Money ManagementChecking Accounts & Banking Services

By: Talia Spain

Checking Accounts Checking account – check – demand

deposit Cleared – canceled check – substitute

check Convenient way to pay bills Check is often safer than cash Built-in record system to track expenses Bank services – loans, online banking, and

24-hour ATM’s Electronic check conversion – overdraft –

NSF – floating a check

Opening A Checking Account Signature Authorization Form – code word

Parts of A CheckCheck Number

ABA Number

Name & Address

Date

PayeeNumeric AmountWritten

Amount

Signature

Account & Routing Number

Memo

Always use pen Write legibly Sign your name as it appears preprinted on the signature card Avoid mistakes – VOID if you do Be certain you have correct funds to cover each check you

write

Paying Bills Online Safer, convenient and, cheaper Two forms of payment

Routing number and account number – authorize payments each month or allow automatic payments

Use online banking – PIN Some banks have limits or fees.

Making Deposits & Endorsement Deposit slip

Date Amount of currency and coins If checks – write amount of each check Total – “Subtotal” line Receive cash – “Less Cash Received” line If cash received – “Net Deposit” line “Sign here for less cash in Teller’s presence” Received a copy

Bank endorsement – misspelled Special endorsement Restrictive endorsement – cannot be found if

lost

Using A Checkbook Register Checkbook register – booklet used to

record checking account transactions

Bank reconciliation – process of matching your checkbook register with the bank statement

Types Of Accounts

Joint account – “survivorship account” Special account – low activity bank

accounts, low fees Standard account – small or no monthly

service fee Interest-bearing account – must stay at

or above a minimum balance – “money market account”

Share accounts – least expensive and most convenient

KEY TERMS REVIEWMatch the terms with the definitions.

Some terms may not be used. 1. A type of bank account from which

funds may be withdrawn at any time 2. A booklet used to record checking

account transactions 3. An endorsement that transfers the

right to cash a check to someone else 4. Writing a check and hoping to

cover it with a deposit before it clears 5. A check that has cleared your

account 6. A written order to a bank to pay the

amount stated to the person or business named on it

7. A check written for more money than your account contains

8. An endorsement that limits the use of a check

9. The process of matching your checkbook register with the bank statement

CHECK YOUR UNDERSTANDING 10. What is an overdraft? Why is it

important to avoid it? How can keeping a checkbook register up to date help?

11. Name five types of checking accounts available at many banks.

Section Assessment

a. bank reconciliationb. blank endorsementc. canceled checkd. checke. checkbook registerf. demand depositg. floating a checkh. overdrafti. restrictiveendorsementj. special endorsement

Banking Services & Fees Full-service bank

Savings Checking Credit cards Safe deposit boxes Loans ATM Online banking Telephone banking Certified checks Cashier’s check Money orders Debit cards FDIC (Federal Deposit Insurance Corporation)

Guaranteed-Payment Checks

Certified check – bank fee $2.50 - $5.00 Cashier’s check – bank draft Traveler’s check – safer than other

check types Money orders – do not have a checking

account or do not want to use case Debit card – no credit extended Bank credit cards – full-service bank –

annual fee & interest on payments

Overdraft Protection

$100 - $1,000 – overdraft protection – “loan” with high interest rates or flat fee

Automated Teller Machines

ATM – cash withdraws with a debit card – PIN

Online & Telephone Banking

Computer or telephone access – transfer – pay bills – current balance – cleared checks – deposits entered – 24/7 access

Electronic funds transfer – EFT – transfer from account to account – no delay

Stop-payment orders – lost or stolen checks – fee – over 6 months old cannot be cashed

Safe Deposit Boxes

Safe deposit box – store valuables – annual fees $50 - $150 or more – two keys – signature

Loans and trusts – trustee – property management – “special agreement”

Notary public – verifies a person’s identity

Financial services – saving and selling bonds – brokerage service – minimum purchase of $1,000 is required

KEY TERMS REVIEWMatch the terms with the definitions.

1. Check forms in specific denominations that are used instead of cash while traveling

2. A request that the bank not honor a specific check

3. A plastic card that deducts money from a checking account almost immediately to pay for purchases

4. A personal check that the bank guarantees to be good

5. A computer-based system that moves money from one account to another without writing a check or using cash

6. A check written by a bank on its own funds

7. A place at your bank available to store valuable items or documents

8. A bank service that covers checks even if you have insufficient funds in your checking account

CHECK YOUR UNDERSTANDING 9. List five banking services that are

found at full-service banks. 10. List bank fees charged to

customers and to noncustomers for services provided.

Section Assessment

a. cashier’s checkb. certified checkc. debit cardd. electronic fundstransfere. overdraft protectionf. safe deposit boxg. stop-payment orderh. traveler’s checks