1. Chapters 29 & 30 Checking and Savings Accounts

2. Thinking Questions Are you saving money for something you want or need? How do you keep track of your money?

3. Savings Accounts Saving: Putting money aside for the future. Savings accounts: bank accounts that give interest for depositing money in their accounts. Banks pay interest because they use that money to make loans to other customers. Banks pay interest because they use that money to make loans to other customers.

4. Types of Interest There are two basic kinds of interest: Simple interest is calculated once in a given period of time. Compound interest allows the saver to earn interest not only on the amount that was deposited, called the principal, but also on the earned interest.

7. Types of savings accounts Regular Savings Account Interest is paid monthly. The bank may require a minimum deposit. (This means the amount of money you put into the account each time.) There may be limits on the number of deposits and withdrawals you can make. Some banks charge fees. Certificates of Deposit (CDs) Your money must remain in the account for a fixed period of time, called the term. The more money you deposit, and the longer you keep it in the account, the more interest you’ll earn. You’ll have to pay a penalty if you withdraw your money before the term is completed. Money Market Account This type of savings account allows limited checkwriting. You may have limited withdrawals each month. Generally these accounts pay higher interest rates than regular savings accounts. Interest is calculated at the end of a fixed time period, for example, every month. Interest rate may change.

8. Deposit Slips To put money in your savings account at the bank, you fill out a deposit slip. A deposit slip is a form used to record the details of the transaction. Once you’ve filled out the deposit slip, you give it to the bank teller, who will take care of the rest.

9. Withdrawal Slips If you withdraw money at the bank, you’ll need to fill out a withdrawal slip and have a teller watch you sign it. Then you must show the teller a photo ID.

10. Keeping Records Part of good money management is keeping careful record of deposits and withdrawals from bank accounts. As part of the service they provide, banks keep track of their customers’ savings accounts. However, it’s the account holder’s responsibility to keep track of all transactions involving his or her account. It’s essential to make careful calculations.

13. Chapter 30: Checking

14. Discussion Questions Checking Accounts Discussion Questions Describe other ways people can pay for things besides paying in cash. When people write checks, why do stores accept them? Isn’t a check just a piece of paper?

15. Checking Accounts Checking accounts are very similar to savings accounts. Both types of accounts keep your money safe, and both are very easy to access if you need cash. Checking accounts are designed to be day-in and day- out money-management tools, while savings accounts are designed for long-term money- management. Unlike savings accounts, banks expect people to make frequent withdrawals and deposits to checking accounts.

16. Similarities and differences An important difference between checking and savings accounts is that checking accounts come with checks! A second important difference is that most savings accounts earn interest, while many checking accounts do not. Checks can be used to make purchases, just like cash, and they help people pay bills or make simple purchases without carrying around cash or sending it through the mail. People use checks for rent, groceries, clothes.

17. Bad Checks In order to write a check, there must be sufficient funds in the checking account to cover the amount. Writing a check when you know there is not enough money in the account to cover it is a violation of the law. This is called writing a “bad check.” Individuals who write “bad checks” may be fined or otherwise punished.

18. Keeping Records When you write a check or make a deposit to your checking account, it’s very important that you immediately record that transaction in your check register. That way, you will keep track of how much money you have available in your account, and avoid writing a “bad check.”

19. What’s on a check?