Presentation on theme: "Managing Your Checking Account and Other Financial Services"— Presentation transcript:
1Managing Your Checking Account and Other Financial Services Chapter 28Managing Your Checking Account and Other Financial Services
2Processing Your Checks Clearing -Returning a check to the drawer’s bank to be paid and charged to his or her checking account.Example - the next image illustrates the process which a check goes through, in order to be cleared, between to local parties.
4The Clearinghouse Clearinghouse - A place where member banks exchange checks in order to clear them.The method of clearing the checks through a clearinghouse is similar to that just discussed, except for the fact that the clearinghouses handle thousands of checks for many different banks.Automated Clearinghouse - transfers funds among banks using electronic payment entries.
5Federal Reserve System - Check Clearing One of the main functions of the Federal Reserve is clearing checks between banks in different cities.This process is a little more complex due to the volume of checks being cleared.Banks use a clearinghouse and their districts Federal Reserve Bank to settle their balances, while the Federal Reserve uses the Interdistrict Settlement Fund to settle their net amounts due among the banks in each of the 12 districts.
6Your Bank Statement Banks Statement - Included in the Statement - A report sent by the bank to a depositor showing the status of his or her account.Included in the Statement -Beginning Balance (beginning of month)Transactions made throughout month, involving the accountService ChargesInterest earned by the accountEnding Balance (end of the month)
7Examining Returned Checks Some banks will return the checks which have been paid to the drawer.Cancelled Checks -Each check that has been paid, gets cancelled by the bank. The banks do this by simply using a machine that stamps a cancellation number on the front or back of the check.These can be used as evidence that payment was actually received, if one of the payments are in question.
8Bank ReconciliationThe bank statement gives you a copy of the transactions involving your account throughout the month.It is necessary to bring this statement into agreement with your check register or your check stubs.Bank Reconciliation -A statement showing how the checkbook balance and the bank statement were brought into agreement.Start here 3rd hour on 12/3 same for 5th
9Finding Differences Outstanding Checks - Checks that have not been deducted from the bank-statement balance.Forgetting to record a transactionOften the situation with EFTsService ChargesInterest EarnedOr an error in recording
10Calculating the Adjusted Balance Possible Fixes -Subtracting the total of the outstanding checks she had listed on the form, from the bank statement balance.Subtracting service chargesAdding interest earnedSubtracting any forgotten EFTsCorrecting any errors in recording
11Selecting a Financial Institution Services Offered -Select the lowest costLocate the best interest rate on your savingsFind the lowest interest rate for loansSafety -FDIC - Federal Deposit Insurance CorporationConvenience -24-hour banking servicesBranch offices near your homeATM locationsFees and ChargesRestrictions