1. Checking Accounts Savings Accounts and Banking Services
MYPF
9 &10
Checking Accounts Savings Accounts and Banking Services
9.1 Checking Accounts
9.2 Banking Services and Fees
10.1 Growing Money: Why, Where, and How
10.2 Savings Options, Features, and Plans
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2. Checking Account Basics
Checks follow a process through the banking system.
The payee cashes your check.
The bank that cashed the check returns it to your bank.
Your bank withdraws the money from your account and sends it to the other bank.
Your bank then stamps the back of your check, indicating that it has cleared.
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3. Checking Account Basics
(continued)
You must also maintain enough money in your account to cover all the checks you write.
A check written for more money than your account contains is called an overdraft.
A bank that does not honor a check usually stamps the check with the words “not sufficient funds” (NSF) and returns the check to the payee’s bank.
When this occurs, the check has bounced.
Your bank can charge you a fee for each NSF check processed.
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4. Checking Account Basics
(continued)
Floating a check is writing a check and hoping to deposit money to cover it before the check clears.
Floating a check is very risky because today’s electronic systems allow checks to process very quickly and is illegal in most states.
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5. Types of Checking Accounts
Joint accounts
Special accounts
Standard accounts
Interest-bearing accounts
Share accounts
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6. Opening a Checking Account
Signature authorization form
Initial deposit
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7. Using Your Checking Account
Writing checks
Paying bills online
Making deposits
Using a checkbook register
A checkbook register is a booklet used to record checking account transactions.
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8. Making a Deposit
teens – lesson 6 - slide 6-D

9. Check Details
Click the numbers 1 2 3 4 5 6 7 8 9 10 11
Here is where you write the name of the party you are writing your check to (the payee). Be sure to write or print legibly!
On the lower line, write out the amount like this.
Make sure your personal information on the check is correct.
Here is the number of this Check.
Put your personal signature here.
This is your Account Number. (Note that sometimes these two numbers are the reverse of what is shown here.)
This is the Routing Number for your bank (used for electronic transfers of funds from your account to the payee’s account)
This is just your check number again (see above right).
Legibly print the amount of money this check is for.
Place to add any information you want to related to this check.
Enter the date you write each check.
Of course, you’re responsible for making sure your account information and checks are stored in a safe place. And while everyone makes an occasional mistake, you are responsible for keeping track of your balance and making sure you have enough money in your account when you write a check.
The consequences of misusing a checking account can be far greater than just paying fees. If the bank decides you have an excessive number of overdrafts, it may close your checking account. This could be reported to the credit bureaus. A history of checking account abuse can prevent you from obtaining another checking account and damage your credit history. And intentionally writing checks without enough funds to cover them is considered check fraud - a serious crime.
Some other things to consider when you open an account at a bank or credit union include:
• Is the bank or credit union convenient for you? Will you be able to get there during the hours it’s open if necessary? Does the bank have ATM locations in neighborhoods you frequent? Does it let you use other banks’ ATMs free of charge, several times a month?
• Does the bank or credit union offer other services you’re interested in, such as online banking?
• Do you meet the institution’s age requirement for a checking account? If not, you’ll need an adult co-signer to open an account.
Along with these account responsibilities come your rights. You can get your money whenever you ask. Your deposits are insured for up to $100,000. And, you can expect to be apprised of any changes in fees or terms of your account.
If you find a mistake when you check your monthly statement - say, a withdrawal you didn’t make, a duplicate purchase or an incorrect deposit amount - you have the right to ask your bank to investigate the error.
And if the bank finds an error, you have the right to have your account corrected.
Carrying checks definitely is safer than cash but, of course, you still have to be careful. People who find blank checks you’ve lost can try to alter them or forge your signature. So taking a few precautions is smart:
Always write checks in ink.
Once you endorse a check (sign the back of it), anyone can cash it. So don’t endorse checks you plan on depositing until you get to the bank or credit union. As an added measure of security, some people like to write “For Deposit Only” and their account number underneath their endorsement.
Keep unused checks in a safe place.
Check your statement every month to make sure it doesn’t show any withdrawals you didn’t authorize and that your activity matches what you recorded in your checkbook register.
Demonstrate how to correctly write a check that is legible and difficult to forge as the students fill out a check. Use blank sample checks available at many financial institutions or from page 64 of the HSFPP student manual.
Example: Fill out a check to a local business for $52.34.
Filled-in data should align at the left of every blank; this will help ensure that numbers cannot be altered. All lines should be filled in completely so data cannot be added. You should sign your formal, legal signature because this is a contract/promise to pay.
Writing a check is like creating a minicontract between you and the person or business you’re paying. When you sign at the bottom of the check, you’re agreeing to pay the person, named on the “Pay to the Order of” line, the amount you specified, on demand. On demand means that your bank must honor your check by paying the specified amount to the payee (the person or business to whom you wrote the check) when she or he cashes it, as long as you have enough money in your account to cover it. Get into the habit of recording each check you write into your checkbook register, along with your deposits and withdrawals. And always write all checks in ink.

10. Endorsed check DO NOT WRITE BELOW THIS LINE ENDORSE HERE:
When you receive a check, the process works in reverse. You take the check to your bank or credit union and sign (or endorse) it on the back. Your bank or credit union will cash the check or credit your account for that amount, and the funds will be transferred from the payer’s bank or credit union to yours. Sometimes, if the check is for a large amount or from an out-of-state bank, your deposit may be held a few days before you can have access to your money. In this way, the bank has time to verify that the payer actually has enough money to cover the check. Using a checking account provides many benefits:
Convenience - If you use checks, you don’t always have to have cash before making a purchase. And you shouldn’t send cash through the mail, just checks, to pay bills. Also, you usually can access your checking account by using your debit card at an ATM.
Safety - You don’t have to carry a big wad of cash when you go shopping. Also, stolen checks can be replaced. Lost or stolen cash cannot; it simply is gone.
Easier budgeting - A checking account also can help you budget your money. When you use your check register to record to whom you wrote checks, you’re automatically keeping track of where your money is going, which makes evaluating your spending habits easier.
Proof of payment - Checks provide written proof that you made a payment to someone or a business. Each time you write a check that ultimately clears your account (when the money is taken from your account and added to the payee’s account), several records of it will be created, allowing you to prove that you did, in fact, make a payment, should anyone ever challenge you about it.
The catch is you usually pay for these benefits in the form of fees automatically deducted from your account. While you may see ads for “free” checking accounts, you should know that no checking account is completely free. Even if you don’t pay a monthly fee, you could end up paying some of the fees.

11. Bank Reconciliation
The process of matching your checkbook register with the bank statement is known as bank reconciliation.
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12. Endorsing Checks
A check generally cannot be cashed until it is endorsed.
To endorse a check, the payee signs the top part of the back of the check in ink.
There are three major types of endorsements.
Blank endorsement
Special endorsement
Restrictive endorsement
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13. MYPF
4/19/2017
Blank Endorsement
A blank endorsement is the signature of the payee written exactly as his or her name appears on the front of the check.
Payee endorses upon cashing or depositing the check.
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14. MYPF
4/19/2017
Special Endorsement
A special endorsement, or an endorsement in full, is an endorsement that transfers the right to cash the check to someone else.
Diana Jones now has the power to cash or deposit the check
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15. Restrictive Endorsement
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4/19/2017
Restrictive Endorsement
A restrictive endorsement restricts or limits the use of a check.
Donald MacLane decides this check will be deposited, once he states this on back it can not be cashed by anybody else.
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16. Let’s Practice
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17. Why You Should Save
The best reason to save money is to provide for future needs, both expected and unexpected.
Saving regularly will help you meet your short-term and long-term needs.
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18. Short-term Needs
Short-term needs are expenses beyond your regular monthly items.
Usually you will have to pay for these things out of savings.
Examples of short-term needs include the following:
Emergencies
Vacations
Social events
Repairs
Major purchases
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19. Long-term Needs
Long-term needs are expenses that are costly and require years of planning and saving.
Examples:
Home ownership
Education
Retirement
Investing
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20. Financial Security
Peace of mind comes from knowing that when needs arise, you will have adequate money to pay for them.
The amount of money you save depends on:
The amount of your discretionary or disposable income
The importance you attach to savings
Your anticipated needs and wants
Your willpower
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21. How Money Grows
The amount of money you deposit into a savings account is called the principal.
For the use of your money, the financial institution pays you money called interest.
Interest represents earnings on principal.
As principal and interest grow, more interest accumulates.
This is known as compound interest, or interest paid on the original principal plus accumulated interest.
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22. Annual Percentage Yield (APY)
Annual percentage yield (APY) is the actual interest rate an account pays, stated on a yearly basis with the compounding included.
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23. Compounding Interest Annually
Year
Beginning Balance
Interest Earned (6%)
Ending Balance 1
$100.00
$6.00
$106.00 2
$6.36
$112.36 3
$6.74
$119.10
The Year 1 ending balance is the Year 2 beginning balance.
The Year 2 ending balance is the Year 3 beginning balance.
The 6% interest rate stays the same, but the interest earned increases each year.
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24. Compounding with Additional Deposits
Year
Beginning Balance
Deposit
Interest Earned (5%)
Ending Balance 1
$0.00
$100.00
$5.00
$105.00 2
$10.25
$215.25 3
$15.76
$331.01 4
$21.55
$452.56
$ $ = $205.00
$ × 0.05 = $10.25
$ = $215.25
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25. Where to put your money so it can grow??
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26. Regular Saving Account Basics
A savings account (at a bank) or share account (at a credit union) is a place to deposit money you don’t plan to spend right away.
You can add or take out money at any time, without penalty.
A savings account a good place for short- to medium-term financial goals.
Many banks and credit unions make saving easy by allowing you to set up an automatic savings plan, where money is transferred automatically from your checking to your savings account every month.
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27. Regular Saving Account Basics
MYPF
Regular Saving Account Basics
The savings institution is allowed to use your money to invest and earn a profit.
You are paid a small amount of interest for depositing your money.
Your money is insured against loss. Deposits in banks, no matter what type, are almost always safer than other investments because of the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA).
A savings account (at a bank) or share account (at a credit union) is a place to deposit money you don’t plan to spend right away.
You can get cash out of a savings account quickly and without penalty. This makes a savings account a good place for short- to medium-term financial goals. Finally, some banks and credit unions make saving easy by allowing you to set up an automatic savings plan, where money is transferred automatically from your checking to your savings account every month.
Fees for savings accounts are usually pretty minimal, but be sure to read the fine print before you open an account.
Opening a savings account is a cinch. Take cash or a check made out to the financial institution of your choice for your first deposit. You’ll also need to bring picture identification, such as a drivers license, passport or student ID.
Check with the financial institution to find out what and how many forms of ID it requires. Make sure you also take your Social Security number. You will be asked to fill out a few forms with your address and phone number, date of birth and maybe some current employment information. You also will have to sign what’s called a signature card to verify that a signature is yours later if necessary.
Once you make your first deposit, you’ll receive monthly statements showing your account balance. This is simply a total of your deposits, withdrawals and interest earned. And when you’re ready to spend money in your savings account, you can fill out a withdrawal slip and get cash, fill out a transfer slip and move money to your checking account or possibly withdraw your money through an automated teller machine (ATM).
Your biggest responsibility with a savings account is to keep your account number and information in a safe place. You also need to review your monthly statement and make sure all of the deposits and withdrawals listed on your statement are correct and that no unauthorized withdrawals or errors have occurred. Mistakes do happen, but rarely.
Banks and credit unions are responsible for keeping your money safe and giving it to you, with interest, whenever you ask. Your bank also agrees to continue to carry government insurance to protect up to $100,000 of your deposits.
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28. Savings Deposit Today’s date goes here Print Your Name Here2 6 x 1
Today’s date goes here 1 2 5 9 7 3 7 5 2 5
Print Your Name Here
Print Your Address Here 3
Use this PowerPoint to guide students to fill out a savings deposit slip as they complete
Make the Deposit (Exercise 5C, Make the Deposit) in supplementary materials. 5 3 4
Sign Your Name Here 4 7 5 5 3 3 3 3 3 3 3 4 2 5 3 4
Click the numbers

29. Checking Account Advantages
Convenience
Safety
Built-in record keeping system
Access to bank services
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30. Regular Savings Account Advantages
MYPF
Regular Savings Account Advantages
A savings account has a major advantage—high liquidity.
Liquidity is a measure of how quickly you can get your cash without loss of value.
Convenience
Safety
Built-in record keeping system
Access to bank services
A regular savings account is said to be very liquid because you can withdraw your money at any time without penalty.
The tradeoff for high liquidity, however, is a lower interest rate.
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31. Liquidity
Liquidity is how quickly you can turn savings into cash when you want it.
The need for liquidity will vary, based on your age, health, family situation, and overall wealth.
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32. Safety
Safety of principal means that you are guaranteed not to lose your savings deposit, even if the bank or other financial institution fails and goes out of business.
(FDIC)
(NCUA).
Most financial institutions are insured by a government agency, the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA).
Deposits in banks, no matter what type, are almost always safer than investments in the stock market.
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33. Convenience
Locations
Services offered
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34. Interest-Earning Potential (Yield)
MYPF
Interest-Earning Potential (Yield)
You want to earn as much interest as you can on your deposit, while maintaining the degree of liquidity, safety, and convenience you want.
Shop around for the best Annual percentage yield (APY) in your area for the type of account you want.
Because all financial institutions must calculate APY the same way, you can use APY to easily compare the yields on different accounts.
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35. Selecting a Savings Plan
Liquidity
Safety
Convenience
Interest-earning potential (yield)
Fees and restrictions
Generally are advantages if you do your homework
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36. Additional Savings Options
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37. Certificate of Deposit
A certificate of deposit (CD), or time deposit, is a deposit that earns a fixed interest rate for a specified length of time.
A CD requires a minimum deposit.
You must leave the money in the CD for the full time period.
If you take out any part of your money early, you will pay an early withdrawal penalty.
A CD has a set maturity date, which is the date on which an investment becomes due for payment.
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38. Early CD Withdrawal Penalizes Principal
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39. Money Market Account
A money market account is a type of savings account that offers a more competitive interest rate than a regular savings account.
There are two different kinds of money market accounts:
Money market deposit account
Money market fund
On average, money market funds will pay a higher interest rate than money market deposit accounts.
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40. All banks and Credit Unions Offer
Checking Accounts Savings Accounts Money market Accounts Certificate of Deposits
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41. Where to Save Commercial banks Savings banks
Savings and loan associations
Credit unions
Brokerage firms
Online accounts
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42. Credit Unions and Banks
For-profit companies owned by shareholders
Not-for-profit institutions owned and controlled by their own customers, who are known as members
Banks
Credit Unions
Managed by a paid board of directors elected by the bank’s shareholders
Managed by a member and volunteer board of directors, who are elected by other members
Offer their services to everyone; anyone can become a customer
Offer their services to special groups of people and may be employer-, church-, community-, or alumni-sponsored (among others); customers must qualify for credit union membership through their membership with these special groups of people
Who’s Who in Financial Services
The first step in taking care of your basic financial needs is finding a bank or credit union. A bank is a for-profit company owned by investors in its stock. These stockholders elect a paid board of directors to manage the bank for them. Anyone can walk up to a bank and open an account.
Credit unions are financial institutions owned by their customers, who also are called members. These members elect a volunteer board of directors (who are also members) to manage the credit union for them. But credit unions have membership qualifications. By law, each credit union must serve a defined segment of the population. To join a credit union, you have to work for or have a family member who works for an employer in that segment.
Aside from an employer-sponsored credit union, you may be able to join another type of credit union by becoming a member in a church or social group, by having a certain type of job (say, a school teacher), or by living or working in a certain community.
Despite their differences, both banks and credit unions can meet your needs. Both provide a variety of basic financial services, including savings and checking accounts, issuing credit and debit cards, and providing loans for cars, homes and other purposes. 1 2 3

43. Credit Unions and Banks
MYPF
Credit Unions and Banks
Owned by shareholders; customers do not have ownership or voting privileges unless they also own stock in the bank
Owned by each credit union member, who has equal ownership and one vote, regardless of how much money a member has on deposit
Banks
Credit Unions
Profits benefit a small group of stockholders
Profits are returned to members in the form of lower fees and loan rates and higher interest on deposits
Accounts are federally insured up to $100,000 by the Federal Deposit Insurance Corp (FDIC)
Accounts are federally insured up to $100,000 by the National Credit Union Administration (NCUA) 1 2 3
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44. Online & Telephone Banking
(continued)
Most banks also allow and encourage electronic transfers of money.
An electronic funds transfer (EFT) uses a computer-based system that enables you to move money from one account to another without writing a check or exchanging cash.
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46. Direct Deposit
With direct deposit, your net pay is deposited electronically into your bank account.
You receive a nonnegotiable copy of your check and stub, notifying you of the amount deposited directly into your account
You can have your automatic deposit split between accounts, with some going into savings and some going into checking to cover your bills.
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47. Automatic Deductions
Automatic deductions represent money you have authorized your bank or other organization to move from one account to another at regular intervals.
With a payroll savings plan, you authorize your employer to make automatic deductions from your paycheck each pay period.
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48. Debit Cards
A debit card is a card that deducts money from a checking account almost immediately to pay for purchases.
When a debit card is used, the amount of the purchase is quickly deducted from the customer’s checking account and paid to the merchant.
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49. How to Use a Debit Card Swipe the debit card in the card reader
Choose the “Debit” option.
Enter your PIN number*
Enter the amount of cash back, if desired.
Money is taken directly out of your checking account, so enter the amount spent into your checking ledger and/or keep track of it through your online banking account.

50. About Your PIN
PIN stands for personal identification number. This number gives you access to your account, so keeping it secret is important.
Memorize your PIN number. Do not write it down and keep it somewhere in your wallet (where someone could find and use it).

51. Automated Teller Machines
MYPF
4/19/2017
Automated Teller Machines
An Automated Teller Machine is often called an ATM.
To use ATMs, you must
Have a card that is electronically coded (usually your debit card)
Know your personal identification number (PIN)
Getting cash is a common ATM transaction.
Using a debit card you can withdraw cash from your checking or savings account.
Using a Visa or MasterCard, you can receive a cash advance electronically.
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52. How to Use a Credit Card
Swipe the credit card in the card reader or give it to the clerk to swipe.
Choose the “Credit” option.
Sign the receipt.
Keep and save your copy of the receipt to record later so you can keep track of what you have spent.

53. Money Orders
Banks sell money orders to people who do not wish to use cash, or do not have a checking account. Also, money order can be requested by businesses.
A money order is like a check, except that it can never bounce.
There is a charge for purchasing a money order.
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54. Stop Payment Orders
A stop-payment order is a request that the bank not honor a specific check.
The usual reason for stopping payment is that the check has been lost or stolen.
Most banks charge a fee for stopping payment on a check.
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55. Safety Deposit Boxes
Financial institutions offer customers a safe deposit box to store valuable items or documents.
They charge a yearly fee based on the size of the box.
Keeping important documents and other items in a safe deposit box ensures that the items won’t be stolen, lost, or destroyed.
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56. Safety Deposit Boxes
(continued)
Examples of items commonly kept in a safe deposit box include
Birth, marriage, and death certificates
Deeds and mortgage papers
Stocks and bonds
Jewelry
Coin collections
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57. Loans and Trusts
Financial institutions also make loans to finance the purchase of cars, homes, home improvements, vacations, and other items.
Banks can also provide advice for estate planning and trusts.
Banks can act as trustees of estates for minors and others.
A trustee is a person or an institution that manages property for the benefit of someone else under a special agreement.
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58. Notary Public
A notary public verifies a person’s identity, witnesses the person’s signature on a legal document, and then “notarizes” the signature as valid.
Financial institutions typically have a person on their staff who is a notary public.
This person provides notary services for account holders, usually without charge.
For noncustomers, however, there is typically a small fee.
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59. Bank Fees
Banks charge fees to their customers to help cover their operating costs.
The best way to avoid fees is to choose the right kind of account.
Shop around and find the account that is right for you.
Be aware of the rules of your account, so that you don’t violate them and be required to pay high fees.
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60. Fees and Restrictions
Different accounts and institutions have different rules.
Before you open an account, be sure to understand the withdrawal restrictions, minimum balances, service charges, fees, and any other requirements.
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61. Examples of Bank Fees Loan fees Trustee fees Check cashing fees
Per-check fees
Monthly service fees
Overdraft fees
NSF check charges
ATM transaction fees
Safe deposit box fees
Teller service fees
Minimum balance fees
Fees for guaranteed-payment checks
Notary service fees
Online bill payment fees
Fees to return canceled checks
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62. Savings Accounts, Certificates of Deposit (CDs),
All Financial Services All of these services can be found in most banks or credit unions
Online Banking, Online Brokerage, Checking Accounts,
Savings Accounts, Certificates of Deposit (CDs),
Individual Retirement Accounts (IRAs), Savings Bonds,
Credit Cards, Check Cards, Gift Cards, Payroll Cards,
Commercial Prepaid Cards, Auto Loans, Boat Loans, RV Loans, Student Loans, Other Loans, Home Mortgages,
Mortgage Refinance Loans, Home Equity Loans, Military Bank, Student Centers, Accessible Banking,
Small-business Banking Services, Merchant Services ,
Home Buying, Investment Services, IRAs, Mutual Funds,
529 College Savings Plans, Life Insurance (various types),
Long-term Care Insurance, Homeowners Insurance,
Renters Insurance, Condo Insurance, Auto Insurance, Supplemental Income Insurance, Foreign Currency Exchange, Travelers Checks, International Wire Transfers
Arrange students in teams of two to three. Set a time limit of one to two minutes, and challenge each team to a contest to list as many banks and credit unions in the community (or area) as they can think of. After comparing the list among teams, distribute a local phone directory to each team to check for any additional local businesses that might also provide financial services.