Checking Account Workbook By:
Opening a checking account: One of the safest and easiest ways to manage your money is through a checking account. When you open a checking account make sure you have the proper forms of identification, such as driver s license and social security card. By having a checking account you can avoid carrying large amounts of cash by simply writing a check or using your debit card. Deposits or credits to your account are when you add to the current balance, some examples of deposits are cash, check and direct deposits. Withdrawals and debits are when you take money out of your account by using an ATM, debit card or writing a check. Many stores have technology to directly withdrawal funds from your account when you write a check or use your debit card. Some stores send through an authorization which places a hold on the funds until the withdrawal from the account is complete. Most financial institutions are on real time, so there is not a delay but if you mail in a check or use bill pay online to pay bills it might take a few days to be deducted from your account. Account Types: Checking accounts, simple right? WRONG, there are so many different types of checking accounts how do you know what type to get? Some things to consider when choosing a checking account: Minimum Balance Restricted amount of withdrawals Monthly Service Fees Dividend or interest rate Determine how often you will use the account, if you will use online banking, mobile banking, bill pay, debit cards, ATM and direct deposit. Many financial institutions may charge you for these additional services so if you know what products and services you will use it will make choosing a checking account easier. Gather information from three different financial institutions, including at least one bank and one credit union. Compare and analyze your results.
How does this all work??? Deposit/Credit Let s start with how we make a deposit. Now that you have a checking account that fits your needs you need to put money in it. The most common way to deposit money into your checking account is with cash, checks or direct deposits. Cash is usually the easiest and safest. If you deposit a check the financial institution may need to place a hold on the check depending on the type of check and amount. For example a personal check that is written for a large amount could be placed on a hold by your financial institution for the maximum amount of days allowed by Regulation CC. Placing a hold on the account for the check presented does not guarantee payment of the check. You are responsible for repayment of the item if returned. You can also set up a direct deposit from your employer so your payroll with automatically be deposited into your account. When you make a deposit you should fill out a deposit slip so the person processing your transaction knows exactly what you are expecting them to do. Checking Account Deposit Ticket Deposits may not be available for immediate withdrawal. Date: Cash Checks Dollar Cents Sign on line above only if cash is received. 275979364 1234567 Total Deposit Less Cash Net Deposit Endorsing a check The reason you endorse a check is to either deposit it or to sign it over to someone else. When endorsing a check, you turn the check over, and sign it on the back of the check. You should sign your name exactly the same way it is written on the front of the check. Once you turn your check over, place it so it faces up, like this: Wait to endorse the check until you get to your financial institution. If that is not possible write for deposit only and below that your signature.
Withdrawal/Debits Now that you have money in your checking account how can you get it out? You can do a withdrawal from the financial institution or Automated Teller Machine (ATM), write a check or use a debit card at a merchant as a Point of Sale Transaction. ATM s allows you to do simple transactions such as depositing or withdrawing money from your account. ATM s are easy to use but you have to be aware of fees. The ATM service provider may charge you a fee along with your financial institution so it s important to find out how to avoid these fees when choosing a financial institution and type of account. When using an ATM, be aware of your surroundings, make sure no one is watching you put your pin number in and be sure to take your receipts and money. If the ATM looks suspicious or not safe use a different machine. Writing a check is another way you can get money out of your account. By writing a check you are giving your financial institution a command to pay that amount of money to the person you wrote it to from your account. When writing a check be sure to : Write clearly and neatly Always use ink Sign your name consistently the same Do not use nicknames when writing or signing a check If you make a mistake VOID the check by writing VOID large on the check and shred Draw a line after the name of the Payee & written amount. This is done to prevent alterations, such as adding a Payee or an amount. This is a sample of a properly written check: Steven Jacobson 101 111 E. Main ST Date: September 1, 2011 Stevens Point, WI 54482 152.34 Order of Joe s Construction Company------------------------- One Hundred Fifty Two and 34/100-----------------------------------------------Dollars For: Work on Roof Steven Jacobson 275979364 1234567 101
Debit Card transactions also known as Point of Sale Transactions will come directly out of your checking account unlike credit cards that you get a bill for later. Typically debit card transactions have a daily limit so if you are making a large purchase, the transaction may not go through when you try to use your card. There are two ways to process a debit card at a merchant, either as a debit or credit. What is the difference? A debit card can be processed as a debit, you are required to enter your Personal Identification Number (PIN) for each transaction. You are potentially less protected using a PIN than if you process your debit card as a credit. Processing a debit card as a credit will require you to sign for the transaction. For the store the difference between debit and credit is typically a fee. Some companies may be charged less by the companies which process their card transactions for running cards as debits, so if you are visiting a small, locally owned business, you may want to consider selecting the debit option as a courtesy. Most large companies do not give you the choice on the screen but ask the cashier and they will help you process the transaction as a credit. Make sure you are protected for fraudulent activity. Check with each financial institution on their policies and procedures.
Keeping Record- You should keep a record of every transaction you make, whether that is a deposit or withdrawal. Online banking has helped people balance their register but it is important to keep a written record. Check Description of Date Number transaction Debits(-) Credits (+) Balance 101 9/1 Joe s Construction Co. 152.34-152.34 347.66 ATM 9/5 Cash 40.00-40.00 307.66 Debit card 9/5 Abercrombie- clothes 35.76-35.76 271.90 9/7 Payday 265.49 265.49 537.39 102 9/9 Element-phone bill 79.55-79.55 457.84-403.07 Debit Card 9/10 Best Buy-new ipod 403.07 54.77 Debit Card 9/10 The Store- Gas 40.00-40.00 14.77 What if Joe doesn t cash his check until 9/20 and your balance online says you have 167.11? This is why it is important to write down all your transactions!!! Say you looked online and saw you have 167.11 so you pay your car insurance with your billpay online in the amount of 125.90. You balance online now says 41.21 and Joe now cashes the check, your balance now is -111.13. Balance your monthly statement when you receive it in the mail or online as an E-Statement. Any discrepancy needs to be reported within 60 days of receipt of the statement. If you need assistance contact your financial institution. Charges may apply. Now, let s practice
January 10 Jan Open checking account and deposit paycheck of 453.91 16 Jan Write Check 101 for 145.27 to American Family Insurance for Car 17 Jan ATM withdrawal of 40.00 Cash 18 Jan Debit Card 42.00 BP for Gas 19 Jan Debit Card- 17.46 at Hilltop restaurant for Dinner 23 Jan Write Check 102 for 79.14 to Wisconsin Public Services 23 Jan Write check 103 for 65.87 to Charter Communications 25 Jan Debit Card- 22.25 at Target for new shoes 26 Jan Direct Deposit paycheck of 487.36 29 Jan Write Check 104 for 80.67 to Element Mobile 31 Jan Reconcile your account statement for the month of January (total should be 448.61 before any service fees you may inquire due to the account type.) February 1 Feb Debit Card Purchase of 7.54 at Polito s Pizza 1 Feb Debit Card Purchase of 45.00 at Kwik Trip for Gas 2 Feb Write Check 105 to BEST Apartments, LLC for 250.00 for Rent 5 Feb Debit Card Purchase of 69.12 at Copps Food Center 6 Feb ATM withdrawal 40.00 9 Feb Direct Deposit paycheck of 476.93 10 Feb Online Billpay- 35.00 to Kohl s Credit Card 10 Feb Online Billpay- 102.50 to Central City for Auto Loan 10 Feb Transfer to Savings 50.00 11 Feb Debit Card Purchase of 6.37 at El Mezcal 12 Feb Debit Card Purchase of 38.00 at Shell Gas Station 13 Feb Debit Card Purchase of 57.92 at Hollister 15 Feb ATM withdrawal 60.00 22 Feb Debit Card Purchase of 47.01 at BP Gas Station 23 Feb Direct Deposit of Paycheck 438.08 23 Feb Write Check 106 for 72.90 to Wisconsin Public Services 23 Feb Write check 107 for 65.87 to Charter Communications
25 Feb Debit Card Purchase of 26.83 at Chili s Restaurant 28 Feb Write Check 108 for 80.67 to Element Mobile 28 Feb Reconcile your account statement for the month of February (total should be 308.89 before any service fees you may inquire due to the account type.) March 1 March Write Check 109 for 250.00 to BEST Apartments, LLC 3 March ATM withdrawal for 40.00 8 March Direct Deposit Paycheck 461.28 8 March Debit Card Purchase of 49.00 at Kwik Trip for Gas 9 March Telephone transfer 50.00 to Savings account 10 March Online Billpay- 102.50 to Central City for Auto Loan 11 March ATM withdrawal for 60 15 March Debit Card Purchase of 54.38 at Festival Foods 16 March Deposit 120.00 Birthday money 20 March Debit Card Purchase of 45.00 Fleet Farm for Gas 22 March Direct Deposit Paycheck 486.03 24 March Write Check 110 for 70.81 to Wisconsin Public Services 24 March Write Check 111 for 65.87 to Charter Communications 26 March Write Check 112 for 80.67 to Element Mobile 28 March Debit Card Purchase of 147.45 at Best Buy for new speakers 28 March Debit Card Purchase of 57.87 at Mickey s Restaurant 30 March Reconcile your account statement for the month of February (total should be 302.65 before any service fees you may inquire due to the account type.)
VOID _ 101 Date Dollars For: 275979364 1234567 101 VOID 102 Date Dollars For 275979364 1234567 102 VOID 103 Date Dollars For 275979364 1234567 103
VOID 104 Date: Dollars For: 275979364 1234567 104 VOID 105 Date Dollars For 275979364 1234567 105 VOID 106 Date Dollars For 275979364 1234567 106
VOID 107 Date Dollars For: 275979364 1234567 107 VOID 108 Date Dollars For 275979364 1234567 108 VOID 109 Date Dollars For 275979364 1234567 109
VOID _ 110 Date Dollars For: 275979364 1234567 110 VOID 111 Date Dollars For 275979364 1234567 111 VOID 112 Date Dollars For 275979364 1234567 112
Name: Check Number Date Description of transaction Debits( ) Credits (+) Balance
Name: Check Number Date Description of transaction Debits( ) Credits (+) Balance
Name: Check Number Date Description of transaction Debits( ) Credits (+) Balance
Member ID: 1234567 Statement Date 1/31/2011 1 of 1 Account Balances at a Glance: Checking 529.28 Savings 0.00 Used Car Loan 6,497.77 Post Date Amount Balance Description 1-10 453.91 453.91 Deposit- Open Account 1-17 -40.00 413.91 ATM Withdrawal located at 3101 Hoover Rd. 1-18 -42.00 371.91 Point of Sale Withdrawal- BP 1-19 -17.46 354.45 Point of Sale Withdrawal- Hilltop 1-21 -145.27 209.18 Check 101 1-25 -22.25 186.93 Point of Sale Withdrawal- Target 1-26 487.36 674.29 Direct Deposit- payroll 1-27 -65.87 608.42 Check 103 1-28 -79.14 529.28 Check 102 1-31 529.28 Ending Balance
Member ID: 1234567 Statement Date 2/28/2011 1 of 1 Account Balances at a Glance: Checking 389.56 Savings 50.00 Used Car Loan 6,395.27 Post Date Amount Balance Description 2-1 -7.54 521.74 Point of Sale Withdrawal- Polito's Pizzaria 2-1 -45.00 476.74 Point of Sale Withdrawal- Kwik Trip 2-2 -80.67 396.07 Check 104 2-5 -69.12 326.95 Point of Sale Withdrawal- Copps Food Center 2-6 -250.00 76.95 Check 105 2-6 -40.00 36.95 ATM Withdrawal located at SPASH 2-9 476.93 513.88 Direct Deposit-Payroll 2-10 -35.00 478.88 Online Billpay- Kohls Credit Card 2-10 -102.50 376.38 Online Billpay- Central City Credit Union Auto Loan 2-10 -50.00 326.38 Online Transfer to saving account 2-11 -6.37 320.01 Point of Sale Withdrawal-ElMezcal 2-12 -38.00 282.01 Point of Sale Withdrawal- Shell Gas Station 2-13 -57.92 224.09 Point of Sale Withdrawal- Hollister 2-15 -60.00 164.09 ATM Withdrawal located at SPASH 2-22 -47.01 117.08 Point of Sale Withdrawal- BP 2-23 438.08 555.16 Direct Deposit-Payroll 2-25 -26.83 528.33 Point of Sale Withdrawal- Chili's Restaurant 2-26 -72.90 455.43 Check 106 2-26 -65.87 389.56 Check 107 2-28 389.56 Ending Balance
Member ID: 1234567 Statement Date 3/31/2011 1 of 1 Account Balances at a Glance: Checking 383.32 Savings 100.00 Used Car Loan 6,292.27 Post Date Amount Balance Description 3-2 -80.67 308.89 Check 108 3-3 -40.00 268.89 ATM-Withdrawal located at Spash 3-5 -250.00 18.89 Check 109 3-8 461.28 480.17 Direct Deposit Payroll 3-8 -49.00 431.17 Point of Sale Withdrawal- Kwik Trip 3-9 -50.00 381.17 Transfer- Telephone to Savings Account 3-10 -102.50 278.67 Online Billpay- Central City for Auto Loan 3-11 -60.00 218.67 ATM-Withdrawal located at Spash 3-15 -54.38 164.29 Point of Sale Withdrawal- Festival Foods 3-16 120.00 284.29 Cash Deposit 3-20 -45.00 239.29 Point of Sale Withdrawal- Fleet Farm 3-22 486.03 725.32 Direct Deposit Payroll 3-27 -70.81 654.51 Check 110 3-28 -65.87 588.64 Check 111 3-28 -147.45 441.19 Point of Sale Withdrawal- Best Buy 3-28 -57.87 383.32 Point of Sale Withdrawal- Mickey's Restaurant 3-31 383.32 Ending Balance