Checking Account Simulation

Understanding Checking Accounts

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1What is a Checking

Account? Tool used to transfer funds deposited

into the account to make a cash purchase

Could also be named a transaction account

Common financial service used by many consumers

Available at banks

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Checking Accounts

continued Services and fees will vary depending

upon the financial institution Research the financial institution and

type of account before choosing Many financial institutions offer

telephone and internet banking services to customers

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Benefits Can help to manage money Written record of expenses

Check register Makes bill paying more convenient Reduces the need to carry large

amounts of cash Most liquid of cash management tools

Considered cash

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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How Do They Work? Money is deposited into the account

with a deposit slip

Pay the transaction by: Writing a check Using an ATM and/or debit card Using electronic banking

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Characteristics Funds are easily accessible through:

A check Automated teller machine (ATM) Debit card Telephone Internet

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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What is a Check?

Piece of paper pre-printed with the account holder’s: Name Address Financial institution Identification numbers

To completed check, fill in the: Amount Payee

To whom the check was written

Date Signature

Used at the time of purchase as the form of payment

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Bouncing a Check Check written for an amount over the

current balance held in the account ‘Bounces’ due to insufficient funds

Assessed a substantial fee by both the financial institution and the payee

Can cause harm to credit report Financial institutions report to credit

bureaus the account holder’s failure/success to manage his/her checking account properly

Used as a guide for future inquiries for credit

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Other Checking

Components Register

Place to immediately record all monetary transactions for a checking account

Written checks, ATM withdrawals, debit card purchases, deposits, fees, etc.

Checkbook Contains the checks and the register to

track monetary transactions

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

ATM Fees ATMs are owned by different financial

institutions Fees may be charged to the account

for ATM use Fees range from $0.50 to $5.00

Usually free to account holders of the financial institution

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

ATM Card Card given to account holder to make

financial transactions at ATMs In the shape of a credit card, but can

only be used in designated places Must use personal identification

number (PIN) to access the account A protected number given or chosen by

the account holder to allow access to the account

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Types of Accounts

Available Financial institutions offer different

types of checking accounts All have own characteristics Research all of the requirements and

restrictions before opening the account Basic types/guidelines include:

Regular checking Free checking Special checking Interest-Earning checking

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Regular Checking No monthly charge if minimum

balance is maintained No interest is given Unlimited check writing

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Free Checking No charges or fees for using the

account No minimum balance required Unlimited check writing Usually for a specific group:

Students Seniors

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Special Checking Generally for people who write only a

few checks and keep a low balance Basic account which pays no interest Monthly service charge or fee for

each transaction May have restrictions on number of

transactions each month

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Interest-Earning

Checking Pays interest on money in account

Usually the lowest interest rate of all the cash management tools

Minimum balance required Unlimited check writing Called a share draft at credit unions

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Opening a Checking

Account Most applications are completed on a

computer to process quickly Customer may have to complete a brief

hand-written application to be entered into the computer by new accounts personnel

Customer must have: Picture identification Name, address, phone number, and social

security number

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Opening continued If customer is approved, he/she

completes a signature card Contains account information about the

new account and his/her signature Used to verify the signature for each

signed transaction for the account to prevent fraud

Completion of the signature card means the customer agrees to all terms and conditions of the account

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Signature Card example

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Opening continued If offered, customers may choose to

have an ATM and/or debit card for the account May be required to complete another form

An initial deposit must be made Amount will vary among different financial

institutions and type of account

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Ordering Checks New customers are provided starter

checks to use until the ordered checks arrive Generic checks with account number and

financial institution pre-printed Customer information is hand written

Many businesses do not accept starter checks Take this into consideration before making the

initial deposit Ordered checks may take 5 to 10 business days

to arrive

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Ordering continued Personal information on checks

Name Address Optional: phone number, driver’s license

number DO NOT put the account holder’s social

security number on the check for security reasons

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Ordering continued Design of the check is customer’s

choice Customer pays for checks

Price depends on the style Style of the check does not change how a

check works Some financial institutions may offer basic

checks free of charge Single or duplicate checks are available

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Ordering continued

No records of written checks

Each check must be logged in the register immediately to track transactions

Provides a written record of each check with the carbon copy

Convenient in case the check was not recorded into register immediately

Single Duplicate (carbon copy)

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Endorsing a Check Endorsement

Signature on the back of the check from receiving person approving it for deposit

A check must be endorsed to be deposited Three types

Blank Restrictive Special

Safest way to endorse the check is to wait until going to the financial institution to deposit or cash the check

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Blank Endorsement

Receiver of the check signs his/her name

Anyone can cash or deposit the check after has been signed

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Restrictive Endorsement

More secure than blank endorsement

Receiver writes “for deposit only” above his/her signature Allows the check to

only be deposited

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Special Endorsement

Receiver signs and writes “pay to the order of (fill in person’s name)”

Allows the check to be transferred to a second party Also known as a

two-party check

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Making a Deposit Deposit slip

Contains the account holder’s account number and allows money (cash or check) to be deposited into the correct account

Located in the back of the checkbook Complete a deposit slip to make a deposit

Give to financial institution along with cash and/or check

Checks must be endorsed to be deposited Deposited amount must be recorded in the

check register to keep the balance current

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Date The date the deposit is being made

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Signature Line Sign this line to receive cash back

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Cash The total amount of cash being deposited

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Checks List each check individually

Identify each check on the deposit slip by abbreviating the name of the check writer

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Checks If more checks are being

deposited than number of spaces on the front, use the back

List each check Add the total, enter it on

the front

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Total from Other Side The total amount from all checks listed on

the back

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Subtotal The total amount of cash and checks

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Less Cash Received The amount of cash back being received This amount is not deposited into account

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Completing a Deposit

Slip

Net Deposit The amount being deposited into the account To calculate the amount, subtract the cash received

from the subtotal

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check To pay for items using a checking

account A check is given as a form of payment Must be completed and given to the

person or business Pre-printed items on a check

Name and address of account holder Name and address of financial institution Check number Identification numbers (account, routing)

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Personal Information Account holder’s name and address May include a phone number, not required DO NOT list a social security number for safety reasons

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Check Number Numbers used to identify checks Printed chronologically

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Date The date the check is written

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Pay to the Order of The name of the person or business to

whom the check is being written

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Amount of the Check in Numerals The amount of the check written numerically in the box Write the cents smaller and underline Write the numbers directly next the dollar sign to prevent

someone else from adding numbers to change the amount

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Amount of the Check in Words The amount of the check written in words on the second line Start at the far left of the line, write the amount in words,

followed by ‘and’, and the amount of cents over 100; draw a line from the end of the words to the word ‘dollars’

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Memo Space used to identify the reason for writing a check;

optional Good place to write information requested by a company

when paying a bill, generally the account number

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Signature The account holder’s signature agreeing to the

transaction

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Writing a Check

Identification Numbers First - routing numbers to identify the account’s financial

institution Second - account number Third - check number

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check 21 Check Clearing for the 21st Century

Act (Check 21) Current trend that changes how money is

withdrawn from customers account and deposited into businesses account

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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How Check 21 Works Prior to Check 21

Paper checks physically moved from customer to business to various banks and the transfer of money from customer’s bank to business’ bank took days

After Check 21 Paper checks are scanned into a computer

system at the place of business and immediately returned to the customer. This electronic copy of the check is called a substitute check. The substitute check is then transferred electronically to various banks and the transfer of money customer’s bank to business’ bank takes hours

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register Place to immediately record all

monetary transactions for a checking account

Written checks, ATM withdrawals, debit card purchases, deposits, fees, etc.

Used to keep a running balance of the account

Remember - Record every transaction!

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

Date The date the check was written or

transaction was made

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

Number The number of the written check; if a debit

card or ATM was used, write DC or ATM

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

Description of Transaction The person/business the check was written to or

where the debit card was used Gray line can be used to write the memo

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

Payment/Debit(-) Amount of the transaction Deducted from the balance

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

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Check Register

Deposit/Credit(+) Amount of the transaction Added to the balance

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

√ T A box used to track whether the check has cleared

on the monthly bank statement when reconciling at the end of each month

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

Fee (if any) Any extra fees charged to the account Listed on the bank statement

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Check Register

Balance The running total of the checking account Calculated by adding or subtracting each transaction Keep this updated

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Monthly Statement Lists each monetary transaction and the

current account balance for a specified time period

Includes: Dates Identification for each transaction (number

or type, date, amount) Transaction amounts for withdrawals and/or

deposits Interest earned (if applicable) Fees or charges (if applicable)

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Monthly Statement

continued If customer holds more than one

account at the same financial institution May receive one statement

for both For example: a checking

and a savings account May be mailed separately

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Reconciling a Checking

Account Reconcile

Balance the checkbook register each month to the balance shown on the statement

Do this every month to ensure the correct balance in the checkbook Knowing the correct balance can help to

avoid bouncing checks

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Steps for Reconciling Make sure every transaction listed on the

statement matches the check register Place a check next to each item once it has

been double-checked between the statement and register Do this for both withdrawals and deposits

Identify any outstanding transactions in the check register Items which have not cleared through the

financial institution and are not listed on the statement

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Steps for Reconciling

continued Start with checking account balance

on the statement Add any outstanding deposits Subtract any outstanding withdrawals Compare this result with the current

balance in the check register They should be the same

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Reconciling Example Statement balance

$204.00 Add $154.01+

Outstanding deposits 8/30 - $154.01

Subtract $44.75- Outstanding withdrawals

#299 - $19.75 #300 - $25.00

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1Reconciling Example

continued Total $313.26

Remember - this figure should be the same as the check register

If not, double-check the math, look for mistakes Make sure all service fees and charges

have been added to the check register

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Checking Account Safety If a checkbook, ATM, and/or debit

card becomes lost or stolen Immediately report it to the financial

institution File a report with the police

Reported lost/stolen checkbook: Financial institutions generally do not

hold the account holder liable for any fraudulent charges

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

Safety continued Reported lost/stolen ATM/debit card:

Within 2 business days Cardholder is only liable for $50.00

Longer than 2 business days Could be liable for up to $500.00

Varies depending upon the financial institution

May not charge the account holder anything if the correct steps were taken to report the lost/stolen card

© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Checking Account SimulationFunded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University – Bozeman

1.7.1.G1

ConclusionResearch before choosing a financial

institution and checking account!

Follow the precautions to prevent checking account fraud!

Report a lost/stolen checkbook, ATM, and/or debit card immediately!