Transcript Ch9 notes_checking accountsx

Checking Accounts
Chapter 9
Basics
• Check:
▫ Written order to bank to pay the amount stated to the
person or business named on it.
• Demand deposit:
▫ Money may be withdrawn at any time.
Basics
• Process:
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You write a check.
The payee cashes your check.
The bank that cashed the check returns it to your bank.
The bank withdraws money from your account and
sends it to the bank that cashed the check.
▫ Your bank then stamps the back of your check,
indicating that it has a check that has cleared your
account.
• Canceled Check: a check that has cleared your
accounts. Can be used as proof of payment.
Advantages of Checking Account
1. Provides a convenient way to pay bills.
2. Safer than using cash, especially when
making major purchases.
3. Built-in record keeping system that you can
use to track expenses and create budgets.
4. Gives you access to other bank services, such
as loans, online banking, and 24-hour access
to your money through ATMs.
Opening a Checking Account
• You must fill out and sign a signature
authorization form.
• Provides an official signature that the bank
can compare to the signature you write on
the check.
Parts of Check
• Check Number
• Numeric Amount
• ABA Number
• Written Amount
• Name and Address of
• Signature
Maker
• Date
• Payee
• Account and Routing
Numbers
• Memo
Writing Checks
• Always use pen (blue or black).
• Write legibly.
• Sign name the same as on signature card.
• Avoid mistakes. (VOID)
• Make sure you have adequate funds.
Why Paying Bills Online?
• Safer than sending checks in mail.
• Faster than mailing.
• Convenient
• Saves money for postage and costs of
checks.
Paying Bills Online
Choice #1
• Can register at website of
business to which you will
be making payments.
• You can authorize
payments.
Choice #2
• Can pay bills from your
own account.
• Register at your bank’s
website.
• Some banks charged
monthly fee.
Making Deposits
(use Internet)
1. Date of transaction.
2. Cash Section: write amount of $ you are depositing
3. Checks Section: write amount of check along with ABA
number.
4. Total the currency, coin, and check amounts. Write figure
on “subtotal” line.
5. If you wish to receive some cash, complete “Less Cash
Received” line
6. Complete “Net Deposit”
7. If you receive some cash, “Sign Here for Less Cash
Received”
8. The teller will give you copy of deposit slip or receipt.
Checkbook Register
• Definition: booklet used to record
checking account transactions.
Reconciling Your Account
• Bank Reconciliation: the process of
matching your checkbook register with the
bank statement
Endorsing Checks
1. Blank Endorsement
 Only the signature of the payee
2. Special Endorsement
• Transfers the right to cash the check to
someone else.
• “Pay to the order of…”
3. Restrictive Endorsement
• Limits to the use of the check.
• “For deposit only…”
Types of Checking Accounts
1. Joint Accounts
 Opened by 2 or more people.
 Any person who signs the account has the right
to the amount deposits.
2. Interest Bearing Accounts
• Can earn interest.
• Must maintain a minimum balance
Banking Services
• Money Orders
• Debit Cards
• Online and Telephone
Banking
• Bank Credit Cards
• Stop Payment Orders
• Overdraft Protection
• Safety Deposit Boxes
• ATMs
• Loans and Trusts
• Notary Public
• Financial Services
Banking Fees
• Monthly Service Fees
• Overdraft Fees
• NSF check charges
• ATM fees
• Safe deposit box fees