Checking Accounts

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Checking Accounts

  1. 1. OPENING A CHECKING ACCOUNT
  2. 2. Terms <ul><li>Check- a written order to a bank to pay the stated amount to the person (payee) named on it </li></ul><ul><li>Demand deposit – a checking account is also called a demand deposit because the money can be withdrawn at any time – “on demand” </li></ul>
  3. 3. More Terms <ul><li>Cancelled check – a check that bears the bank’s stamp indicating that it has cleared (been paid). Cancelled checks can be used as proof of purchase or payment. </li></ul><ul><li>Overdraft – A check written for more money than your account contains </li></ul>
  4. 4. More Terms <ul><li>Floating a check – when you write a check knowing that you do not have funds, hoping that a deposit will clear before the check is cashed. </li></ul><ul><li>Reconciliation – process of matching your checkbook register with the bank statement </li></ul>
  5. 5. Advantages of a Checking Account <ul><li>Convenience </li></ul><ul><li>Safety </li></ul><ul><li>Proof of Payment </li></ul><ul><li>Record of Finances </li></ul>
  6. 6. Types of Checking Accounts <ul><li>Regular Checking Accounts </li></ul><ul><ul><li>Usually no service charge if balance does not fall below minimum balance </li></ul></ul><ul><ul><li>Sometimes no charge if customer has savings account with set balance </li></ul></ul><ul><ul><li>Some banks waive fees for customers over 55 years old. </li></ul></ul>
  7. 7. Types of Accounts (Cont.) <ul><li>Interest Checking Accounts </li></ul><ul><ul><li>Usually require minimum balance to earn interest </li></ul></ul><ul><ul><li>May add service charge if balance drops </li></ul></ul><ul><ul><li>Interest rates vary depending on economic conditions </li></ul></ul>
  8. 8. Types of Accounts (Cont.) <ul><li>Other Types of Checking Accounts </li></ul><ul><ul><li>Special checking accounts if you only write 2 or 3 checks per month </li></ul></ul><ul><ul><li>Credit Unions provide check services. Members are called shareholders. Checks are called sharedrafts. </li></ul></ul>
  9. 9. Opening a Checking Account <ul><li>Signature card - bank’s official record of your signature </li></ul><ul><ul><li>Joint Account - When two or more people have an account together </li></ul></ul><ul><ul><li>Signature card for a business would show business name and signature of those authorized to sign the checks. </li></ul></ul>
  10. 10. <ul><li>Making the First Deposit </li></ul><ul><ul><li>Fill out a deposit slip - form on which you list all items you are depositing </li></ul></ul><ul><ul><ul><li>currency </li></ul></ul></ul><ul><ul><ul><li>coins </li></ul></ul></ul><ul><ul><ul><li>checks </li></ul></ul></ul>
  11. 11. Endorsing Checks for Making Deposits <ul><li>Purpose of endorsements </li></ul><ul><ul><li>Allow recipient of the check to cash, deposit, or transfer it to someone else </li></ul></ul><ul><ul><li>Serve as legal evidence that the receiver cashed or transferred the check to someone else </li></ul></ul><ul><ul><li>Means that the endorser will pay the check in case the next owner of the check cannot collect the money </li></ul></ul>
  12. 12. <ul><li>Placement of Endorsements </li></ul><ul><ul><li>Federal government has guidelines for banks </li></ul></ul><ul><ul><li>Float - time between receipt of the deposit and its availability of funds to the depositor </li></ul></ul><ul><ul><li>Special place on back of check for endorsement - 1 1/2” space on left side of check. </li></ul></ul>
  13. 13. Types of Endorsements <ul><li>Blank Endorsement </li></ul><ul><ul><li>Consists only of the endorser’s name </li></ul></ul>Debbie Block
  14. 14. <ul><li>Special Endorsement </li></ul><ul><ul><li>Also called full endorsement </li></ul></ul><ul><ul><ul><li>“Pay to the Order of . . .” followed by signature of owner of check </li></ul></ul></ul>Pay to the order of Mr. Bill Smith Debbie Block
  15. 15. <ul><li>Restrictive Endorsement </li></ul><ul><ul><li>Limits the use of the check to the purpose given in the endorsement. </li></ul></ul><ul><ul><li>“For deposit only” above your signature. </li></ul></ul>For Deposit Only Debbie Block
  16. 16. Recording the Deposit <ul><li>Banks will give receipt. May make deposit at ATM or through mail. </li></ul><ul><li>Record deposit into check book register or check stub. </li></ul><ul><ul><li>Register is a forms on which a depositor writes a record of deposits made and checks written </li></ul></ul>
  17. 17. <ul><li>THE END </li></ul>

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