Checking and Banking9.27.13

Unit Goals Write checks Maintain check registers Reconcile bank statements

Quick Facts… More than ___% of teens have a savings

account ____% of teens 16-17 have a checking

account. ____% of those 18-19 have one. Only ____% of teens 16-17 have a debit

card. ____% of those 18-19 have one. ____% of teens 16-19 have their own

credit card

Checking Account Checking Account: Account that

allows depositors to write checks and make payments

Check: Written order to a bank to pay the state amount to the person/ business (payee) named on it

Responsibilities Write checks carefully Keep accurate records of checks written

and deposits made Verify accuracy of bank statement you

receive each month Maintain sufficient funds in your account

to cover all written checks

Advantages Convenient way to pay bills Writing check is safer than using cash 24 hour access to ATMs, Online banking

Sample Check

Routing Account Check

A Check’s Process1. Payee cashes check2. Bank that cashed check returns it to

your bank3. Your bank withdraws money from

your account CLEAR Stamp

Cancelled Checks Check that bears the bank’s stamp,

indicating it has cleared

Overdraft Check written for more money than your

account contains Check is considered “bounced” Bank fee ($30) Bad check list

WI Bad Check Law Class A Misdemeanor

Repay amount of check in full as well as any legal fees incurred

Up to 1 year jail time and $1000 in fines

Checkbook Register Where you record all checking account

transactions Deposits Written checks ATM withdrawals Transfers

Checkbook Register Practice 9/1/12 Deposit $100.00 to open your

account. 9/2/12 Transfer $25.00 from your savings

account into your checking account. 9/3/12 Write check #101 to Sprint for

$47.00. Your account at Sprint is #30334.

9/4/12 Your paycheck is deposited for $250.00.

9/5/12 You buy lunch for $15.00 using your debit card.

9/6/12 Write check #102 to Holmen High School for a sweatshirt you bought for

$25.00. 9/7/12 You deposit a check for $20.00

from your grandma.

Endorsing Checks Check can’t be cashed until it is endorsed

(signed) No more than 1.5 inches from top edge of

the back of the check 3 types

Blank Special Restrictive

Blank Endorsement Signature of payee written exactly as

the name on the front Only sign at the bank!

Restrictive Endorsement Restricts/ limits check use

“for deposit only” Then sign Recommended for mailing checks!

Special Endorsement Sign check over to someone else

“Pay to the order of ____________” Then sign it

Deposit Slip Form you fill out when depositing any or

all of the 3 c’s (cash, check, coin) into your checking account

3 c’s- cash received= net deposit

Reconciliation Reconciliation- match your check

register balance with your bank statement balance.

Process of balancing your checkbook register with the bank statement

Reconciliation Outstanding Checks/ Deposits

Checks or deposits that you have recorded in your check register yet are not shown on your latest bank statement

Formula for ReconcilingEnding Bal. of Bank Statement

+Outstanding deposits

- Outstanding checks_____________________________Adjusted balance on Bank Statement

Ending Bal. of Checkbook Register

+ Interest from bank statement- Service charges/ fees___________________________Adjusted ending balance on checkbook register

Reconciliation Practice Ending bank statement bal. $1000 Ending check register bal. $1200 Outstanding deposits $400 Outstanding checks $200 Interest $5 Service charges $5