Checking Accounts and Banking Services Chapter 9 Page 205

I Can……. Explain the purpose, uses, and advantages of a personal checking account Prepare checking account documents including a signature card, checks, deposit slips, checkbook register, and bank reconciliation Explain the different types of check endorsements. Define the various banking services available and fees charged to consumers

Checking account A banking service where money is deposited into an account and checks (drafts) can be written to withdraw money from the account. Shop around for Lower fees Minimum balance Higher interest

Purpose of Checking Account Carry instead of cash Safety…..stop payment Send payments through mail Proof of payment Canceled check - checks that the bank has processed Use with debit card Create online bill payments Budgeting Several online services

Opening Checking Account Select service Free Monthly charges Signature card Order checks (cost to you)

Writing Checks Responsibilities Use pen Write legibly Make sure everything is filled out Sign your name the same Avoid mistakes…void if necessary Have adequate funds What is an overdraft….”bounced” check Floating a check….writing it for a later date (postdate) Record in check register

Parts of a check 1) Date the check is written 2) Payee – person or Co. to whom the check is made payable

Parts of a check 3) Numeric Amount - amount of dollars and cents 4) Written Amount – amount in words…use “and”. Write as far to the left as you can

Parts of a check 5) Memo line- purpose of the check 6) Drawer or maker– signature of person authorized to write the check

Parts of a check 7) Makers Name, Address, (Phone)…..wouldn’t include phone 8) Check number….may not start at 1

Parts of a check 9) ABA Number…..location and district of makers bank/helps with routing 11) Routing /Account Number– may also include check #

Good Example

Penalties for overdrafts Service charges: $15 - $25 per check Both parties can get charged Criminal charges Garnished wages Jail time Criminal Record

Deposit Ticket

Deposit Ticket

Checkbook Register

Checkbook Register

Check Endorsements (Blank) Blank Endorsement – signature of the payee

Check Endorsement (Special) Special Endorsement (endorsement in full)– is transferring the check to a second person. Naming a new payee

Check Endorsement (Restrictive) Restrictive Endorsement – restricts or limits the use of the check…can only be deposited into account.

Lets write some checks Assignment Read pages 16-17 in workbook Complete pages 18-20 in workbook **Make sure you follow all directions**

Reconciling your checking account Reconciliation --The process of matching the balance in your checkbook register to the balance on your bank statement. Bank’s balance should be the same as yours Why don’t the two match? Outstanding checks Outstanding deposits Errors NSF Checks Service Charges Interest

Bank Reconciliation Steps Reconciliation form in on the back of the bank statement Banks are not perfect and do make errors Compare Bank Statement to Checkbook Register Check off checks and deposits that are on both documents Anything not checked off is outstanding Will need to be added or subtracted from bank or register balance

This is where you would show your work Using the following information reconcile the checkbook Checkbook balance: 250.00 Statement Balance: 315.00 Service Charge: 5.00 Outstanding Checks: 100.00 Outstanding Deposits: 30.00   Show work here: Checkbook Balance __________________Statement Balance __________________  This is where you would show your work Adjusted Balance ___________________ Adjusted Balance __________________

Using the following information reconcile the checkbook SOLUTION Using the following information reconcile the checkbook Checkbook balance: 250.00 Statement Balance: 315.00 Service Charge: 5.00 Outstanding Checks: 100.00 Outstanding Deposits: 30.00   Show work here: Checkbook Balance ____250.00___________Statement Balance ______315.00____   +30.00 -5.00 -100.00 Adjusted Balance ______245.00_______ Adjusted Balance _________245.00____

Using and Maintaining A Checking Account Keep checks in controlled area Maintain check register Use direct deposit for payroll checks Deposit procedures Use deposit slip Endorse check at bank only Record ATM transactions in check register Prepare a monthly reconciliation Report problems to bank immediately

Banking Services Certified Checks Cashier’s Check Money Orders Bank guarantees to be good Funds deducted when check is purchased Cashier’s Check Written by bank on its own funds Money Orders Like a check that you buy…maximum $ limit Safe Deposit Boxes

Banking Services… Loans Trusts Brokerage services Bank credit cards Debit Cards Direct Payments ATM Stop payment orders

Find the right bank You will be using Excel (or equivalent) to create a matrix/table that is similar to the one described on page 219. You will need to read page 219 before you start the assignment. Pick three banks and three services that you feel are important to you in choosing a bank. Create the matrix/table and give each bank a ranking of 1 to 5 (1 being lowest and 5 being highest) for each of the services that you chose. Create a formula that will add the totals up for you Share your table with me….Google Drive Vocabulary terms—page 224

Articles http://www.ourfamilyplace.com/homeowner/budgettips.html https://www.consumerdebit.com/consumerinfo/us/en/checkingaccttips.htm

Article Lookup Count off 1 – 5 and find information on your topic: Preparing a Budget Tips Budgeting for college Maintaining a checking account tips Bank services from local bank with costs Tips for using a debit card Prepare a report, ½ page summary and ½ page reaction. Type, double-spaced or write out.