Slide 3 Introduction to Checking Accounts A check is a
handwritten or computer generated order specifying the amount of
money to be paid and the name of the person or company who should
receive the funds 5-1 Checking Accounts
Slide 4
Introduction Checking Accounts Checking account Is a demand
deposit in a bank or other financial institution Provides a safe
place to keep money Provides easy access to the money Slide 4
Slide 5
Slide 5 Federal Deposit Insurance Corporation Also known as the
FDIC The FDIC insures each account in a federally chartered bank up
to $250,000. Savings accounts, Checking accounts, Money Market
accounts, and CDs are all covered 5-1 Checking Accounts
Slide 6
Slide 6 Opening an Account To open an account, you will need to
Provide personal data and identification Complete a signature card
Deposit money Some banks charge monthly fees or a fee for each
check written 5-1 Checking Accounts
Slide 7
Signature Card Slide 7
Slide 8
What is a Checking Account? Common financial service used by
many consumers Funds are easily accessed Check ATM (automated
teller machine) Debit card Telephone Internet Services and fees
vary depending upon the financial institution
Slide 9
Why Do People Use Checking Accounts? Reduces the need to carry
large amounts of cash Convenience useful for paying bills Spending
Plan Tool Keeps a written record of where money is spent Safety
using checks is safer than carrying cash
https://www.youtube.com/watch?v=b8kh2
Qx5LV0https://www.youtube.com/watch?v=b8kh2 Qx5LV0
Slide 10
Checking Account Activity Compare and contrast 2 checking
accounts Name of bank/website? Students checking? Is there a
minimum balance? Is there a required balance or fee if below. Is a
debit card included? Are checks free? What is the address of the
closest branch to your house? Would you use this bank? Why? Slide
10
Slide 11
Comparing Checking Accounts location branch offices; hours of
operation; availability of ATMs fees monthly fees; per check fees;
printing of checks; balance inquiry fees; ATM fees other charges
overdraft charge; stop-payment fees; certified check fees Slide
11
Slide 12
Comparing Checking Accounts continued Interest - rate earned;
minimum deposit to earn interest; compounding method; fee charged
for falling below necessary balance Restrictions -minimum balance;
deposit insurance; holding period for deposited checks special
features- direct deposit; automatic payments; overdraft protection;
online banking; discounts or free checking for students, seniors,
or employees of certain companies Slide 12
Slide 13
Choosing a checking account 1.Read the fine print 2.Keep a
minimum account balance- the amount of money you must keep in the
account to avoid service charges, qualify for special service or
earn interest on the checking account 3.Interest bearing account-
an account that earns interest 4.Hidden fees/high minimum balances
5.Perks you can get like free checks and easy-to-use mobile phone
apps, email statements and overdraft protections 6.Special starter
accounts for students Slide 13
Slide 14
Slide 14 Writing Checks Use ink to write the data on checks The
current date The name of the payee The amount in numbers and words
Your signature A note on the Memo line If you make a mistake Write
VOID on the check and in the register Begin a new check and make
sure to record it in the check register. 5-1 Checking Accounts
Slide 15
What is a Check? Piece of paper pre-printed with the account
holders: Name Address Financial institution Identification numbers
Used at the time of purchase as the form of payment
Slide 16
H
Slide 17
Writing a check teens lesson 6 - slide 6-Fb 20
Slide 18
Writing a check 1. Date Enter the date on which you are writing
the check. 2. Payee- Enter the name of the person or the company
you are going to give the check to. 3.Amount of check in numerals
Enter the amount of the check, in numbers. Dont leave any space
between the pre-printed dollar symbol ($) and the numbers
indicating the amount of the check; there should be no room for
someone to add in extra numbers. 4. Amount of check in words Enter
the amount of the check in words. Start writing at the far left
side of the line. Follow the dollar amount by the word and, then
write the amount of cents over the number 100. Draw a line from the
end of the 100 to the end of the line. teens lesson 6 - slide
6-Fb
Slide 19
Writing a check (continued) 5. Name Your personal information
is printed here. Never list your Social Security number on your
printed check. 6. Signature Sign your check exactly the way you
signed your name on the signature card you filled out when you
opened your account. 7. Memo Use this space to note why you wrote
the check. If you are paying a bill, this is a good place to put
information requested by the company. 8. Identification numbers
These numbers are used to identify the bank, your account number,
and the check number. They are printed in a special magnetic ink
that machines can read. teens lesson 6 - slide 6-Fb
Slide 20
Slide 20 Sample Check 5-1 Checking Accounts
http://www.themint.org/teens/spending.html What is the legal tender
amount on a check?
Slide 21
Slide 21 Endorsements Endorse checks to be deposited 5-1
Checking Accounts
Slide 22
Endorsing a check teens lesson 6 - slide 6-E blank endorsement
Anyone can cash check restrictive endorsement More secure than
blank endorsement special (or full) endorsement Transfer check to
another party
Slide 23
Slide 23 Making Deposits Complete a deposit slip, including
Current date Amount of cash (bills and coins) Check numbers and
amounts Total amount of cash and checks Cash amount received, if
any, and your signature Net deposit amount Record your deposit in
the check register 5-1 Checking Accounts
Slide 24
Front of Deposit Slip Slide 24
Slide 25
Completing a Deposit Slip Checks If more checks are being
deposited than number of spaces on the front, use the back List
each check Add the total, enter it on the front
Slide 26
Back of Deposit Slip Slide 26
Slide 27
Make a Deposit Slide 27 1. Write the date of the deposit in
this field. 2. If you are depositing currency (paper bills), write
the total amount here. 3. If you are depositing coins, write the
total amount here. 4. If you are depositing a check, write the
check number individually and last name of check writer (bank
transit number here, which is the top portion of the two-part
number printed in the upper corner of the check). 5. Write the
amount of the check here.
Slide 28
Make a Deposit 6. If you are depositing more checks than can be
listed on the front, continue to list them on the back, and write
the total amount of the checks on back here. 7. Write the total
amount you are depositing here. 8. If you are making a deposit
inside a bank with a teller and you want to receive cash back from
your deposit, write the amount you want in this field. 9. Write the
total amount (less cash back) of your deposit in this field. Slide
28
Slide 29
Slide 29 Keeping a Checkbook Register Checks and a checkbook
register are received when you open an account A checkbook register
Used to track checking account transactions Provides a record of
payments made for bills or purchases (even online payments) Shows
how much money is in the account Always fill out the register
before you write a check 5-1 Checking Accounts
Checking Account Balances Important to keep track of debits or
credits Debit withdrawal from your account What else could decrease
your account? ________________________________ Deposit/credit money
you put into your account __________________________________
Conclusion: Gets larger when a deposit or credit is made and
smaller when withdrawals/checks are written against the
account
Slide 36
Monthly Bank Statement Lists each monetary transaction and the
current account balance for a specified time period Includes: Dates
Identification for each transaction (number or type, date, amount)
Transaction amounts for withdrawals and/or deposits Interest earned
(if applicable) Fees or charges (if applicable)
Slide 37
Monthly Bank Statement Lists each transaction and current
account balance Deposits Checks Debit Card transactions ATM
transactions Additional fees
Slide 38
Reading a bank statement teens lesson 6 - slide 6-H
Slide 39
Slide 39 Reconciling a Bank Statement Bank statements Come in
paper or electronic form Show the checks, other withdrawals, and
deposits made to an account Purpose of a bank reconciliation To
review the bank statement To update the checkbook register To bring
the statement and register balances into agreement 5-1 Checking
Accounts
Slide 40
Reconciling a Checking Account Reconcile Balance the checkbook
register each month to the balance shown on the statement Do this
every month to ensure the correct balance in the checkbook Knowing
the correct balance can help to avoid bouncing checks Account
balance = Start of the month account balance + total amount of
deposits made - total amount of checks written
Slide 41
Steps for Reconciling View the monthly bank statement and check
register
Slide 42
Place a check mark in the T column for all transactions that
have been cleared and are shown on the bank statement
Slide 43
Reconciling a checking account step 1: Obtain the current
balance from your bank statement. step 2: Add any deposits that you
have recorded in your check register but that are not on this
statement. step 3: Subtract any outstanding checks (checks you have
written but that have not yet cleared the banking system). step 4:
Compare the result with the current balance in your check register.
Note: The balance in your check register should be adjusted to
include: (a) deductions for service fees or other charges; (b)
additions for direct deposits and interest earned
Slide 44
Step 1: Determine the current statement balance from the bank
statement
Slide 45
Step 2: Add any outstanding deposits transactions that have not
cleared the bank Calculate the Subtotal
Slide 46
Slide 46 Ethics Writing Bad Checks A bad check is one you write
but do not have money in the account to pay Monitor your account
carefully to avoid writing a bad check by mistake Show ethical
behavior by not writing a bad check intentionally 5-2 Savings
Accounts
Slide 47
Step 3: Subtract any outstanding checks/withdrawals and
calculate Step 4 Compare the total with the checkbook register. If
the totals are different, double check the math and make sure all
service fees and bank charges are recorded in the check
register.
Slide 48
Bouncing a Check Check written for an amount over the current
balance held in the account Bounces due to insufficient funds, or
not enough money in the account to cover the check written A fee
will be charged to the account holder Harm future opportunities for
credit
Slide 49
Overdraft and Overdraft Protection Failure to record such
transactions, particularly debits, could result in your account
balance to be overdrawn having a negative balance Overdraft
penalty-a fee to cover the cost of process your bad check Overdraft
protection-an arrangement with the bank to cover checks so they
will not bounce
Slide 50
Check 21 Check Clearing for the 21 st Century Act (Check 21)
When a check is written, the money is automatically withdrawn from
a bank account Makes bouncing checks difficult Ex. Macys and other
department stores
Slide 51
Slide 52
ATM Automated teller machine, or a cash machine Can be used to
withdraw cash and make deposits at an ATM only Additional fees may
be assessed if the ATM used is not provided by the financial
institution sponsoring the card You need to have a PIN (personal
identification number)
Slide 53
Debit Card Swipe it through the store machine or put into an
ATM Allows you to withdraw cash or make a purchase at a store Enter
the PIN (personal identification number) Money is automatically
taken from the bank account when purchases are made electronically
Complete transaction
Slide 54
Pros and Cons - Debit Cards Convenient Small Can be used like a
credit card Allows a person to carry less cash Does not allow
overspending Can lose track of balance if transactions are not
written down Opens checking account up to credit fraud Others can
gain access to the account if the card is lost and PIN is known
Pros Cons
Slide 55
Electronic, Online & Smartphone Banking Electronic Funds
Transfer-EFT- the movement of funds using computers systems,
telephones or electronic terminals or smart phones Online and smart
phone banking allows account holders to access their account
information view transaction history and perform banking
transactions via the internet or their mobile phone Touch-Tone
banking-electronic services banks offer consumers like checking
account balances, pay bills and transfer money using a touchtone
phone.
Slide 56
Slide 56 Bank Services Safe deposit box Overdraft protection
Cashiers checks and money orders Stop Payment Bank cards Bank loans
5-2 Savings Accounts Banks offer home mortgages and other types of
loans.
Slide 57
Slide 57 Online Banking Involves banking using phone or
Internet access to bank accounts Offers various services Electronic
payment of bills Transfer of money between accounts Checking that
deposits are posted Seeing which checks have been processed Seeing
interest or fees that have been posted 5-2 Savings Accounts
Slide 58
Identity Theft Is stealing someones personal identifying
information and using it to make purchases or to get other benefits
Millions of Americans have their identity stolen every year You
have to protect yourself and your personal information such as:
address, phone number How? Old statement in the trash, online
scams, computer viruses, stealing your documents What to do? Be on
guard! Monitor your financial statements regularly. Shred your old
documents. Maintain computer security Keep you private info private
dont just provide it to anyone
Slide 59
Slide 59 Protecting Account Data Crimes can be committed using
account and personal data Check fraud and forgery Identity theft To
help prevent crime Keep cards and account information in a safe
place Protect your PIN or password when using cards 5-1 Checking
Accounts
Slide 60
Conclusion Why is it important to maintain your checking
account? It helps you to make better financial decisions and take
responsibility for those decisions Slide 60
