1. Banking Basics

2. Getting the idea Banks have different types of accounts for your money. A bank account earns interest if the bank pays you an additional amount each month for keeping your money at the bank. A checking account is used to pay bills and earns little or no interest. A savings account is used to save money and always pays you some amount of interest.

3. Checking Accounts When you open a checking account you receive: Checkbook: holds your checks, the register, and usually deposit slips. Register: used to record the checks you write, withdrawals you make, and the deposits you make. Deposit slip: used to deposit money to your account.

4. Checking Accounts Debit card: used to make purchases electronically or to withdraw money from an automated teller machine (ATM). – The money is quickly deducted from your checking account.

5. Example 1 Casey wants to open a checking account. Her bank provides her with two choices. A description of each is shown in the table. Casey plans to have her paycheck deposited to the account each week and expects to keep a balance of about $5,000 in her account. Which checking account should Casey choose?

6. Checking Account Options Checking Account 1Checking Account 2 No fee if you maintain a balance of $1,500 in the account or if you have at least one direct deposit of $250 or more per month. Otherwise there will be a monthly $12 fee. The account earns no interest. No fee if you maintain a balance of $10,000 in the account. Otherwise there will be a monthly $25 fee. The account earns interest.

7. Strategy: Use the information from the table Step 1: Compare how Casey will use the account to the accounts offered by the bank. – Casey plans to have her paycheck direct deposited, so she will not be charged a monthly fee if she chooses Checking Account 1. – She expects to keep a minimum balance of $5,000 in her account. If she chooses Checking Account 2, she will be charged $25 per month.

8. Strategy: Use the information from the table Step 2: Make a decision – Checking Account 2 earns interest, but probably not enough interest to earn as much as the monthly fee of $25. She is better off opening the account where she will not be charged a fee. Solution Casey should choose Checking Account 1.

9. Example 2 Toni’s check register is show below. Balance her account for her. DateCheck Number DescriptionPayment/ Withdrawal DepositBalance 25|50 6/19Deposit25000 6/191267Electric Company12215 6/211268Ben’s Flowers3125 6/25Transfer10000 6/251269Cars R Us18500

10. Strategy: Work in an organized manner – top to bottom Step 1: Make a plan – Start with existing balance. Add the deposits and transfers and subtract the checks and withdrawals in order. Step 2: Complete the table – Start with the $25.50 and add $250.00 – Next start with the $275.50 and subtract $122.15 – And so on.

11. Example 2 Solution Toni’s completed check register is show below. DateCheck Number DescriptionPayment/ Withdrawal DepositBalance 25|50 6/19Deposit2500027550 6/191267Electric Company1221515335 6/211268Ben’s Flowers312512210 6/25Transfer1000022210 6/251269Cars R Us185003710