1. Chapter 9 Checking Accounts and Other Banking Services
Other Banking Services and Fees

2. Lesson 9.1 Checking Accounts
Describe the purpose of a checking account.
Discuss how to prepare a signature authorization form, checks, check endorsements, deposit slips, a checkbook register, and a bank reconciliation.
Be able to distinguish between different types of checking accounts.

3. Checking Account Check Demand deposit Canceled check
A written order to a bank to pay stated amount to payee
Demand deposit
Another name for checking account
Canceled check
Stamped by bank showing it has “cleared” (See P237 for entire process)

4. Checking Account Why open a checking account?
Convenient and safer than carrying cash
Cancelled checks serve as receipts or proof of payment
Check records help in determining family budgets

5. Checking Account How to open checking account Prepare a signature card
Two pieces of ID are usually needed
Must have a minimum deposit

6. Checking Account Overdraft Floating a check
A check written for more money than you have in your account
Another word for a check “bouncing”
You will be charged at least $20 for NSF (non-sufficient funds)
Floating a check
When you knowingly write a check without enough money
You are hoping a deposit will “hit” before the check is cashed

7. Parts of a Check July 1, 20-- Food Mart 36.12 Thirty-six and 12/100
581
ARDYS JOHNSON
Phone:
4250 West 18th Avenue
Chicago, IL
SKY CENTRAL BANK
Chicago, Illinois
PAY TO THE
ORDER OF
DOLLARS
For Classroom Use Only
MEMO
DATE
2-74
710
July 1, 20--
Food Mart
36.12 $
Thirty-six and 12/100
groceries
Ardys Johnson

8. Using Your Checking Account
Writing checks
Always use a pen with dark ink
Write legibly
Sign name EXACTLY as it appears on check
If you make a mistake do not correct, just write VOID across check
Save “voided” check for your records
Make sure you have enough money in your account to cover check

9. Using Your Checking Account
Making deposits
On “deposit slip”
Date of transaction
Amount of cash
List checks individually
Total amount depositing
Any cash you are receiving back
Must sign deposit slip if receiving $$
Net deposit
Keep a copy for your records

10. Using Your Checking Account
Checkbook register
Booklet used to record all checking account transactions
Record balance from last page to the next page on top right box
As soon as you do a transaction (ATM, deposit, check) record it
Always check for credits (+) or debits (-)
Double check math – always update balance
Be sure to include any service fees

11. Reconciling Your Checking Account
Provided on back of bank statement
Sent once a month
Includes withdrawals, deposits, service charges and interest earned
Reconcile
Just means to check your records with the bank’s records

12. Reconciling Your Checking Account
Steps to reconcile
Start with ending balance from the bank
Add any deposits that you have recorded, but the bank hasn’t recorded
Subtract any checks or withdrawals that you have recorded but not the bank
Get new balance
Should be the same! Check for any errors.

13. Reconciling Your Checking Account
Write ending balance from bank statement.
Add credits or deposits not on statement.
Total lines 1 and 2.
Write total checks outstanding.
Subtract line 4 from line 3. (Should agree with checkbook balance)
100.00
139.90

14. Endorsing Checks Blank endorsement Joint endorsement
Paid to you and you sign it
Joint endorsement
Check is made out to 2 people, both must sign
Special endorsement – “Pay to the order of”
Signing over the check to someone else to cash
Restrictive endorsement – “For deposit only”
Use when depositing in ATMs or mailing deposits
Misspelled name
Sign with incorrect spelling first, the sign correct spelling below

15. Types of Checking Accounts
Joint accounts
Opened to two or more people
Survivorship account – someone dies, then the account is left to surviving person.
Avoids “inheritance tax”
Anyone on account has the right to all the money in account
Special accounts
Available for people that do not write that many checks each month
Usually a flat rate, plus a fee per check

16. Types of Checking Accounts
Standard accounts
Usually set fee per month, but no per-check fee
Maintain a minimum balance – no fee
Interest-bearing accounts
Earn a larger % of interest on balance
Higher minimum balance requirements
Share accounts
Credit unions
Usually lower minimum balances or no minimum balance
Little or no service fee

17. Lesson 9.2 Other Banking Services and Fees
Describe various banking services other than checking accounts available to consumers.
Identify services for which banks commonly charge a fee.

18. Other Banking Services
Guaranteed-payment checks
Certified Check
Write the check and the bank will automatically deduct from checking account and stamp “certified”
The payee knows that the check is good
Banks charge around $2.50 per check to certify
Use if you are buying a house, car, etc.
Cashier’s Check (or bank draft)
Give the bank money and they write a check from their funds
Similar to a certified check, but your identity is not revealed

19. Other Banking Services
Money orders
Similar to other guaranteed-payment checks
Can purchase at banks, post offices and local businesses
Fee depending on the size of the money order

20. Other Banking Services
Debit cards
Usually have the VISA or MasterCard logo.
Use at ATMs to get out money
Use at retail stores to make purchases
Money is immediately taken out of your checking account
May be a minimum purchase amount, just like credit cards

21. Other Banking Services
Credit cards
Usually have the VISA or MasterCard logo
Charged interest for any unpaid account balance
Try to always pay off at end of month!
Choose one that does not have an annual fee
Automated teller machines (ATM)
Make withdrawals/deposits to checking and savings accounts
Make payments on loans and bills
Must have a PIN number to access – keep secure!
Best to only use ATMs at banks

22. Other Banking Services
Online/Telephone banking
Get up-to-date account balances
Check anytime – day or night
Stop payment orders
Notifies bank not to cash a check or checks
Banks charge a fee of $10 or more
Use stop payment if checks are lost or stolen

23. Other Banking Services
Safe deposit boxes
Metal box or safe
Yearly rental fees from $25 - $100
Store valuable items you do not want stolen or damaged in case of house fire
Jewelry, birth, marriage, death certificates, deeds, etc.

24. Other Banking Services
Loans and trusts
Make car, home or home improvements loans
Can be “trustee” to a minor or person that needs money/property managed
Financial services
Some large banks provide brokerage services for buying/selling stocks and bonds

25. Bank Fees Examples of bank fees Loan fee Trustee fee
MYPF Chapter 09
12-Sept-2001
Bank Fees
Examples of bank fees
Loan fee
Trustee fee
Check cashing fee for non-customers
Per-check fee
Maintenance fee
Check printing fee
ATM transaction fee

26. Other terms… FDIC (Federal Deposit Insurance Company)
MYPF Chapter 09
12-Sept-2001
Other terms…
FDIC (Federal Deposit Insurance Company)
Banks insure your deposits up to $100,000 per account in case of bankruptcy, robbery, etc.
Does not insure any amount over $100,000
Banks oversees do