1. How much do you know about the most common form of bank account?
Checking Accounts 101
How much do you know about the most common form of bank account?

2. What’s the point?
It is a demand account – allowing you to withdraw money at any time
Convenient way to pay bills
Safer than using cash
Built-in record keeping system that can be used to track expenses and create budgets
Provides access to other banking services
Instant loans, online banking, 24-hour access through ATMs

3. Responsibilities of maintaining a checking account
Accurate record keeping is essential
Truncation – banks not returning cancelled checks
Do not bounce checks
Illegal and costly
Americans pay over $10 billion in overdraft fees per year
Be careful of playing the float
Betting that a deposit will clear the bank before a check is presented for payment
Computers have virtually closed the window

4. Who’s in Charge? Banks regulators enforce banking laws
Banking laws are written on the state and federal level
Charters are licenses to operate a bank
Charters can be issued by the state or federal banking authorities
The type of bank charter determines which government agency has regulatory authority

5. Health and Safety Concerns
Legislation passed during the Great Depression in response to bank runs
The Federal Deposit Insurance Company covers the standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
Bank regulators regularly audit banks to ensure financial health
The Federal Reserve can act as the Lender of Last Resort to financial institutions in times of crisis.

6. The Federal Reserve System
The Central Bank of the United States
Comprised of 12 independent banks
Regulates bank holding companies and certain state chartered banks
Serves as repository for bank reserves
Regulates the economy by setting interest rates (discount rate) and controlling the money supply

7. Opening a checking account
Application
Fill out and sign a signature card
Provides the bank with your official signature
Initial deposit
Joint accounts are those accounts with two or more signatories who have access to the account
Security and code words

8. Parts of a check

9. How to write a check Always use pen Write legibly
Sign your name exactly as it appears preprinted on the check and on the signature card
Avoid mistakes
If you make a mistake void (cancel) the check and write a new one
To cancel a check, write the word VOID across the face of the check
Make sure you have enough money in the bank to cover the check

10. Other checking activities
Online banking
Register with your bank’s website, establish a PIN to gain account access
Set up a list of payees
Don’t forget to record each transaction
Deposits
Complete a deposit slip
Retain receipt as proof of the transaction

11. Keeping track of your account
Record checking transactions in a checkbook register
OR use a financial management program such as Microsoft Money or Quicken
Record each check written, deposit made and any electronic transactions
Compare your register balance with your monthly bank statement
Don’t forget to record bank fees

12. Endorsements Required to cash a check All payees must sign
Endorsements must be in ink
Endorse checks within 1 ½ inches from the trailing edge of the check
Usually marked on the back of the check

13. Types of Endorsements
Blank – the signature of the payee written exactly as his or her name appears on the front of the check
Correcting for any mistakes
Once endorsed, anyone can cash it
Special – transfers the right to cash the check to someone else
Pay to the order of....
Restrictive – limits the use of the check

14. Types of Checking Accounts
Joint account
Survivorship
Special accounts
Limited use, fee for use
Standard accounts
Interest-bearing accounts
Share accounts
Credit unions

15. Other Banking Services
Savings accounts
Credit cards
Safe deposits boxes
Loans and trusts
Other financial services
Online and telephone banking
ATM/Debit cards
Debit cards are ATM cards with additional POS features

16. Other Banking Services (cont’d)
Guaranteed payment checks
Certified check: a personal check that the bank guarantees (certifies) to be good
Cashier’s check (or bank draft) is a check written by the bank on its own funds
Money orders
Stop payment orders – a request that the bank not cash a specific check

17. It’s not free (Bank fees)
How do banks earn money?
Interest on loans > interest on deposits
Charge fees to cover costs
Non customer fees
Maintenance fee
Per check fees
Minimum balance fees
ATM fees
NSF fees
Service fees for online bill payment, cancelled checks, use of a teller