Checking Account

Checking Account Check: written order to a bank to pay a specific amount to a person/business (payee) Canceled check: a check that has cleared the bank’s system Overdraft: a check written/using debit card for more money than what is in your account Floating a Check: writing a check when you know you don’t have enough money in your account, hoping a deposit will clear before the check does

Advantages of a Checking Account • Convenient for paying bills • Safer than cash for major purchases, bills, and mail orders • Built-in record keeping system • Debit Cards • Other services: • Instant loans • Online banking • 24-Hour access (ATMs)

Opening an Account • Make initial deposit • Can be a joint account • Fill out a Signature Authorization Form • Compare signature on card to checks

Factors to Consider when Choosing • ATM Fees • Few branches = fewer ATMs to access • Charge $2-4 per use when out of network • Account Minimum Fee • Fee when balance is below a certain amount • Overdraft Fees • Fee when you overdraft • OR a fee to withdraw the over-drafted amount from Savings

Automatic Bill-Pay • Can list bills to be paid automatically • Allow for lag time • Some banks charge fees for this • Assigned a PIN (Personal Identification Number)

Types of Checking Accounts • An account opened by two or more people “Joint Account” • An account where anyone on the account has the right to the amount deposited if the other individual dies “Survivorship Account” • These accounts have low (or no) average daily balance requirements and no service fees “Share Account”

These accounts have a set monthly service fee if an average minimum balance is not met but no per check fee “Standard Account” • These accounts have flat rate service fees and fees for each check written “Special Account” • These accounts offer interest on the amount in the account as long as the amount does not fall below a minimum average “Interest-Bearing Account”

Tips When Writing Checks • Use pen & write legibly • Do not put extra space between words/numbers • Keep signatures consistent • Avoid mistakes – if a mistake happens: “VOID” • Make sure you have enough money!!

A: Check Number B: Maker (Drawer)’s Name and Address (preprinted) C: Date E: Numeric Amount D: Payee Check #1001 to Wal-Mart on December 1, 2017 for groceries for $25.23 001 B A C December 1, 17 E Wal-Mart D 25. 23/100 Twenty-Five and 23/100 F G H you r signature Groceries J I G: Memo F: Written Amount I: Routing Number (Banks Identification Number) J: Account Number (YOUR bank account number) H: Signature

Depositing Checks and Cash • At the bank with a deposit slip • Through an ATM • Mobile Banking App • Log in • Take pictures of front/back of check

DEPOSIT SLIPS 50 00 150 00 parents IBHS 25 00 December 1, 2017 your signature 225 00 25 00 200 00 • Depositing a 50 bill (cash), a check for $150 from your parents, and a check for $25 from IBHS on Dec. 1, 2017. You want to withdrawal $25 cash. • STEPS: • Enter the Date • Enter any Cash you are depositing • Enter any Checks you are depositing • Total all Deposits • Less cash received? (withdrawing any money?) • Net Deposit (Amount to actually be deposited) • Sign ONLY IF you are withdrawing money (can differ depending on bank)

Endorsing Checks • Signing the back of a check so it may be cashed or deposited • THREE TYPES • Blank Endorsement: signing your name exactly as it is on the front of the check Simon Smith

Pay to the Order • Special Endorsement: transferring the right to cash the check to someone else • Restrictive Endorsement: limiting where the check can be deposited • Put bank account # OR Company Name of Sue Jones Simon Smith For Deposit only CEFCU Acct. # 12345 Simon Smith

Checkbook Register • Booklet used to record all checking account transactions • Keeps a running total of your account balance • Types of Transactions: • Checks • Debit Card purchases • Deposits • Withdrawals (ATM)

 430 56 8-9 1001 405 61 Kroger - groceries 24 95 8-11 Wal-Mart - random 25 97 379 64 8-16 1002 364 64 IBHS 15 00 Paycheck 484 64 120 00 8-19 31 80 8-22 452 84 Casey’s - gas 40 00 412 84 Withdraw 8-29 - - - - 8-29 412 84 VOID 1003 250 00 8-31 662 84 Paycheck Beginning Balance: $430.56 Aug. 9 – wrote a check #1001 to Kroger for $24.95 Sample Transactions Aug. 11 – bought random items at Wal-Mart for $25.97 using your Debit Card Aug. 16 – wrote a check # 1002 to IBHS for $15.00 Aug. 19 – deposited your paycheck of $120.00 Aug . 22 – got gas at Casey’s with your Debit Card for $31.80 Aug. 29 – withdrew $40 from the ATM Aug. 29 – wrote check #1003 but made an error while writing the check so not using the check Aug. 31 – Deposited a check from your parents for $250.00 • Beginning Balance (OR balanced carried over) • Check Number • Date • Transaction Description • Amount of Payment OR Deposit • New running Total

Reconciling Your Bank Account • Matching your checkbook register with the bank statement (or online statement) • Outstanding Debit Card Purchases, Checks, or Deposits: • Any DC purchase, check, or deposit that is recorded in the register but has not yet cleared the bank • Register balance = last line on reconciliation sheet

O     O -- O 477.79 250.00 2017 727.79 #1001 24 95 8/17 WD 40 00 8/19 8/27 64.95 662.84

Checking Account