1. Banking Basics
Deposit Accounts
Created By: Laura Kinchen

2. Types of Deposit Accounts
Checking accounts
Savings accounts
Certificates of deposit (CD’s)

3. Checking accounts Write checks to pay bills or buy goods or services
The most commonly used payment service is a checking account. Money that you place in a checking account is:
Called a demand deposit
Able to be withdrawn at any time, or on demand
Checking accounts can be divided into three main categories:
Regular accounts
Activity accounts
Interest-earning accounts
Write checks to pay bills or buy goods or services
Linked to an ATM/Debit card

4. Shopping Around: Checking Accounts
SERVICES
Location of bank
Location of ATMs
Banking hours
Minimum balance required
Minimum transactions or limits
Interest-bearing accounts?
Other
COSTS
Non-primary bank ATM transactions
In-branch transaction fees
Per-check fees
Other checking fees
Overdraft protection
Printing of checks

5. Using a Checking Account
Checks are:
the most common kind of negotiable instrument in use
a safe way to send funds through the mail
convenient receipts for the people who write them

6. Types of checking accounts
Two common types of checking accounts are joint checking, which is owned by two more people, and express checking, which was created for customers who seldom need to enter the bank building.
An express checking account would be appropriate if you're comfortable using an ATM, telephone or computer to make bank transactions.
These accounts usually have low minimum balance requirements and no monthly fees.

7. Opening a Checking Account
Deposit money in a bank
Sign a signature card
**Then the bank agrees to pay money out, up to the amount you have deposited, when you write a check.

8. Balancing your Checkbook
You should balance, or reconcile, your bank statement as soon as possible after receiving it. Carefully compare the check register balance with the bank statement balance to make sure that they agree.
Don’t forget to take into consideration outstanding checks, or checks you have written that have not yet been returned to the bank for payment.

9. Writing a Check
Banks provide regular and special printed check forms. These checks display a series of numbers printed in magnetic ink that make it possible for computers to process the checks quickly and accurately.

10. Personal Check

11. Parities to a Check
A check is a draft drawn on a bank and payable on demand.
Drawer: person who writes the check
Drawee: bank ordered to pay the money
Payee: person the check is made out to

12. What is a Savings Account
A deposit account designed to simply hold money that you do not need immediate access to.
When contrasted with checking accounts, bank savings accounts tend to pay a slightly higher rate

13. Types of Savings Accounts
Two common types of savings accounts are passbook accounts and high-yield savings accounts. Passbook savings accounts are so named because all deposits, withdrawals and interest are recorded in a passbook, which is updated by the bank but kept by the account holder. This type of account is good for someone who makes infrequent transactions.
A high-yield savings account is an account the bank offers only to certain clients because it earns a higher interest rate than other accounts. To qualify, you must make a sufficiently large initial deposit and maintain a high minimum balance.

14. Savings Accounts Earn more money on your deposits
Regular savings accounts, traditionally called passbook accounts, are ideal if you plan to make frequent deposits and withdrawals. These accounts:
Require little to no minimum balance
Allow you to withdraw money on demand
The trade-off for this convenience is that the interest you earn will be low compared with other savings plans.
Earn more money on your deposits
Usually use money only on things you saved for
Can be linked to an ATM/Debit card

15. Easy Access to Savings Account
Savings accounts offer easy access to your cash. In other words, your money is liquid (meaning you can make a withdrawal easily and quickly) in a bank savings account.
Note that savings accounts are not as liquid as checking accounts, because you can get money from a checking account by simply writing a check.

16. Savings Accounts Grow Your Money
When you have money in a bank savings account, your money earns interest.
Your bank savings account pays a rate of return on all the money in the account called your APY. That means that you get "paid" for keeping your money in the account.
savings accounts pay you more on your money than checking accounts

17. What is a Certificate of Deposit
A certificate of deposit (CD) is a short to medium-term, FDIC insured investment available at banks.
Customers agree to lend money to the institutions for a certain amount of time. In exchange for doing so, the customers is paid a predetermined rate of interest.

18. Certificates of Deposit
CDs are accounts where you leave your money for a set period of time, such as six months, one, two, or five years, which is called a term.
CD’s usually earn a higher rate of interest than in a regular savings account. The longer you keep your money in a CD, the higher the interest rate.
you will pay a penalty if you withdraw your money early.

19. Pros & Cons Pros Cons Savings Account Insured Low minimum balance
Money earns interest when it’s in the
account.
Can easily withdraw your money when you need it.
You must go to the bank to
withdraw money.
You cannot write checks.
Low rate of return
Checking
Safe place to put your money
Can write checks which helps track your
spending.
Can withdraw your money when you need it.
A safe alternative to carrying a lot of cash.
Money may not earn
interest.
May need to pay fees for
checking.
CD’s
Guaranteed rate of return for time of CD
The rate of return on CDs is higher than savings accounts
Minimum deposit
Locked in for a specified period of time
Possible penalty for early withdrawal
U.S Savings Bonds
Low minimum deposit
Guaranteed by the government
Free from state and local taxes
Lower rate of return when cashed in before bond reaches maturity date