1. Checking Accounts & Banking Services
Lesson 1

2. Bell Ringer
Use your book and a partner to discuss the importance of having a checking account, make a list of the importance as well as the times that you have used a checking account or a check.

3. Purpose of a Checking Account
A checking account- a banking service wherein money is deposited into an account
Another name for a check is draft
Checks can be written to withdraw money from the account as needed.

4. A checking account is also known as a demand deposit account.
It is called a demand deposit because you can demand portions of your deposited funds at will.
Only the depositor (you) can write checks on the account.

5. Canceled checks
Canceled checks are those the bank has processed or cleared.
After the bank has cleared a check, the amount is deducted from your account and it can be used as proof of purchase.

6. Responsibilities
Write checks carefully and keep an accurate record of checks written and deposits made.
You must reconcile your account with our bank statements promptly each month.
You must keep canceled checks as proof of purchase or payment and for income tax records.

7. You should always maintain sufficient funds in your account to cover all written checks.
“Insufficient funds”- not enough money is in the account to cover the check
A check that cannot be covered by the funds in your account is called an Overdraft.
You will be charged a certain amount of money if you overdraw your account.

8. Floating a Check
Floating a check is when you realize your account contains insufficient funds, but you write a check anyway.
Floating a check is more difficult in the computer age because processing checks is faster and more efficient.
Purposely overdrawing your account is illegal and can result in fine, imprisonment or both.

9. Opening Your Checking Account
To open an account you must fill out a signature card.
Provides the bank with important information
Official signature to compare with subsequent checks.

10. Example of a Signature Card
Check on dividend
I ( ) hereby agree to the bylaws of SKY CENTRAL BANK and all amendments thereto.
Signature
Social Security Number
Individual ( ) Joint ( ) Trust ( ) Other ( )
Your
Home
Address
ZIP
Father’s Name
Mother’s Name
Name of Spouse
Occupation
Date of Birth

11. Try it yourself
On the blank signature card provided fill out the information as if you were opening a checking account.
Note: you do not have to use you’re real social security number.

12. Example of a Check

13. Check Number
checks are numbered for identification

14. American Bankers Association Number
Top #- location and district of the bank Bottom #- routing the check to the bank

15. Maker’s Preprinted Name & Address
Owner’s name, address & telephone number

16. Date
Fill in the date on which the check is written. Do not postdate checks.

17. The person or company who is receiving the check
Payee
The person or company who is receiving the check

18. The numeric amount of dollars and cents being paid in figure form

19. Written Amount
The amount of dollars and cents written in words. “and” replaces the decimal point.

20. Drawer or Maker
Signature of the person who is writing the check

21. Account Number Bank identification for sorting and routing
Personal checking account number
Preprinted Check Number

22. Memo
A line provided so the maker can write the purpose of the check Does not have to be filled out.

23. Try it Yourself Use the following information: Check Number: 505
Date: Today’s Date
Payee: Morehead State University
Maker: Sign your name
Amount: $ (Numeric and Written)
Memo: Financial Literacy Book

24. Making Deposits
To make a deposit into your checking account you must fill out a deposit slip form.
Example:

25. Insert the date of the transaction

26. Write in the amount of cash

27. Write the ABA # and Check Amount

28. Total cash and checks go in the Subtotal Line

29. If you wish to get cash back fill desired amount in “Less Cash Received Line”

30. If you get cash back you must sign the deposit slip

31. Total Amount Deposited

32. Try it yourself Less Cash Received: $50.00 Sign your name
Use the following information:
Date: Today’s Date
Cash: 25.50
Check:
ABA # $200
Less Cash Received: $50.00
Sign your name