Checking Accounts 3 rd Period STEP Ms. Gikas 2009-2010.
Post on 27-Dec-2015
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The Convenience of Checking Check – a written order to
pay someone takes money directly out of the
persons checking account who wrote the check
Keep track of your expenses Keeps your money safe If lost or stolen, you can stop
payment Pay bills with and show proof of
payment
Where to Open an Account
Select a financial institution or bankConsider the following factors when
choosing the right bank:Convenience ServicesTypes of accounts offeredFees
Opening a Bank Account
Convenience near home or work Store hours
Services Checking & Savings ATM machines Drive up banking Bank statement Credit/debit cards
Debit – take money directly from checking account
Loans Safe-deposit boxes Certified/cashier/traveler
checks Money orders
Types of Accounts Individual account
Only your signature Joint account
1-2 owners can sign on the account
Interest paying account Like a savings account Interest is paid to you
depending on the amount Fees
Costs Money Differs, depending on bank Free checking Pay fee for each check Order checkbooks Huge fee for bounced
checks
Opening a Checking Account Find a Bank/Financial Institution &
Open a Checking Account Go in and just ask, “I want to Open a
Checking Account” Fill out an application You will be asked to sign a signature
card Helps them read your signature on checks
Prevents forgery
Need to bring ID and Social Security Card
Making a DepositMaking a Deposit Must have money Must have money
in your checkingin your checking– Needed to write Needed to write
checkschecks Bank teller will ask Bank teller will ask
you to complete a you to complete a deposit slipdeposit slip
Deposit SlipDeposit Slip– Records how Records how
much money you much money you are putting into are putting into your checkingyour checking
Spaces are Spaces are provided to list provided to list either cash or either cash or checkcheck
Deposit money Deposit money electronicallyelectronically– Transfer money Transfer money
From account to From account to accountaccount
Have your job send Have your job send your checks directly your checks directly
Deposit SlipDeposit Slip
1. Write the date you are making the deposit.1. Write the date you are making the deposit.2. If you are depositing currency (paper bills), write the total amount here.2. If you are depositing currency (paper bills), write the total amount here.3. If you are depositing coins, write the total amount here.3. If you are depositing coins, write the total amount here.4. If you are depositing a check, write the bank transit number here, which is 4. If you are depositing a check, write the bank transit number here, which is
the top portion of the two-part number printed in the upper corner of the the top portion of the two-part number printed in the upper corner of the check.check.
5. Write the amount of the check here.5. Write the amount of the check here.6. If you are depositing more checks than can be listed on the front, continue to 6. If you are depositing more checks than can be listed on the front, continue to
list them on the back, and write the total amount of the checks on back here.list them on the back, and write the total amount of the checks on back here.7. Write the total amount you are depositing here.7. Write the total amount you are depositing here.8. If you are making a deposit inside a bank with a teller and you want to 8. If you are making a deposit inside a bank with a teller and you want to
receive cash back from your deposit, write the amount you want.receive cash back from your deposit, write the amount you want.9. Write the total amount (less cash back) of your deposit. 9. Write the total amount (less cash back) of your deposit.
Endorsing a Check When depositing a check into your account, it must be
endorsed Endorse – sign your name on the back of its left edge Signature must be 1 ½ inches of the edge Endorsed checks can be cashed or deposited Do not sign until its cashed or deposited Once check is endorsed, anyone can cash it If endorsed check is lost, the money is gone
Writing a Check
Checks should be written in ink Prevents others from changing the
amount or name
Bank will return checks unpaid with information that’s been erased, crossed out, or changed in any way
Using Check Registers
Most checks come w/ Check Registers Register – place to record all deposits,
check purchases & credits that affect your account Helps keep track of how much money you
have in the account Complete every time you write a check or
deposit Check and service fees are subtracted from your
balance
Using Check Registers Comes with stubs or
carbon Written record of check
numbers, dates, amounts & parties to whom checks are written to
Used to avoid overdrawing your account
checks will bounce if you do not have enough money in your account Bank will charge a fee against
inefficient funds
Using Electronic Checking
Electronic Checking – allows to pay bills using the computer or internetPay bills or view checking account onlineBills can be paid automatically
Balancing your Checkbook
Monthly/quarterly statement from bank Bank Statement – lists all your deposits, cash
withdrawals, check withdrawals, service charges, & interest payments Lists your beginning & ending balances
1. Bank account details and sort code
2. Balance at the beginning of statement period
3. Date of transaction 4. Type of transaction 5. Amount of transaction 6. Running balance after each
transaction7. Balance at the end of the
statement period
8. This denotes a regular payment from your account by Direct Debit
9. This denotes a regular payment from your account to another account by Standing Order
10. This shows where you have taken money out at an ATM at an extra cost of $1.50
11. This shows where you have taken money out at an ATM at no extra cost
Special Types of Checks
Certified checks – bank guarantees payment
Withdrawals it from your checking
The bank stamps it as “certified”
Cashier checks – drawn from the bank on its own funds
Special Types of Checks
Money order – pay a certain amount of money to a certain party
Can be used to pay bills; similar to personal checks
Can be purchases at.. Currency exchange Banks US post offices Western Unions
Traveler’s checks –purchase for vacations
If lost or stolen, they can be replaced
You pay a $1.00 for every hundred dollars worth of travelers checks
Reasons for Saving
Money managementSave a portion from each paycheckMain Reasons for saving money:
Emergencies Future loss of income Travel and recreation Advanced education Major purchases such as car or home Retirement Financial security
Where to Save
Several options for saving your money
Become familiar with banks that offer saving accounts
Find out how much interest they will pay
WHERE TO SAVE (CONT.)
Decide where you want to deposit your money Commercial banks
Department stores of finance. Provide a variety of banking services and financial
advice Offer savings accounts
Savings and loan associations Loans money to home buyers Pay higher interest rates on savings accounts than
commercial banks Credit Unions
Non profit banks Owned by and operated for their members
People who belong to a trade union, church, company, professional organization
Will your Savings be Safe?
Banks that are insured are safe places to keep your money Offers protection Make sure you choose a bank that’s insured
2 agencies are responsible for insuring the banks money Federal Deposit Insurance Corporation (FDIC)
– protects deposits, savings, loans for most banks National Credit Union Association (NCUA) –
protects deposits on most credit unions
Ways to be Safe
Most common ways to save Savings accounts Savings clubs Certificates of deposits US savings bonds
Saving Accounts Open an account at
a local bank Statement savings
account – type of account where you receive monthly or quarterly statement all statements &
withdrawals are recorded
Earn Interest Interest – money paid to
you for allowing a bank to have & use your money the longer you keep your
money in savings, the more interest you earn
Interest is paid… Daily Quarterly (4 times a year) Semiannually (twice a year) Annually (once a year)
Savings Accounts Cont. Interest is added to a
savings account Earns interest
Both the principle & earned interest continue to earn interest, known as compound interest Principle – savings account
deposit Compound Interest – interest
figured in the principle plus the earned interest of financial account
Opening a Savings Account & Comparing Fees
Open a Savings account Convenience
Select a bank near home Hours that meet your
needs Check for how interest
they will pay choose the highest
interest rate Pick bank that you can
have both your checking and savings account
Comparing Fees Some banks require
a fee Must maintain a
certain balance in your account
Be aware the fees your bank may charge
Making a DepositMaking a Deposit
To put money in your savings, you must fill out a To put money in your savings, you must fill out a deposit formdeposit form
Fill them out correctly by following these stepsFill them out correctly by following these steps Write name, date & account numberWrite name, date & account number On currency line, list paper money totalOn currency line, list paper money total On coin line, list total amount of coinsOn coin line, list total amount of coins List each check separatelyList each check separately List amount of cash you want to receive from accountList amount of cash you want to receive from account Subtract the amount of cash to be from amountSubtract the amount of cash to be from amount Present deposit to tellerPresent deposit to teller
Using Direct Deposit
Some employers offer a direct deposit plan
Direct Deposit – allows your employer to deposit your paycheck into your accountYou can deposit your paychecks either in
your checking, savings or bothMust complete a direct deposit from with
your employerMoney goes directly in your account
Withdrawing Money from your Savings You can withdraw money out of your savings Follow this steps
Write your name, date, & account number Write amount of money you wish to withdraw Sign your name on withdraw form Present complete withdraw slip to teller with an ID
Savings ClubSavings Club – encourages you to form a
habit of saving money Savings plan You set up an amount of money every week or month You are given a savings club book with your account
number At the end of your savings period, you receive a check
for the amount you saved plus the interest you earned People use savings clubs for Christmas present or
vacations
Certificates of DepositCertificate of Deposit
(CD) – a savings certificate earning a fixed rate of interest that is purchased for a specific amount of money and held for a set period of time Can be bought at a bank You decide how much you want
to purchase & for how long CDs are usually sold for $500
or more Money is held for a set period
of time Interest rates vary
Money Market Accounts
Money Market Account – A type of savings account that is similar to a CD, but has not time period restrictions
U.S. Savings Bonds U.S. savings bond – A certificate of debt issued by
the federal government that serves as a safe and profitable way for citizens to save money way to save because they are issued by the government. If
lost or stolen, they can be replaced Easy way to save and are given at most banks They earn higher interest rates. The longer they are kept,
the more money you make on them When purchased, they must be kept for 6 months
Mutual Funds & Annuities
Mutual Fund – a long term investment that provides a way to invest in stocks and bonds Gives professional
assistance on where to invest your money
Money can rise or fall; takings risks/gamble
Annuity – a form of investment that lasts 10-15 years and provides insurance & savings Similar to life insurance Used for retirement or
future financial security
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