Purpose of a Checking Account- Money is deposited into an account and checks or drafts can be written to withdraw money from the account.

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1 CHAPTER 9 CHECKING ACCOUNTS AND BANKING SERVICES Purpose of a Checking Account- Money is deposited into an account and checks or drafts can be written to withdraw money from the account. Demand Deposit- you can demand portions of your deposited funds at will. Only you can write a check. Usually a fee for checking services. Require that a minimum balance be kept in the account. $100. Checks are usually safer, convenient, easy to pay bills or order merchandise. Proof of purchase. Canceled checks are those the bank has processed or cleared. Most have record keeping system to keep track of money spent and received. Checking account customers, have access to other banking services, loans, bank cards, ATM, free traveler s checks. Some give out free merchandise when you open an account. 1. Keep accurate records of checks written and deposits made 2. Reconcile your account with your bank statement. 3. Canceled checks proof of purchase and tax record info: 4. Maintain sufficient funds or your account receives an Overdraft (Bounced) (Rubber Check) NSF charged a fee (15-35) dollars Floating a check writing a check when there are insufficient funds, but writing a check hoping to make a deposit before the check is cashed. (Illegal in most states) Opening a Checking Account Must sign a signature card (18 years of age) Parent can open an account for their children. If a joint account, both signatures must be on the card for the bank to check. Parts of a Check A check consists of 10 parts: Check Number ABA Number Maker s Preprinted Name and Address

2 Date Payee Numeric Amount Written Amount Drawer or Maker Account Number Memo Writing Checks Always use pen, dark, write legibly. Keep numbers clear and distinct. Sign your name exactly as it appears on the check signature card Avoid mistakes. You should Void/cancel the check and write a new one. Make sure adequate funds have been deposited in your account to cover the check. Making Deposits Complete a form each time you deposit money to the account. Insert the date of the transaction Write the amount of currency and coins to be deposited. Any checks are being deposited, write the amount of each check If you wish to receive cash, you should fill in the desired amount Less Cash Received. Keeping one copy of deposit slip as proof of the amount of deposit. They do make mistakes. Count the currency and coins, make sure all checks are endorsed.

3 Using a Checkbook Register Record of deposits and withdrawals from a checking account. Pg 211. Reconciling your checking account The process of matching your checkbook register with the bank statement. Found on the back of your bank statement. Write the ending balance as shown on the front of the statement. List deposits made that do not appear on the bank statement. Add the ending bank balance to the deposits, but not entered. List all checks you wrote or other withdrawals you made that do not appear on the statement. Subtract the total checks outstanding for the subtotal. This should be the same balance as the checkbook register. If unsuccessful, check addition and subtraction, services chgs. Contact bank is all else fails. Endorsements Can not cash a check until it has been endorsed. Joint endorsement more than one person is on a check. Three types: Blank endorsement- signature of payee written at the top back Special endorsement-payee signs over a check to a third person. pg Restrictive end. restricts or limits the use of a check. For Deposit Only can only deposited by that person. If lost can not be cashed by the finder. Types of Checking Accounts Free checking if you maintain a certain amount of money. Special accounts, interest bearing account and share draft account. Free checking to people over fifty. (Free checks) (Nonprofit groups) Free when opening a new branch. Joint Accounts: (Survivorship account) One person using the account dies, the other then becomes sole owner of the funds. (and, or) (and) both owners would require signatures.

4 Special Accounts: $3.00 per month, plus 15 cents per checks over the amount agreed upon. Standard Accounts: set service fee between $5-12 no check fee. traveler s checks, teller machine card, free safe-deposit box. Reduced interest rates on credit card balances, to customers with checking, savings and other accounts. Interest-Bearing Accounts- Interest checking accounts. Interest is paid monthly with $500 or more in the account. Share Draft Accounts- Credit unions offer checking accounts with low daily balance requirements and no service fees for members. Banking Services: Certified Checks Cashier s Checks Money Orders Debit Cards Safe-Deposit Boxes Loans and Trusts Discount Brokerage Services Bank Credit Cards Stop Payment Orders Bank Fees

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