1. FINANCIAL AWARENESS Checking & Savings Accounts
Lesson 3: Managing a Checking Account – Part 3
Instructor PowerPoint
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2. Stop-Payment Order
Sometimes it may be necessary to stop a payment on a check that you have already written.
This is referred to as a Stop-Payment Order or canceling a check.
Here are some legitimate reasons for placing a Stop-Payment Order on a check:
Your mailed check was never received by the intended individual or company,

3. Stop-Payment Order You have had some checks stolen or
You have a legitimate dispute against a company for a service or product.
To stop a payment on a check, you must go to your branch location and complete the necessary paperwork.
The bank will charge you a fee for this service. 3

4. Stop-Payment Order
If you choose to stop a payment on a check, you must have a valid reason.
You could possibly set yourself up for civil or criminal liability for doing so. 4

5. Lost or Stolen Checks
If you think some checks have been lost or stolen, contact your bank immediately.
It is your responsibility to be aware of your account activity.
You could be held responsible for lost or stolen checks if you fail to notify the bank in a timely manner. 5

6. Lost or Stolen Checks Contact your bank immediately if:
Checks are missing from your checkbook or your supply of checks,
Check order delivery is never received,
Mail containing account information appears to have been tampered with or
Unauthorized transactions appear on your Checking Account Statement. 6

7. Exercise #4: Managing a Checking Account
Distribute Exercise #4: Managing a Checking Account.
You will use this handout throughout Managing a Checking Account – Part 3 to mark your responses to questions. 7

8. Exercise #4: Managing a Checking Account Question 1
Directions:
Read this scenario, then select the best answer to this question.
Scenario:
While balancing his monthly bank statement, Vincent noticed some checks listed on the statement that he did not write.
Question 1
What should Vincent do?
Ask his roommate if he borrowed some checks
Wait for the next bank statement to see if other checks appear
Call his bank immediately
Nothing, he probably forgot about the purchases 8

9. Tips for Preventing Account Fraud
Here are some tips for keeping your account information secure and preventing fraud:
Only carry as many checks as you need on your person.
Keep all blank checks and account information in a secure location. 9

10. Tips for Preventing Account Fraud
Use dark, heavy ink when writing a check. This will help prevent someone being able to “wash” the check and change the amount.
Draw a line to fill in gaps in the spaces where you designate a payee and the amount of the check. 10

11. Tips for Preventing Account Fraud
Check your account on a regular basis by phone, ATM or online and research and report any errors or discrepancies to your bank immediately.
Balance your account upon receiving your monthly statement and immediately report any errors or discrepancies to your bank.
Report any mail theft or tampering to the U.S. Postal Service. 11

12. Overdraft Protection
Most banks offer overdraft protection, for a fee, in case you accidentally “bounce” a check.
If you write a check for insufficient funds, the bank will cover the amount of the check and will automatically withdraw that amount plus their fee from another designated account. 12

13. Overdraft Protection
Most banks offer a variety of overdraft protection options, such as:
Checking Linked to Savings Funds are automatically transferred from your savings account into your checking account to cover the amount of the overdraft.
There is usually a transfer fee for the service. 13

14. Overdraft Protection
Line of Credit If you have a line of credit with your bank, money can be transferred from this account into your checking account to cover the insufficient funds.
However, the bank will usually transfer a larger amount than the actual overdraft.
You will be charged a fee for the service as well interest on the transferred amount. 14

15. Overdraft Protection
Credit Card Some banks will let customers use a credit card to cover overdrafts especially if it is a bank owned credit card.
Again you will be charged a fee for this service and will incur interest on the transferred amount. 15

16. Other Types of Checks
Most checking accounts utilize personal checks and a debit card for most transactions; however, there are other types of checks you can use to pay bills or make purchases. 16

17. Other Types of Checks
Here are some different types of checks that are available at most banks:
Certified Check
A certified check guarantees payment by the bank by placing a hold on the amount of the personal check from funds currently available in the individual’s checking account until the check clears. 17

18. Other Types of Checks Cashier's Check
For a fee, you can purchase a cashier’s check for a specific amount and the funds are guaranteed because you pay the bank the entire amount of the check.
The bank then generates a check in that amount made payable to the designated vendor. 18

19. Other Types of Checks Cashier's Check Cont.
Once the check is cashed, the bank covers the amount of the check and not your individual personal account.
A cashier’s check is usually for amounts over $500. 19

20. Other Types of Checks Money Orders
A money order is like a cashier’s check except it is usually for a smaller amount of money.
Individuals who do not have a personal checking account use money orders to send money and pay bills. 20

21. Other Types of Checks Money Orders Cont.
For a fee, money orders are available for purchase at post offices, grocery stores, convenient stores and a variety of check cashing stores.
Some businesses may require one of these other types of checks especially if the purchase requires a guarantee that the funds will be available when the check is cashed. 21

22. Exercise #4: Managing a Checking Account Question 2
Which of the following can you do to keep your account information secure and prevent fraud?
Keep your checks and account information in a secure location
Balance your account upon receiving your monthly statement to look for errors
Report any mail theft or tampering to the U.S. Postal Service
All of the above 22

23. Managing a Checking Account Summary
Here are some dos and don’ts in managing your checking account:
Do:
Always remember that you are responsible for monitoring account activity not your bank.
Always notify your financial institution if you change your name or address. 23

24. Managing a Checking Account Summary
Do:
Always write the check information in your Transaction Register before writing a check.
Always write transactions in your Transaction Register daily and subtract from your current balance. 24

25. Managing a Checking Account Summary
Don’t:
Do not close your account by letting it go to a zero balance. You have to go to the bank location to complete the necessary paperwork to close an account.
Never give your personal identification number (PIN) to someone else. 25

26. Managing a Checking Account Summary
Don’t:
Never use other people's checks, or let others use yours.
Never write a post-dated check. It can be cashed before the intended date and possibly overdraw your account. 26

27. Managing a Checking Account Summary
Here are some guidelines to follow to practice good checking account management:
Update your Transaction Register regularly to include all checks, ATM withdrawals and debit card purchases.
Balance your checkbook daily using the most current information about your account by phone, ATM or online.
Promptly review your checking account statement every month. 27

28. Managing a Checking Account Summary
Set-up a specific place or file in your home for all bills and financial related documents.
Know all the fees associated with your checking account.
Know how your bank processes checks and deposits.
Set-up overdraft protection.
If available, set-up direct deposit. 28

29. Topic Quiz: Managing a Checking Account
Directions: Circle the best answer to the question.
Question 1
What is a direct deposit?
When you make a deposit at the bank
When you make a deposit through an ATM
When your paycheck is automatically deposited into your account
When you sign the back of your paycheck 29

30. What is a restrictive endorsement?
Question 2
What is a restrictive endorsement?
When you want a check cashed or deposited into your account
When you allow a third party to cash or deposit the check
When you withdraw cash your paycheck
When you specifically say what to do with the check 30

31. What is overdraft protection?
Question 3
What is overdraft protection?
A service where funds are automatically transferred to your account each month
A service where the bank will cover the amount of any transaction that exceeds your balance
A service where you are charged for exceeding a maximum number of transactions per month
A service where you are charged for exceeding the maximum number of ATM transactions per month 31

32. Review the Deposit Slip, then select the best answer to the question.
Directions:
Review the Deposit Slip, then select the best answer to the question.
Question 4
What is wrong with this Deposit Slip?
Signature is missing.
Date of deposit is missing.
Check amount is wrong.
Nothing, the Deposit Slip is correct. 32

33. Promptly review your checking account statement every month.
Question 5
To properly managing your checking account you should do which of the following?
Update your Transaction Register regularly to include all checks, ATM withdrawals and debit card purchases.
Balance your checkbook daily using the most current information about your account by phone, ATM or online.
Promptly review your checking account statement every month.
All of the above 33

34. Lesson 3: Managing a Checking Account – Part 3
END OF LESSON