Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Checking account – transactional deposit account at a financial institution that allows for unlimited withdrawals and deposits Write checks Avoid carrying cash Monthly statement Useful for budgeting

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Signature card – card signed by individual opening account and kept on file to confirm account Always sign the same way Avoid nicknames Use ink; pencil can be erased Individual or joint account

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Make a deposit with a deposit slip. Availability of funds depends on: 1.Day of deposit 2.Type of deposit

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Deposit Slip: Date it Enter cash being deposited List checks (>3, list on back, subtotal and carry subtotal to front) Subtotal cash and checks Less cash received - sign Net deposit

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Check – written order to a bank to pay a stated sum from the drawer’s account Write neatly Use ink Sign consistently Use cursive Legible figures Do not erase; VOID

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Check register – personal record of your checking account; paper or electronic Check number Date To whom the check was written Amount of the check New balance

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Endorsement – signing of a document that allows for legal transfer from one party to another Trailing edge is the left side of the check when looking at the front of it

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking 3 Common Endorsements: 1.Blank - simplest; signature only 2.Restrictive – safer; “For Deposit Only” + signature 3.Endorsement in Full – used to transfer a check to another person; “Pay to the order of _____” + signature

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Bank Statement/Account Statement – monthly record sent/available to account holder summarizing all transactions Beginning balance & ending balance Debits (decreases) & credits (increases) Cleared checks

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Bank statement Vs. Check Register: They will probably NOT have same balance Checks written, but not cleared are called outstanding Math errors; forgotten items “Reconciling” or “Balancing” is important! Matching up 2 sources of information Reconcile the differences

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking First Step of Reconciliation: Identify transactions where you & bank agree (Register has a column for that)

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Second Step of Reconciliation: Add missing transaction from bank statement to your register Easy to forget to write down a debit card transaction Check receipts If you disagree, call the bank

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Third Step of Reconciliation: Some items in your register may not have cleared the bank yet 3 Possible Reasons for Discrepancy: 1.Bank has a transaction you don’t have 2.Amount in register does not agree with amount on statement 3.Math error in register/reconciliation *RECONCILE MONTHLY!

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Touch-Tone Banking Banks began offering account services via touch-tone phone Most have moved to internet banking

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Direct Deposit – credit from the source straight to the banking account Start of 20 th century –cash Cash replaced by checks 1970s – direct deposit offered Highly secure

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking ATM (Automated Teller Machine) – electronic banking outlet; lets customers complete basic transactions w/o a teller Deposits, withdrawals, transfers Insert debit card, enter PIN (24 hrs./days) Fees for not using your bank’s ATM!

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Automatic Payee-Initiated Payments– sign up to let company pay themselves monthly Avoid missed payments Saves postage Make sure you have enough money in the account!

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Online Banking – allows individuals to perform banking activities from home or smartphone (mobile banking) via Internet View all transactions, statements Transfer funds between accounts Pay bills (repeat pay)

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking Debit Cards – plastic card that provides the cardholder access to his/her bank account AKA: cash card, bank card, ATM card, check card $ deducted from checking account immediately Keep PIN a secret Report lost/stolen card immediately

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking What is difference between Debit and Credit Cards?

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking * Joint Account- Two owners, one signiture *Checking accounts are demand deposits because…. *Some checking accounts “earn” interest and are interest-bearing” *Service Charges are sometimes charged by the bank to you, to cover the paperwork the bank does to maintain the account

Chapter 29 Checking Accounts Opening an Account Writing Checks Keeping Records Endorsing Checks Reconciling 21 st Century Banking What does it mean to over-draw your account?