Banking: 101Banking: 101

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Checking AccountChecking Account What is a Checking Account?

• An account where money is deposited and kept for day-to-day expenses

• Also called demand deposit because the money can be withdrawn on demand

How can money be withdrawn from a checking account?

• In person• Check Card• ATM Card• Cash back at stores• Checks• Direct Payment• Checks

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Canceled vs. Stop PaymentCanceled vs. Stop Payment

What is a canceled check?What is a canceled check?A canceled check is a check that bears theA canceled check is a check that bears thebank’s stamp. You can use your canceledbank’s stamp. You can use your canceledchecks as proof of purchase or of payment if achecks as proof of purchase or of payment if aDispute arises.Dispute arises.

What is a stop payment order?What is a stop payment order?A stop payment order is a request that the bankA stop payment order is a request that the banknot cash a specific check. The usual reason fornot cash a specific check. The usual reason forstopping payment is that the check has been loststopping payment is that the check has been lostor stolen. Most banks charge a fee for thisor stolen. Most banks charge a fee for thisservice.service.

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Bouncing a CheckBouncing a CheckA check written for more money than your accountA check written for more money than your account

contains is called an contains is called an overdraftoverdraft. A financial institution. A financial institution

receiving an overdraft usually stamps the check withreceiving an overdraft usually stamps the check with

the words “the words “not sufficient fundsnot sufficient funds” NSF ” NSF and returnsand returns

the check to the payee or at the payee’s institution.the check to the payee or at the payee’s institution.

The check is considered “The check is considered “bouncedbounced.” The bank and.” The bank and

the place where the check was written will boththe place where the check was written will both

charge a fee.charge a fee.

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WARNING: You are floating a check when you realize your account contains insufficient funds but you write a check anyway hoping that a deposit will clear before the check is cashed.

http://banking.about.com/od/checkingaccounts/a/floatingchecks.htm

WARNING: You are floating a check when you realize your account contains insufficient funds but you write a check anyway hoping that a deposit will clear before the check is cashed.

http://banking.about.com/od/checkingaccounts/a/floatingchecks.htm

Online Bill PayOnline Bill Pay The bank pays your bills The bank pays your bills

for youfor you Anyone, anytime, Anyone, anytime,

anywhere in the U.S.anywhere in the U.S. Set up recurring Set up recurring

payments to be payments to be automatically made automatically made

Receive email reminders Receive email reminders when bills are duewhen bills are due

Sign up for E-Billing to get Sign up for E-Billing to get bills electronically bills electronically delivereddelivered

Keep all bill payment Keep all bill payment history in the same placehistory in the same place

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Online BankingOnline Banking Available 24/7 with an Available 24/7 with an

Internet connectionInternet connection Access and manage Access and manage

your bank accounts your bank accounts and credit cardsand credit cards

Keep an eye on Keep an eye on recent transactionsrecent transactions

Transfer funds Transfer funds between accountsbetween accounts

View current and past View current and past statements statements

View check and View check and deposit slip copies deposit slip copies

Download Download transactions into transactions into money management money management documentsdocuments

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Additional ServicesAdditional Services

Wire Transfers

Direct Deposits (paycheck to bank)

Certificates of Deposit (investments)

Safe Deposit Boxes (for jewelry, collectibles, birth & marriage certificates—not for cash)

Foreign Currency Exchange

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Money OrdersMoney OrdersMoney orders are sold by banks to people who

do not wish to use cash or do not have a checking account.

A money order is like a check, except that it can never bounce.

There is a charge for purchasing a money order.

You can get these through post office and local merchants.

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Other Types of ChecksOther Types of Checks A A certified check certified check is a personal is a personal

check that the bank guarantees or check that the bank guarantees or certifies to be good. certifies to be good. Sometimes a payee might want you Sometimes a payee might want you

to get your personal check certified to get your personal check certified to reduce the risk of accepting your to reduce the risk of accepting your check in payment.check in payment.

A A cashier’s check cashier’s check also called a also called a bank draft is a check written by a bank on its own funds. You can pay for a cashier’s check

through a withdrawal for your savings or checking account, or in cash.

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Bank FeesBank FeesBank charge fees to their customers to help cover

their operating costs. For example, when a bank grants you a loan, it charges

you a loan fee. When the bank acts as a trustee, it charges a fee for

this service. Banks also charge non-customers for services such as

check cashing.

Banks make a lot of money from fees. Overdrafts, NSF checks, balances that fall below the

stated minimum, cashiers and certified checks, travelers’ checks, use of other banks’ ATM’s, online bill payment and monthly account servicing.

Shop around to find the bank that offers you the best services that you will use at free or the lowest prices.

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Making a DepositMaking a Deposit

1.1. Your account numberYour account number

2.2. Today’s dateToday’s date

3.3. CASH = Total currency CASH = Total currency and coin that is to be and coin that is to be depositeddeposited

1.1. Your account numberYour account number

2.2. Today’s dateToday’s date

3.3. CASH = Total currency CASH = Total currency and coin that is to be and coin that is to be depositeddeposited

1.1. List deposited checks separatelyList deposited checks separately

2.2. Total Deposit = Cash + ChecksTotal Deposit = Cash + Checks

3.3. Indicate if you want cash backIndicate if you want cash back

4.4. Net Deposit = Total Deposit – Cash Net Deposit = Total Deposit – Cash backback

1.1. List deposited checks separatelyList deposited checks separately

2.2. Total Deposit = Cash + ChecksTotal Deposit = Cash + Checks

3.3. Indicate if you want cash backIndicate if you want cash back

4.4. Net Deposit = Total Deposit – Cash Net Deposit = Total Deposit – Cash backback

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Writing a CheckWriting a Check

1.1. Check numberCheck number

2.2. Today’s dateToday’s date

3.3. PayeePayee

4.4. Amount of the check in numbersAmount of the check in numbers **Write as close as possible to**Write as close as possible to the dollar sign so that additional the dollar sign so that additional numbers cannot be added.numbers cannot be added.

1.1. Check numberCheck number

2.2. Today’s dateToday’s date

3.3. PayeePayee

4.4. Amount of the check in numbersAmount of the check in numbers **Write as close as possible to**Write as close as possible to the dollar sign so that additional the dollar sign so that additional numbers cannot be added.numbers cannot be added.

5.5. Amount of the check in wordsAmount of the check in words **Start at the left edge of the **Start at the left edge of the

line directly below “pay to the line directly below “pay to the

order of.” Draw a line between order of.” Draw a line between

the amount and the word “dollars.”the amount and the word “dollars.”

6.6. Your signatureYour signature

7.7. Reminder of what the check paidReminder of what the check paid

8.8. Your account numberYour account number

5.5. Amount of the check in wordsAmount of the check in words **Start at the left edge of the **Start at the left edge of the

line directly below “pay to the line directly below “pay to the

order of.” Draw a line between order of.” Draw a line between

the amount and the word “dollars.”the amount and the word “dollars.”

6.6. Your signatureYour signature

7.7. Reminder of what the check paidReminder of what the check paid

8.8. Your account numberYour account number

**Never use **Never use pencilpencil

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Debit CardsDebit Cards Money comes from Money comes from

checking account checking account Also called ATM or Also called ATM or

Electronic Funds Electronic Funds Transfer (ETF)Transfer (ETF)

Make purchases Make purchases anywhere that anywhere that accepts Visaaccepts Visa®® or or MastercardMastercard®®

Get cash at ATMs all Get cash at ATMs all over the worldover the world

Make Internet and Make Internet and telephone purchasestelephone purchases

Get cash back at Get cash back at participating storesparticipating stores

Money comes from Money comes from checking account checking account

Also called ATM or Also called ATM or Electronic Funds Electronic Funds Transfer (ETF)Transfer (ETF)

Make purchases Make purchases anywhere that anywhere that accepts Visaaccepts Visa®® or or MastercardMastercard®®

Get cash at ATMs all Get cash at ATMs all over the worldover the world

Make Internet and Make Internet and telephone purchasestelephone purchases

Get cash back at Get cash back at participating storesparticipating stores

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Check CardsCheck Cards

Enter PINEnter PIN Swipe cardSwipe card Choose debitChoose debit Enter your PINEnter your PIN

Sign the ReceiptSign the Receipt Swipe card Swipe card Choose creditChoose credit Sign the receiptSign the receipt

Two ways to make Two ways to make purchases:purchases:

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ATM & PINATM & PIN What is an ATM?What is an ATM?

Automated Teller Automated Teller MachineMachine

Make transactions Make transactions without human without human interactioninteraction

Withdrawals, deposits, Withdrawals, deposits, money transfers, money transfers, balance inquiries, and balance inquiries, and check imagingcheck imaging

What is a PIN?What is a PIN? Personal Identification Personal Identification

NumberNumber 4-digit number used to 4-digit number used to

access various accountsaccess various accounts Able to change PIN at Able to change PIN at

most ATMsmost ATMs

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Using the ATMUsing the ATM Available 24/7Available 24/7 ATM transactions are ATM transactions are

usually free at your usually free at your bank’s ATMsbank’s ATMs

Service fees for non-Service fees for non-customers at most customers at most ATMsATMs

Watch for higher ATM Watch for higher ATM fees at some placesfees at some places Convenience StoresConvenience Stores CasinosCasinos

ATMs show the ATMs show the available balance which available balance which may be different from may be different from your actual balanceyour actual balance

Be sure to record all Be sure to record all transactions, transactions, withdrawals, and fees in withdrawals, and fees in account registeraccount register

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Card & Pin SafetyCard & Pin Safety Card SafetyCard Safety

Always sign the backAlways sign the back Never let anyone use Never let anyone use

cardcard Be sure to get it back Be sure to get it back

after each useafter each use Keep receipts of all Keep receipts of all

transactionstransactions Do not carry extra Do not carry extra

credit cards or SSN credit cards or SSN card in walletcard in wallet

Immediately report Immediately report lost or stolen cardslost or stolen cards

Pin SafetyPin SafetyNever tell anyone your PINNever tell anyone your PIN Guard PIN at ATMS and Guard PIN at ATMS and

cash registerscash registers Never write PIN Never write PIN

anywhere in purse or anywhere in purse or wallet wallet

Banks never ask for Banks never ask for check card PINcheck card PIN

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Account RegisterAccount Register

1.1. Check number or transaction typeCheck number or transaction type2.2. Date the transaction was madeDate the transaction was made3.3. Payee and memoPayee and memo4.4. Amount of the transactionAmount of the transaction

**New Balance = Previous Balance – Amount of Transaction**New Balance = Previous Balance – Amount of Transaction5.5. Amount of the depositAmount of the deposit

**New Balance = Previous Balance + Amount of Deposit**New Balance = Previous Balance + Amount of Deposit

**Record all transactions when made**Record all transactions when made

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Savings and Money Market Savings and Money Market AccountsAccounts

What is a Savings What is a Savings Account?Account? Interest-bearing account Interest-bearing account Used to save moneyUsed to save money Minimum balance Minimum balance

required required Limited number of Limited number of

withdrawalswithdrawals

What is a Money Market What is a Money Market Deposit Account?Deposit Account? Interest-bearing accountInterest-bearing account Limited check writingLimited check writing Requires a higher Requires a higher

minimum balanceminimum balance Most banks charge fees Most banks charge fees

on these accounts if the on these accounts if the balance goes below a balance goes below a specified levelspecified level

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Sample Bank Service Rates