Checking and Banking 9.27.13

Unit Goals Write checks Maintain check registers Reconcile bank statements

Quick Facts… More than ___% of teens have a savings account ____% of teens 16-17 have a checking account. ____% of those 18-19 have one. Only ____% of teens 16-17 have a debit card. ____% of those 18-19 have one. ____% of teens 16-19 have their own credit card

Checking Account Checking Account: Account that allows depositors to write checks and make payments Check: Written order to a bank to pay the state amount to the person/ business (payee) named on it

Responsibilities Write checks carefully Keep accurate records of checks written and deposits made Verify accuracy of bank statement you receive each month Maintain sufficient funds in your account to cover all written checks

Advantages Convenient way to pay bills Writing check is safer than using cash 24 hour access to ATMs, Online banking

Sample Check Routing Account Check

A Check’s Process Payee cashes check Bank that cashed check returns it to your bank Your bank withdraws money from your account CLEAR Stamp

Cancelled Checks Check that bears the bank’s stamp, indicating it has cleared

Overdraft Check written for more money than your account contains Check is considered “bounced” Bank fee ($30) Bad check list

WI Bad Check Law Class A Misdemeanor Repay amount of check in full as well as any legal fees incurred Up to 1 year jail time and $1000 in fines

Checkbook Register Where you record all checking account transactions Deposits Written checks ATM withdrawals Transfers

Checkbook Register Practice 9/1/12 Deposit $100.00 to open your account. 9/2/12 Transfer $25.00 from your savings account into your checking account. 9/3/12 Write check #101 to Sprint for $47.00. Your account at Sprint is #30334. 9/4/12 Your paycheck is deposited for $250.00. 9/5/12 You buy lunch for $15.00 using your debit card. 9/6/12 Write check #102 to Holmen High School for a sweatshirt you bought for $25.00. 9/7/12 You deposit a check for $20.00 from your grandma.

Endorsing Checks 3 types Check can’t be cashed until it is endorsed (signed) No more than 1.5 inches from top edge of the back of the check 3 types Blank Special Restrictive

Blank Endorsement Signature of payee written exactly as the name on the front Only sign at the bank!

Restrictive Endorsement Restricts/ limits check use “for deposit only” Then sign Recommended for mailing checks!

Special Endorsement Sign check over to someone else “Pay to the order of ____________” Then sign it

Deposit Slip Form you fill out when depositing any or all of the 3 c’s (cash, check, coin) into your checking account 3 c’s- cash received= net deposit

Reconciliation Reconciliation- match your check register balance with your bank statement balance. Process of balancing your checkbook register with the bank statement

Reconciliation Outstanding Checks/ Deposits Checks or deposits that you have recorded in your check register yet are not shown on your latest bank statement

Formula for Reconciling Ending Bal. of Bank Statement +Outstanding deposits - Outstanding checks _____________________________ Adjusted balance on Bank Statement Ending Bal. of Checkbook Register + Interest from bank statement - Service charges/ fees ___________________________ Adjusted ending balance on checkbook register

Reconciliation Practice Ending bank statement bal. $1000 Ending check register bal. $1200 Outstanding deposits $400 Outstanding checks $200 Interest $5 Service charges $5