1. Money on demand! The Checking Account
The most widely used service that a bank offers.
Money
on demand!

2. Benefits of a checking account
Convenience
Safety to make payments with less risk than using cash.
Proof of payment
A record of finances for managing your money.
Benefits of a checking account

3. The Checking Account
Checking Account – A banking service where money is
deposited into an account and checks can be written
to withdraw money from the account. AKA: Demand Deposit
Other ways to withdraw money from a checking account:
ATM withdrawals
Debit card transactions
On-line banking transactions
A check is a substitute for money.
Writing checks is safer than carrying cash!

4. The Checking Account Opening Your Checking Account
Complete application
Complete Signature Card, which is used to verify your signature.
Make Deposit!

5. The Checking Account Making Deposits:
If you are depositing checks into your checking account,
the checks must be endorsed.
To endorse means to transfer ownership.
To endorse a check, you must sign the back of the check.

6. The Checking Account Three types of endorsements:
1. Blank endorsement: Simple signature on back. Sign
check as it is written on check.
2. Restrictive endorsement: Restricts further transfers.
A typical endorsement will read “For Deposit Only.”

7. The Checking Account Three types of endorsements:
Special Endorsement. Transfer ownership to another
person. A typical special endorsement will read:
“Pay to the order of:”

8. The Checking Account Using Your Checking Account Making Deposits
Complete deposit slip
Date
List cash/currency
List checks separately
Indicate cash received back (if desiring cash back)
Indicate total deposit

9. The Checking Account Using Your Checking Account Parts of a check:
Check Number
ABA Number (American Banker’s Association)
Preprinted Name and Address
Date
Payee
Numeric Amount
Written Amount – Legal amount

10. The Checking Account Using Your Checking Account
Parts of a check contd.:
Drawer is the maker of the check.
Payee is the person who the check is written to.
Drawee is the bank that pays the check.
Account Number
Memo line

11. The Checking Account Eight proper check writing habits
1. Write checks on the proper form
2. Use permanent ink
3. Only write checks if money is available
4. Use the current date
5. Avoid making checks payable to “Cash”
6. Always fill in the amount
7. Void checks on which you make errors.
8. Record every payment from your checking account.

12. The Checking Account Recording checking account activity
Checkbook Register – A record keeping system used to
keep track of checks that you have written, debit card
transactions, ATM (Automatic Teller Machine) trans-
actions (deposits and withdrawals), and on-line banking
Transactions. You could also use a Check stub or duplicate copy.
Any transactions that has affected your account should be
Recorded in the checkbook register.

13. The Checking Account Using a Checkbook Register, contd.
What should be included in your check register:
Check Number – if applicable
Date
Description of transaction (I.e., to whom check was
written, debit card transaction, etc.)
Amount
Balance – A MUST!

14. The Checking Account Debit Card Transactions
Debit cards allow you to make payments for items
at any place that a VISA/Mastercard is accepted.
Payments are deducted directly from your checking
account.
Debit Cards are a faster & safer way of writing a check
Debit Cards are NOT credit cards. Payment is deducted
immediately. (Credit cards allow for “extra time” to pay and
incur finance charges (interest).

15. The Bank Reconciliation! The Checking Account
Bringing into agreement your bank statement balance and your check register balance!

16. The Checking Account The Bank Reconciliation Process
Bringing into agreement your check register balance with
the bank statement balance.
The Path of a Check

17. The Checking Account The Bank Reconciliation Process
Bringing into agreement your check register balance with
the bank statement balance.
Many bank customers wrongly assume that the account
balance shown on the bank statement is the actual
amount of money available. This is NOT true!
You must reconcile your checkbook register with the
bank statement to “prove your balance” and make sure
that they are in agreement.

18. The Checking Account The Bank Reconciliation Process
Bank Statements are received from the bank monthly
and show all of the transactions that have occurred during
the month.
The bank’s balance and your checkbook register
balance will usually NOT agree because of OUTSTANDING
CHECKS and DEPOSITS and fees.

19. The Checking Account Checking Account Vocabulary
Outstanding Check - A check that has been written but
Has not been processed (paid) by the bank
Cancelled Check – A check that the bank has processed
and paid.
Overdraft – A check that cannot be processed and paid
by the bank because of insufficient funds.
(AKA: Bouncing a check)

20. Deposits in transit Service charges
Deposits that have not reached the bank or been recorded by the bank before the statement is prepared
Service charges
E.g., check printing and processing, account fees
NSF Checks
Not sufficient funds
Somebody wrote us a rubber check

21. The Checking Account When you receive your bank statement, IMMEDIATELY
do the following:
Verify all of the transactions on your bank statement
against what you have recorded in your check register.
if you have forgotten any, record them in your check
register.
Re-calculate your balances in your check register to
make certain that you have calculated correctly.

22. The Checking Account THEN, IMMEDIATELY do the following:
Perform the reconciliation process:
Step 1: List your current STATEMENT balance.
Step 2: Add outstanding deposits
Step 3: Subtract outstanding checks or debit card transactions.
and any fees that the bank has charged.
The total should equal your checkbook balance. If it
doesn’t, something is wrong and you need to re-check
your calculations and make certain that EVERYTHING has been
recorded.

23. Reconciled! The Checking Account
When both the statement balance and the check
register balance agree, your checking account has been. . .
Reconciled!
…a must in maintaining
checkbook responsibility!

24. Why your checking account and bank balance might be different.
You may have forgotten to record a transaction.
Bank may have charged you a service charge.
Bank doesn’t know about a deposit.
Interest earned may have been added.
You may have recorded the amount of a check incorrectly.
Some of your checks may not have cleared.
Why your checking account and bank balance might be different.