Post on 02-Nov-2014
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CHECKING ACCOUNTS
Personal Money Management
Advantages
Convenient way to pay bills
Often safer than using cash
Record keeping system to track expenses and create budgets
Access to other bank services such as direct deposit, online banking, use of a debit card, and 24/7 access to cash through ATMs
Your Responsibilities
Write checks carefully and keep accurate records of checks written and deposits made.
Verify the accuracy of the bank statement you receive each month.
Keep canceled checks among your permanent records.
Types of Accounts
Joint accounts
Express accounts
Basic accounts
Interest bearing accounts
Senior/Student accounts
Joint Account
Opened by two or more people
Any person who signs on the account has the right to the entire amount deposited
“Or” account – any authorized account holder can write checks
“And” account – requires signature of both owners on checks
Express AccountsKey Bank - Express Account
For those who prefer to do things at an ATM or computer
Low minimum balance requirements
Low or no monthly fees
Must pay fees to visit a teller (Could be as high as $3/visit)
This type is good for those who have direct deposit or use ATMs for withdrawals and transactions
Basic Accounts
For those who have minimal banking needs (perhaps pay a few bills or use debit card here and there)
May require direct deposit or minimum balance to avoid “maintenance fees”
You may be limited to the number of checks or transactions each month; go over and you’ll pay a “per item fee”
Interest Bearing Accounts
A checking account in which you can earn interest on the money in the account.
Usually a minimum initial deposit to open the account.
Account balances must not fall below the minimum balance set by the bank or you will have to pay fees.
Interest rates given are often very, very low (and may not be worth the balance requirements).
Senior/Student Accounts
Banks will often provide special perks for certain age people.
These perks will vary from bank to bank, but can include free ATM use, free checks, discounts, etc.
Parts of a Check
• Check number• ABA routing
number (fraction)• Maker’s name and
address• Date• Payee
• Numeric amount• Written amount• Maker’s signature• Routing number• Account number• Memo
Parts of a Check
Check Number – used for easy identification; top right hand corner of the check
ABA Routing Number – fraction in the upper right hand corner of check
Used for internal transaction purposes “Old school” method – now just used as
backup option in case other routing number can’t be read or is torn
Parts of a Check
Date – fill in the date you write the check Usually towards the top, in the center of the
check Postdating of checks is not
recommended: Banks will not cash it before that date Bank may charge a fee for holding it Bank may not accept a check over six months
old
Parts of a Check
Payee – the person or company to whom the check is made payable
Numeric Amount – The amount of dollars and cents being paid in figures.
Write the amount neatly and clearly, close to the dollar sign and make sure you insert a decimal point between dollars and cents.
Parts of a Check
Written Amount – The amount being paid in words.
Write the word “and” to separate dollars and cents. This takes the place of the decimal point.
Use a fraction for the amount in cents. Example: 12/100
Draw a line from the cents to the word “dollars”
Parts of a Check
Maker’s Signature – gives authorization for the written check. Written in the lower right of a check.
Routing Number – Bank identification number created to help facilitate processing of checks. Located in the lower left hand corner (the left-most number between the colon symbols)
Account Number – your personal checking account number. (Lower left hand corner – the number on the right)
Parts of a Check
Memo – place at the bottom left of a check for the maker to write the purpose of a check.
Does not need to be filled in. Optional.
When paying bills companies often ask you to write your account number there.
Endorsing a Check
A check cannot be cashed until it has been endorsed (signed)
When two or more people are named as payees, all must endorse the check
To endorse a check, the payee signs the back of the check in blue or black ink
Types of Endorsement
Blank Endorsement – the signature of the payee written exactly as his or her name appears on the front
If the name is incorrect on the front, you would correct the mistake by endorsing the check with the misspelled version first, then with the correct version below it
Donald McLainDonald MacLane
Types of Endorsements
Special Endorsement – aka an endorsement in full, is an endorsement that transfers the right to cash the check to someone else
Pay to the order ofDiane Jones
Donald MacLane
Types of Endorsements
Restrictive Endorsement – limits the use of the check.
Example: “For Deposit Only” limits it to a deposit into the account specified
Safer than blank endorsement in mailing deposits, in night deposit systems, or other circumstances where a check may be lost.
Restrictive Endorsement
For Deposit OnlyUnited California Bank
Acct. # 8-2011-4Donald MacLane
How to Prepare a Check
How would you write your check differently?
How would you write your check differently?