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Click here to advance to the next slide. Read to Learn. Discuss the different types of checking accounts and how they work. Discuss other services and offerings that banks provide checking account holders. The Main Idea.

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Read to Learn

  • Discuss the different types of checking accounts and how they work.

  • Discuss other services and offerings that banks provide checking account holders.


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The Main Idea

Checking accounts are tools that many people use to make payments. A checking account provides a way for consumers to manage their spending, make payments easily, and keep track of their funds. When they have a checking account, customers can access information online through the bank’s Web site.


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Key Concepts

  • How Checking Accounts Work

  • Account Services and Other Offerings


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Key Terms

a written order directing a bank or other financial institution to pay money on demand to the person or company named on it

check


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Key Terms

electronic transfers of payments directly from the payer’s account to the account of the person being paid

directdeposit

interestbearingaccount

an account that earns interest on the balance for the depositor


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Key Terms

electronic transfers of payments directly from the payer’s account to the account of the person being paid

directdeposit

interestbearingaccount

an account that earns interest on the balance for the depositor


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Key Terms

signaturecard

a record of an account holder’s signature used to verify identity

an account holder has written checks for more money than the balance in the account

overdrawn


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Key Terms

overdraftprotection

a line of credit for overdrawn checks

stoppayment

an order for a bank not to cash a particular check


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Key Terms

a bank card that immediately takes money from a checking account when it is used

debitcard


How checking accounts work

How Checking Accounts Work

A check is a common medium of exchange, or way to make payments for goods and services.

check

a written order directing a bank or other financial institution to pay money on demand to the person or company named on it


How checking accounts work1

How Checking Accounts Work

A customer opens a checking account by depositing money into a bank.

The bank provides a checking account customer with paper checks.


Writing and cashing a check

Writing and Cashing a Check

Figure 29.1


Writing and cashing a check1

Writing and Cashing a Check

Figure 29.1


How checking accounts work2

How Checking Accounts Work

The payee can either deposit the check or cash it.

Once the money is paid, the check writer’s bank voids the check.


Types of accounts

Types of Accounts

Most banks offer several types of checking accounts.

Shop around and compare financial institutions and the services they have to offer.


Regular checking account

Regular Checking Account

A regular checking account is designed for customers who write a few checks each month and do not keep a minimum amount of money in the account.


Regular checking account1

Regular Checking Account

Direct deposit is one of the services available to customers with a regular checking account.

direct deposit

electronic transfers of payments directly from the payer’s account to the account of the person being paid


Interest bearing accounts

Interest-Bearing Accounts

Most banks offer interest-bearing accounts.

interest-bearing account

an account that earns interest on the balance for the depositor


Joint accounts

Joint Accounts

A joint account allows people who are equally responsible for the account to write checks.

Joint accounts are usually used by married couples or businesses with more than one owner.


Checking account security

Checking Account Security

Once you decide what type of account you want, you must fill out a signature card at the financial institution.

signature card

a record of an account holder’s signature used to verify identity


Checking account security1

Checking Account Security

Your financial institution will ask you to provide your address, phone number, and the answer to a security question.

The bank assigns you a checking account number and issues you a book of checks.


Account services and other offerings

Account Services and Other Offerings

An overdraft is the amount of money that is overdrawn from your checking account.

overdrawn

the account owner has written checks for more money than the balance in the account


Account services and other offerings1

Account Services and Other Offerings

Banks may charge a fee for overdraft protection.

overdraft protection

a line of credit for overdrawn checks


Account services and other offerings2

Account Services and Other Offerings

Banks usually charge a fee for a stop payment.

stop payment

an order for a bank not to cash a particular check


Account services and other offerings3

Account Services and Other Offerings

A debit card is used like a credit card.

debit card

a bank card that immediately takes money from a checking account when it is used


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You purchased a digital video camera using a check. You began to regret the purchase and called the store to inquire about returns. The manager told you that there are no returns on the item you bought unless it was defective.

Decision Making Should you call your bank and stop payment on the check you used for the purchase? Explain your answer.


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Answer

Answers should address the issue of what it means to stop payment on a check. It is not an appropriate practice to use to resolve issues of this type.


Online banking

Online Banking

You can use an Internet browser on your computer to handle online banking.

Personal finance software allows you to store information about your transactions for your records.


Graphic organizer

Graphic Organizer

Check Account Balances

Transfer Money

What You Can Do with Online Banking

Pay Bills

Check Account Status 24 Hours a Day

Save Time and Money

Schedule Automatic Payment


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E-Banking

E-banking, or online banking, is becoming more popular worldwide, but the United States still relies heavily on paper checks. A recent survey revealed that of all the households that are on the Internet, only one in five also do their banking online.


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  • How does a checking account work?

A customer deposits money into a checking account and receives a book of checks to use for payments and purchases. The person can cash or deposit checks.


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  • What are the three main types of checking accounts?

regular checking accounts, interest-bearing accounts, and joint accounts


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  • Discuss some additional services and offerings that banks provide checking account holders.

Overdraft protection is a line of credit for overdrawn checks. Banks also will allow a stop payment, an order for a bank not to cash a particular check. Debit cards are also offered.


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