit card in that a debit card is tied directly to your checking account and the amount of money you can spend with it is limited to the amount of money you have in the bank.

Debit Cards When you use your debit card, the transaction debits (wtihdraws) the amount of the transaction from your checking account, usually on the same day.

Debit Cards It takes a few days or two weeks to get a debit card after you order one. When the card arrives, sign the back; have a photo id with your signature handy when you use the card-merchants may want to compare your face and your signatures to protect themselves from fraud.

PIN Personal Identification Number A debit card comes with a PIN which can be changed to number you can easily remember. **MEMORIZE IT! Do not choose an obvious number like your birthday. If your card is stolen or lost, call your bank asap!