Introductions Instructor and student introductions Module overview 1 2 Your name Student Introductions Your expectations, questions, and concerns about checking accounts Purpose will teach you how to use a checking account responsibly. 3 4 Objectives By the end of this course, you will be able to: State the benefits of using a checking account. Determine which checking account is best for you. Identify the steps involved in opening a checking account. Objectives (Continued) Add and withdraw money from a checking account. Reconcile a check register with a bank statement. 5 6 1
Agenda and Ground Rules 2 hours long Two 10-minute breaks Training methods Class participation Checking Accounts A checking account lets you write checks and use a debit card to: Pay bills. Make purchases. 7 8 Benefits of Checking Accounts Convenience Cost Better money management Safety Convenience Checking accounts: Give you quick and easy access to your money. Let you direct-deposit payroll and other checks. Eliminate the need to carry a lot of cash. 9 10 Cost Using a checking account is usually less expensive than using other services to cash checks or buy money orders. Better Money Management Having a checking account lets you: Keep a record of transactions. Build a positive relationship with your bank. 11 12 2
Safety Having a checking account: Is safer than carrying large amounts of cash. Protects your checks and check card if they are lost or stolen. Means your money is insured up to the maximum amount allowed by law. How to Find the Right Checking Account Get recommendations. Answer the questions on the Determining Your Checking Account Needs Worksheet. 13 14 Fee Schedule Some common bank fees include: Monthly service fee Minimum balance fee Automated Teller Machine (ATM) user fee Overdraft fee Stop payment fee When a Checking Account Isn t Right for You If you: Don t write many checks. Tend to bounce checks. Can t find a checking account for which you can maintain the minimum balance. 15 16 Practice Exercise: Choosing the Right Checking Account Instructions: Read each scenario carefully. Indicate whether or not David should get a checking account. Be prepared to explain your answer. Then read and answer the questions about fees a bank might charge. Types of Checking Accounts Free/low-cost checking Electronic/ATM checking Regular checking Interest checking 17 18 3
Documents Needed to Open a Checking Account Photo ID Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) A deposit Account Verification The bank or credit union reviews your checking account history to make sure that: You will be a responsible customer. No one is trying to steal your identity to open an account. 19 20 Signature Card The document that identifies and contains the signature of the owner of the account. Two Ways to Use Money in Your Checking Account Write a check. Use electronic banking. 21 22 Steps to Writing a Check Sample Check Make sure you have enough money in your account. Complete the blank spaces on the check. Record the transaction in your check register. 2 7 YOUR NAME YOUR ADDRESS YOUR PHONE NUMBER PAY TO THE ORDER OF FINANCIAL INSTITUTION Your City, State, Zip Code 1 3 Date: 8 9 105 00-6879 770 Dollars Memo :00000000 : 0000 0000 0 000 0 0.: 4 5 6 11 10 23 24 4
Back of the Check Sample Checks ENDORSE HERE YOUR NAME YOUR ADDRESS YOUR PHONE NUMBER PAY TO THE ORDER OF FINANCIAL INSTITUTION Your City, State, Zip Code Date: 105 00-6879 770 Dollars DO NOT WRITE, STAMP OR SIGN BELOW THIS LINE RESERVED FOR FINANCIAL INSTITUTION USE * Memo :00000000 : 0000 0000 0 000 0 0.: YOUR NAME 105 YOUR ADDRESS YOUR PHONE NUMBER Date: 2/26/20XX 00-6879 770 PAY TO THE Coffee Mart 19.75 ORDER OF Nineteen and 75/100 Dollars FINANCIAL INSTITUTION Your City, State, Zip Code coffeemaker Memo :00000000 : 0000 0000 0 000 0 0.: Your signature 25 26 Electronic Banking Electronic banking uses computers to move money into and from your account. It includes: Debit card transactions Electronic bill pay ATM transactions Debit Card A debit card lets you: Deposit cash into and withdraw it from your checking account. Make purchases at retail locations. BE CAREFUL! The money is immediately taken out of your account. 27 28 Electronic Bill Pay A service that automatically takes money out of your account to pay your bills. You don t have to pay for postage. You don t have to worry about late payments. You can also use bill pay to make payments to businesses to which you owe money. Automated Teller Machine (ATM) 2 4 3 1 29 30 5
DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL SIGN HERE IF CASH RECEIVED FROM DEPOSIT 1 DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL SIGN HERE IF CASH RECEIVED FROM DEPOSIT 2 3 4 5 6 CURRENCY COIN OR TOTAL FROM REVERSE SUBTOTAL LESS CASH RECEIVED NET DEPOSIT CURRENCY COIN OR TOTAL FROM REVERSE SUBTOTAL LESS CASH RECEIVED NET DEPOSIT Four Ways to Add Money to Your Checking Account Cash or check deposit using the teller service ATM deposit Deposit by mail Direct deposit DEPOSIT TICKET Sample Deposit Slip Your Name Your Address Your Phone Number DATE 3/22/20XX YOUR FINANCIAL INSTITUTION YOUR CITY, STATE Zip Code DO NOT USE FOR AUTOMATIC PAYMENT OR CHECK TRANSACTIONS :00000000 : 00000 00000.: C H E C K S 31 32 Sign the Back of the Check ENDORSE HERE DO NOT WRITE, STAMP OR SIGN BELOW THIS LINE RESERVED FOR FINANCIAL INSTITUTION USE * Sample Deposit Slip Front and Back DEPOSIT TICKET Your Name Your Address Your Phone Number DATE YOUR FINANCIAL INSTITUTION YOUR CITY, STATE Zip Code DO NOT USE FOR AUTOMATIC PAYMENT OR CHECK TRANSACTIONS :00000000 : 00000 00000.: C H E C K S Check Checks List singly Dollars Cents 10 11 12 13 14 15 16 TOTAL ENTER TOTAL ON THE FRONT OF THIS TICKET 7 8 9 33 34 ATM Deposits Similar to making an ATM withdrawal. Use the special deposit envelope. Remember to get a receipt. Mail Deposits Include a deposit slip with the check. NEVER send cash through the mail. 35 36 6
Direct Deposit Checks are deposited directly into your checking account. Your money is available immediately. It s the safest way to receive your money. Signing up is easy at your financial institution. Keeping an Accurate Record of Checking Account Activity Record all transactions. Record maintenance fees, interest, and other bank charges. Review the monthly checking account statement. Reconcile your check register with your monthly checking account statement. 37 38 Checking Account Statement A record of all transactions made during the preceding month, including: Cashed checks All withdrawals and deposits Debit card purchases Fees Reconciling Your Checking Account Finding the reasons for the difference between your checkbook register balance and the checking account statement balance caused by: Transactions on the bank statement that weren t recorded in the check register. Transactions recorded in your check register that were made too late to appear on the bank statement. 39 40 Checking Account Reconciliation Form Bad or NSF Check CHECKS OUTSTANDING - NOT CHARGED TO ACCOUNT Check Check Amount Number Bank balance shown on this statement A check you write when there isn t enough money in your checking account to cover it. Subtract withdrawals outstanding Total Add deposits outstanding Balance Total * This balance should agree with balance in your check register. 41 42 7
Consequences of Writing Bad Checks Bad check fees Negative activity reported Bank closes your account Civil and/or criminal prosecution Merchants may not accept your checks Your credit may be impacted 43 8