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Modern Banking Services and Payment Methods Explained

Learn about currency, checks, credit, and electronic banking. Understand how to use debit cards, ATMs, and manage a checking account effectively.

bethany-russo
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Modern Banking Services and Payment Methods Explained

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  1. Chapter 7 Banking Services

  2. How do people pay for items? • Currency • Paper money and coins • Checks • Order to a bank to pay a specific sum to the person of business named on the check (payee) • Credit • Borrowing money to buy things now (buy now, pay later)

  3. Checking accounts • A bank account that allows depositors to write checks to make payments • Make payment by writing checks • Cash or deposit checks • Transfer money and checks • Use debit cards & ATMs • Opening a Checking Account • Over 18 or joint account? • Interest-bearing or Noninterest-bearing? • Fees – maintenance, service charges? • Application, signature card, initial deposit

  4. Deposit Slips

  5. Deposit slips

  6. Endorsing Checks • What is the purpose of endorsing? • To accept the transfer of someone else’s money to you. • When must you endorse? • Cash a check • Deposit a check

  7. Writing a Check

  8. Writing a check

  9. Using Debit Cards • Connected to checking account • Like writing a check • Money is taken out of checking account

  10. Using a Check Register Sally recording a check (#301) that she wrote to Gas N’ Go for the amount of $15.78. She subtracted that amount from her balance of $204.00 to get a new balance of $188.22.

  11. What to record on a check register... • Deposits • Checks • Debit Card Purchases • ATM Transactions • Fees • Interest

  12. Why use a check register? • Record/have record of your transactions. • Record transactions • Record fees • Record interest • Calculate new balance • Prevent overdrawing • Writing a check for more than you have in your account • Check will “bounce” • Bank will charge you a fee

  13. Bank Statements • Receive at the end of each month • Shows transactions, fees, and interest that have been recorded by the bank • Balancing or Reconciling • Compare your records to the banks records • Use the “√” column of your register • Check for bank errors

  14. Electronic Banking • Electronic Funds Transfer • Move $ from one account to another by computer • EFTs commonly made through… • ATM (automated teller machines) • Direct Deposits • Automatic Bill Payments • Online Banking

  15. Automated Teller Machines • Computer terminal… • Make deposits • Withdraw cash • Transfer money • Check account balances • Pay some bills • Must have ATM card & pin number • Be aware of fees • Using “foreign bank” ATMs can lead to double fees

  16. Responsibility • Laws protect consumers but require them to use EFTs responsibly • Lose ATM card • Report loss within 2 business days of loss or after receiving statement • Liability limited to $50 • Report within 60 days • Liability up to $500 • Report after 60 days • Responsible for ALL losses

  17. Other EFTs • Direct Deposit • Debit Cards • Aka “check cards” • Balance of checking account is immediately checked • Automatic Bill Payments • By Phone or Internet • Automatic Bill Withdrawals • Online Banking

  18. Other Banking Services • Checks • Certified • Cashier’s • Money Orders • Traveler’s Checks • Why • Accepting personal checks can be risky for businesses • No guarantee check will clear (i.e. will there will be enough money in person’s account to cover check?)

  19. Checks… • Certified Checks • Personal check that has been stamped and signed by a bank officer • Bank withdraws the $ from your account to cover the check and any fees; sets it aside for the payee • Fees - $5 to $20 • Cashier’s Checks • Bank’s own check signed by the bank’s cashier • Banks name on check, NOT yours • You pay the bank the amount that the check is being written for plus the fee ($25) • Cash or automatic withdrawal from account

  20. Checks • Money Orders • Like a cashier’s check • 2 main differences • Your name on the check • Can get other places than a bank • Post office, check-cashing business, Western Union, bank • Traveler’s Check • For travel purposes; denominations of $20, $50, $100 • Pay for in advance (including small fee 1%) • Replaced if lost or stolen

  21. Other Services • Wire Transfers • Large transfers of money between distant locations • Moves $ from an account in one bank to an account in another • Fee of $20-$40 • Safe Deposit Boxes • Locked boxes that are rented from a bank • Keep valuable items • Costs $30 to $50/year

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