BANKING/CHECKING ACCOUNTS

Banking/Checking Accounts How Banks Work Using a checking account Balancing your checking account Electronic banking Other banking services

How Banks Works Business to earn a profit Provide security Purchasing power Banks are regulated

Banks FDIC-Federal Deposit Insurance Corporation Created by the federal government. Insures up to a maximum of $250,000.

Credit Union Credit unions are non-profit. When you’re doing business with a credit union the profits of that credit union are being returned to the members of the credit union in the form of lower loan interest rates and higher dividends.

Q: Name 2 factors that should be considered before choosing a bank? Locations (ATMs and Branches) Services offered Services charged Online Banking FDIC Insurance Account requirements Member FDIC

Banking/Checking Accounts Federal Reserve Study 42 billion checks written in All time low of billion 2010.

Why the decline? Electronic Payments 2010: 84.6 billion electronic items along with the adoption of electronic check processing Banking/Checking Accounts

Check are written orders we use to tell our bank to pay money or to transfer funds from our accounts to the check holder. Banking/Checking Accounts

Types of Checking Accounts Checking Account Is an account that is for everyday transactions (Debit Card, Checks, ATMs) The Demand Deposit Account The most common type of checking account. Share Draft Account The name of a checking account from a credit union. MMDA-Money Market Deposit Account Interest bearing checking account.

Checking Accounts Checking Accounts Fees Maintenance fee Service charges Overdrafts

Checking Accounts Parts of a check Recording each transaction-check register Account running balance Overdrawing Cashing a check-Endorsements Deposit slips Bank Statements Reconciling your account

Parts of the check Can you name the parts of the check?

Endorsements 1. Blank 2. Restrictive 3. 2 party/Transfer/Special 4.Corrective 4 Ways to Endorse

Deposit/Withdrawal Slips Deposit Slip Example 1. Savings 2.Checking 3.Withdrawal

Banking Services Wire Transfer A bank can arrange money to wire from your account. Safe Deposit Box Boxes with individual locks that you may rent from a bank.

Banking Services Special Types of Checks Certified Checks Once stamped or perforated the bank becomes liable for the amount certified. You have a checking account at the bank. Cashier’s Checks A person who buys a cashier’s check does not need to have a checking account at that bank. A cashier’s check has a better guarantee of payment because it is drawn by a bank against itself.

Banking Money Order No checking account Prefer not to make payments with cash Purchase at bank, retail stores Government Checks Tax refund is an example of a government check Traveler’s Check Traveler’s checks are sold through banks and travel companies Denominations: $20, $50, $100 Signs check at the time of purchase and when they are collected Insured

Banking Services IRA ACCOUNT Individual Retirement Account. $2000 is allowed each year for each individual, exempt from taxation until 591/2 years of age. Heavy penalties for early withdrawal. Certificate of Deposit Savings account certificate form instead of passbook, earns an attractive interest rate for a certain amount of time.

Vocabulary Reconciliation Bringing two figures into balance or agreement. Your account is “in balance” when your check register is in agreement with the bank’s record. Record all Debit or check transactions in your check register. Compare what is in your register to what the bank is reporting on your statement, or online. Cancelled Check Your bank might return your cancelled check with your statement. Each check will have a cancelled stamp on it. This stamp indicates that your bank has paid the check.

Vocabulary Check Clear or Clearing When you deposit a check, you can’t withdraw the money immediately unless you already have enough money in your account to cover the check. When your bank receives payment for the check the check has cleared and the money is available.

Electronic Banking EFT-Electronic Funds Transfer Bank moves money from one account to another electronically.

Electronic Banking EFT’S are commonly made through ATM Direct Deposit Debit Cards Automatic Bill Payments On-line Banking

Electronic Banking ATM Computer Terminal Deposits Withdraw Cash Check Account Balance Pay Certain Types of Bills

Electronic Banking ATM Pin number- Personal Identification Number ATM Transactions Deposits Withdraw ATM Costs What if I lose my card?

Electronic Banking Theme parks, resorts, hotels and gas stations are notorious for changing high ATM fees. It costs nearly $3 every time you go to another bank's ATM. Two such withdrawals per week means you're throwing away $300 per year.

How do You Use a Debit Card? Swipe and Sign to make Purchases –Sign a receipt copy for the merchant Just like when using a credit card Swipe and Enter PIN to make Purchases and Obtain Cash –PIN stands for Personal Identification Number A number that only you know DO NOT share your PIN with anyone! Member FDIC

Using a Debit Card Cash Back from Purchases –Use your debit card at a store for a purchase –Use your PIN instead of signing –Before completing the transaction, request cash back (i.e. $20, $40, $60) A Debit Card is NOT a Credit Card! –Only use it if there is enough money in your account Member FDIC

Electronic Banking Debit Cards Works like a check No check writing Stores prefer Immediate payment received by store 10 places Not to use a debit card

Smart Phone- Electronic Banking Smart Phone App.