1. The Accounts Issue
The Accounts Issue www. FirstCommand.org

2. Principles Discussed FDIC Insurance Checking Accounts
Checks and Check Registry
Bank Services
Bank Products
ATM/Debit Cards
Savings Accounts
Certificate of Deposit (CD)
Money Market Accounts
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3. FDIC Insurance The Federal Deposit Insurance Corporation
Independent agency of the federal government
Insures deposits in banks and thrift institutions for at least $250,000
Identify, monitor and address risks to the deposit insurance funds
Limit the effect on the economy and the financial system when a bank or thrift institution fails
Insures deposits only
The FDIC directly examines and supervises about 5,250 banks and savings banks; more than half of the institutions in the banking system. The FDIC is the primary federal regulator of banks chartered by the states that do not join the Federal Reserve System.
In addition, the FDIC is the back-up supervisor for the remaining insured banks and thrift institutions. FDIC Insurance safeguards an individual’s account in case of situations when a bank fails and is unable to stay in business.
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4. Checking Accounts
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5. Understanding Checking Accounts
Advantages
Safety
Control over spending
Records of activity
Interest income
Disadvantages
Fees
Penalties
Advantages
Safety – accounts are FDIC insured up to $100,000, so there is not a likely chance of losing your money
Control over spending – having cash on hand becomes hard to monitor how much you actually spend on a daily basis. Banks usually send itemized statements, which lets the customer know exactly where they are spending money
Records of activity – online or paper statements helps you keep track of your deposits and withdrawals
Interest income – some checking accounts allow you to accrue interest for
the amount deposited
Disadvantages
Fees & Penalties
Some of the fees associated with having a checking account are:
Transfer fees – moving money from one account to another – for example from your savings to your checking
ATM fee - either a fee to use your bank’s ATM or another bank’s ATM, and some cases, both
Cash-advance fee – when your credit card is linked to your checking account, any overdraft amount becomes a cash advance on your credit card, causing you to be charged a cash-advance fee
Bounced check – usually you get charged a bank fee and a merchant fee, plus you owe the amount you over-withdrew. This is also called a NSF fee (non-sufficient fund fee)
The Accounts Issue www. FirstCommand.org

6. Opening a Checking Account
Required documents and information
Identification, Address
Date of Birth
Social Security Number
Application
Signature card
Deposit
Upon receipt of checks, verify personal information
Read everything before signing
Here is a list of documentation needed when you open a bank account.
When you receive your of checks, verify all your personal information.
Make sure to read everything to see what services you will be paying for and which ones are free, and how the bank will handle
over-drafting and day-to-day services.
The Accounts Issue www. FirstCommand.org

7. Maintaining a Checking Account
Do not include these on your printed checks:
Social Security number
Driver’s license number
Date of birth
Phone number
If using joint account, inform co-owner of all account activity
There are some things that you should never put on your printed checks, including your:
Social Security number
Driver’s License number
Date of birth
Phone number
Let joint owners of the account know of any activity and changes to the account.
The Accounts Issue www. FirstCommand.org

8. Writing a Check A C B D E F Date- The amount written in letters –
The date the check is written
Show cents as a fraction of 100.
Pay to the Order Of –
The organization or person to whom you are writing the check
For Example: Fifty-Seven and 50/
Ensure that the information in C and D match
The numerical amount –
For example: $57.50
The memo line
Note what was purchased
Your signature
Here are the items that need to be filled when writing a check (A-F):
Date-
The date the check is written
Pay to the Order Of –
The organization or person to whom you are writing the check
The numerical amount –
For example: $57.50
The amount written in letters –
Show cents as a fraction of 100.
For Example: Fifty-Seven and 50/
Ensure that the information in C and D match
The memo line
Note what was purchased
Your signature
The Accounts Issue www. FirstCommand.org

9. Using the Check Register
Item No. –
The check or transaction number
Date –
The date money came in or went out
Description of Transaction –
The organization or person to whom you wrote the check or made the debit purchase, or the type of activity (deposit, ATM, transfer...). Then in the gray area below, write the purpose.
Payment, withdrawal, or fee amount
The check mark –
Mark this column as you are reconciling (balancing) your checkbook.
Code –
This optional column is to help you record the type of transaction. (Codes are listed in the register).
Amount of deposit or interest –
Balance –
Add or subtract as appropriate to calculate the balance each time you record a transaction.
The check register is used to balance your account and for an individual to keep track of their spending and deposits. This is normally found at the back of each checkbook that you receive from the bank.
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10. Bank Services
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11. Bank Products Online banking Overdraft services
Banks offer a variety of products to their customers. One is online banking, where an individual can keep track of their account electronically.
Overdraft services are available, so if a person withdraws more money than what’s in the account the bank will pay it, out but will charge a fee and the overdrawn amount back to the individual.
The Accounts Issue www. FirstCommand.org

12. Understanding ATM/Debit Cards
These cards are issued for your checking account
ATM - Automated Teller Machine
Personal identification number (PIN) required
Withdrawals, deposits, transfers
Fees may be charged
Debit
PIN-based (direct)
Signature-based (deferred)
Record activities in check register
PIN-based (direct) – purchase made using PIN; funds come directly from checking account immediately
Signature-based (deferred) – carries Visa or MasterCard logo; PIN not used, sign slip; purchase amount deducted from checking account in 2-3 days
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13. Understanding Savings Accounts
Emergencies
Short-term needs
Avoid unnecessary use of credit
Pay yourself first
Direct deposit from paycheck
Automatic transfer from checking account
Automatic bank draft
Although the interest gained through a savings account might not be high in comparison to other investment vehicles, having a savings account can be beneficial for several reasons. Putting money away each month into savings helps for emergencies or short-term needs.
The primary role of a savings account is to help you pay yourself first. It helps individuals save for things they want to have, while a checking accounts covers the things they need.
The Accounts Issue www. FirstCommand.org

14. Opening a Savings Account
Required Information
Identification
Date of birth, address
Social Security number
Application
Signature card
Deposit
Read everything before you sign up
 Make sure to read everything to see what services you will be paying for and which ones are free, and how the bank will handle over-drafting and day-to-day services.
The Accounts Issue www. FirstCommand.org

15. Certificates of Deposit
FDIC insured up to maximum allowed
Owner makes deposit of any amount
CD earns specific rate of interest (usually higher than regular savings account) for a specific amount of time
Larger deposits held for longer terms usually have higher interest rates
At maturity, owner receives deposit amount plus interest earned
Not for emergency savings
Early withdrawal may be penalized
Shown above are some criteria for a CD account.
The Accounts Issue www. FirstCommand.org

16. Money Market Accounts FDIC insured up to maximum allowed
Type of savings account with slightly higher interest rate than regular savings account
May have limited withdrawal capability
Higher interest rate if required average or minimum balance is maintained
Interest compounded daily and credited at close of each statement cycle
Used for monthly & emergency savings, short-term needs, larger planned purchases (vacation, car…)
Shown above are some criteria for a Money Market account.
The Accounts Issue www. FirstCommand.org

17. Questions
First Command Educational Foundation 1 FirstComm Plaza Fort Worth, TX Toll Free:
The Accounts Issue www. FirstCommand.org