Checking Accounts

Chapter 9

Basics•Check:

▫Written order to bank to pay the amount stated to the person or business named on it.

•Demand deposit: ▫Money may be withdrawn at any time.

Basics•Process:

▫You write a check.▫The payee cashes your check.▫The bank that cashed the check returns it to

your bank.▫The bank withdraws money from your account

and sends it to the bank that cashed the check.▫Your bank then stamps the back of your check,

indicating that it has a check that has cleared your account.

•Canceled Check: a check that has cleared your accounts. Can be used as proof of payment.

Advantages of Checking Account

1. Provides a convenient way to pay bills.

2. Safer than using cash, especially when

making major purchases.

3. Built-in record keeping system that you

can use to track expenses and create

budgets.

4. Gives you access to other bank services,

such as loans, online banking, and 24-

hour access to your money through ATMs.

Opening a Checking Account

•You must fill out and sign a signature

authorization form.

•Provides an official signature that the

bank can compare to the signature you

write on the check.

Parts of Check• Check Number

• ABA Number

• Name and Address

of Maker

• Date

• Payee

• Numeric Amount

• Written Amount

• Signature

• Account and

Routing Numbers

• Memo

Writing Checks

•Always use pen (blue or black).

•Write legibly.

•Sign name the same as on signature

card.

•Avoid mistakes. (VOID)

•Make sure you have adequate funds.

Why Paying Bills Online?

•Safer than sending checks in mail.

•Faster than mailing.

•Convenient

•Saves money for postage and costs of

checks.

Paying Bills Online

Choice #1 Choice #2

• Can register at

website of business to

which you will be

making payments.

• You can authorize

payments.

• Can pay bills from

your own account.

• Register at your

bank’s website.

• Some banks charged

monthly fee.

Making Deposits (use Internet)1. Date of transaction.2. Cash Section: write amount of $ you are depositing3. Checks Section: write amount of check along with

ABA number.4. Total the currency, coin, and check amounts. Write

figure on “subtotal” line.5. If you wish to receive some cash, complete “Less

Cash Received” line6. Complete “Net Deposit”7. If you receive some cash, “Sign Here for Less Cash

Received”8. The teller will give you copy of deposit slip or receipt.

Checkbook Register

• Definition: booklet used to record checking account transactions.

Reconciling Your Account

• Bank Reconciliation: the process of matching your checkbook register with the bank statement

Endorsing Checks1. Blank Endorsement

Only the signature of the payee

2. Special Endorsement• Transfers the right to cash the check to

someone else.• “Pay to the order of…”

3. Restrictive Endorsement• Limits to the use of the check.• “For deposit only…”

Types of Checking Accounts1. Joint Accounts

Opened by 2 or more people. Any person who signs the account has the

right to the amount deposits.

2. Interest Bearing Accounts• Can earn interest.• Must maintain a minimum balance

Banking Services

•Money Orders

•Debit Cards

•Bank Credit Cards

•Overdraft

Protection

•ATMs

•Online and

Telephone Banking

•Stop Payment Orders

•Safety Deposit Boxes

•Loans and Trusts

•Notary Public

•Financial Services

Banking Fees

•Monthly Service Fees

•Overdraft Fees

•NSF check charges

•ATM fees

•Safe deposit box fees