This document is a chapter from a textbook about checking accounts and banking services. It contains 36 slides that cover topics like opening a checking account, using checks, reconciling accounts, banking fees and services. The key points are that a checking account allows customers to write checks to make payments, banks offer many services like ATMs, online banking and loans, and banks charge fees to cover their operating costs. Customers can avoid fees by choosing the right account type.

1. © 2010 South-Western, Cengage Learning
Chapter
© 2016 South-Western, Cengage Learning
5.1 Checking Accounts
5.2 Banking Services and Fees
Checking and
Banking
5
© 2016 South-Western, Cengage Learning

2. © 2010 South-Western, Cengage Learning SLIDE 2
Chapter 5
Lesson 5.1
Checking Accounts
Learning Objectives
LO 1-1 Describe the purpose of a checking
account and the forms associated with it.
LO 1-2 Explain how to use a checking
account.
LO 1-3 Discuss the types of checking
accounts.
© 2016 South-Western, Cengage Learning

3. © 2010 South-Western, Cengage Learning SLIDE 3
Chapter 5
Checking Account Basics
A checking account allows you to write
checks to make payments.
A check is a written order to a bank to pay
the amount stated to the person or business
named on it.
A checking account is also called a demand
deposit, because the money may be
withdrawn at any time—that is, “on demand.”
© 2016 South-Western, Cengage Learning

4. © 2010 South-Western, Cengage Learning SLIDE 4
Chapter 5
Checking Account Basics
 Checks follow a process through the banking
system.
 The payee cashes your check.
 The payee’s bank returns the check to your bank.
 Your bank withdraws the money from your account
and sends it to the other bank.
 Your bank then stamps the back of your check,
indicating that it has cleared.
A canceled check is a check that has cleared your
account.
(continued)
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5. © 2010 South-Western, Cengage Learning SLIDE 5
Chapter 5
Checking Account Basics
Many banks no longer send paper
checks to other banks for processing.
They transmit an image of the check, called
a substitute check.
 A substitute check can be used in the same
way as an original check.
(continued)
© 2016 South-Western, Cengage Learning

6. © 2010 South-Western, Cengage Learning SLIDE 6
Chapter 5
Checking Account Basics
 You must maintain enough money in your
account to cover all the checks you write.
 A check written for more money than your
account contains is called an overdraft.
 A bank usually stamps the check with the words
“not sufficient funds” (NSF) and returns the check to
the payee’s bank.
 When this occurs, the check has bounced.
 Your bank will charge you a fee for each NSF check
processed.
(continued)
© 2016 South-Western, Cengage Learning

7. © 2010 South-Western, Cengage Learning SLIDE 7
Chapter 5
Checking Account Basics
Floating a check is writing a check and
hoping to deposit money to cover it
before the check clears.
Floating a check is risky because today’s
electronic systems allow checks to
process very quickly.
Floating a check is illegal in most states.
(continued)
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8. © 2010 South-Western, Cengage Learning SLIDE 8
Chapter 5
Checking Account Advantages
Convenience
Safety
Built-in record-keeping system
Access to bank services
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9. © 2010 South-Western, Cengage Learning SLIDE 9
Chapter 5
Opening a Checking Account
A signature form provides an official
signature that the bank can compare to
the signature you write on your checks.
Most banks require a certain amount as
an initial deposit to open a checking
account.
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10. © 2010 South-Western, Cengage Learning SLIDE 10
Chapter 5
Parts of a Check
Check
Number
ABA Number
Name and
Address of Maker Date
Payee Numeric Amount
Written
Amount
Signature
Account and Routing Numbers
Memo
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11. © 2010 South-Western, Cengage Learning SLIDE 11
Chapter 5
Using Your Checking Account
Writing checks
Paying bills online
Making deposits
Using a checkbook register
A checkbook register is a booklet used to
record checking account transactions.
© 2016 South-Western, Cengage Learning

12. © 2010 South-Western, Cengage Learning SLIDE 12
Chapter 5
Reconciling Your Account
The process of matching your checkbook
register with the bank statement is known
as bank reconciliation.
© 2016 South-Western, Cengage Learning

13. © 2010 South-Western, Cengage Learning SLIDE 13
Chapter 5
Reconciling Your Account
1. Write ending balance from bank
statement.
2. Add credits or deposits not on
statement.
3. Total lines 1 and 2.
4. List checks, withdrawals, and
debits made but not shown on
statement.
5. Total outstanding checks/debit
transactions.
6. Subtract line 5 from line 3.
(Result should match checkbook
balance.)
© 2016 South-Western, Cengage Learning

14. © 2010 South-Western, Cengage Learning SLIDE 14
Chapter 5
Endorsing Checks
 A check generally cannot be cashed until it is
endorsed.
 To endorse a check, the payee named on the
check signs the top part of the back of the
check in ink.
 There are three major types of endorsements.
 Blank endorsement
 Special endorsement
 Restrictive endorsement
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15. © 2010 South-Western, Cengage Learning SLIDE 15
Chapter 5
Blank Endorsement
A blank endorsement is the signature of
the payee written exactly as his or her
name appears on the front of the check.
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16. © 2010 South-Western, Cengage Learning SLIDE 16
Chapter 5
Special Endorsement
A special endorsement, or an
endorsement in full, is an endorsement
that transfers the right to cash the check
to someone else.
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17. © 2010 South-Western, Cengage Learning SLIDE 17
Chapter 5
Restrictive Endorsement
A restrictive endorsement restricts or
limits the use of a check.
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18. © 2010 South-Western, Cengage Learning SLIDE 18
Chapter 5
Types of Checking Accounts
Joint accounts
Special accounts
Standard accounts
Money-Market accounts
Share accounts
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19. © 2010 South-Western, Cengage Learning SLIDE 19
Chapter 5
Lesson 5.2
Banking Services and Fees
Learning Objectives
LO 2-1 Describe banking services available
at most financial institutions.
LO 2-2 List and explain fees charged by
banks for their services.
© 2016 South-Western, Cengage Learning

20. © 2010 South-Western, Cengage Learning SLIDE 20
Chapter 5
Banking Services
 A full-service bank is one that offers every possible
kind of service, from savings and checking accounts to
credit cards, safe deposit boxes, loans, and ATMs.
 Other services commonly offered are online banking,
telephone banking, certified checks, cashier’s checks,
money orders, and debit cards.
 Most banks offer FDIC (Federal Deposit Insurance
Corporation) insurance, which protects the deposits of
customers against loss up to $250,000 per account.
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21. © 2010 South-Western, Cengage Learning SLIDE 21
Chapter 5
Guaranteed-payment Checks
A certified check is a personal check
that the bank guarantees or certifies to
be good.
A cashier’s check, also called a bank
draft, is a check written by a bank on its
own funds.
Traveler’s checks are check forms in
specific denominations that are used
instead of cash while traveling.
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22. © 2010 South-Western, Cengage Learning SLIDE 22
Chapter 5
Money Orders
 Banks sell money orders 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 also can purchase money orders through
the post office and local merchants.
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23. © 2010 South-Western, Cengage Learning SLIDE 23
Chapter 5
Debit Cards
A debit card is a plastic card that
deducts money from a checking account
almost immediately to pay for purchases.
The debit card is presented at the time of
purchase.
The amount of the purchase is quickly
deducted from the customer’s checking
account and paid to the merchant.
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24. © 2010 South-Western, Cengage Learning SLIDE 24
Chapter 5
Bank Credit Cards
 You can apply to a full-service bank for a bank
credit card, such as a Visa or MasterCard.
 If you meet the requirements and are issued a
card, you can use it instead of cash at any
business that accepts credit cards.
 Banks offering national credit cards usually
charge both an annual fee for use of the card
and interest on the unpaid account balance.
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25. © 2010 South-Western, Cengage Learning SLIDE 25
Chapter 5
Overdraft Protection
Overdraft protection allows you to cover
checks or withdrawals up to a specified
amount, usually between $100 and
$1,000, depending on the typical balance
in your account.
With overdraft protection, your checks
will be covered even if you have
insufficient funds in your checking
account.
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26. © 2010 South-Western, Cengage Learning SLIDE 26
Chapter 5
Automated Teller Machines
 An automated teller machine is also called an
ATM.
 To use ATMs, you must
 Have a card that is electronically coded
 Know your personal identification number (PIN)
 Getting cash is a common ATM transaction.
 Using a debit card, you can withdraw cash from
your checking or savings account.
 Using a Visa or MasterCard, you can receive a cash
advance electronically.
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27. © 2010 South-Western, Cengage Learning SLIDE 27
Chapter 5
Online and Telephone Banking
 Online and telephone banking services let you
access your accounts from a computer or
telephone any time, day or night.
 Services include:
 Transferring money from one account to another
 Paying bills by authorizing the bank to disburse
money
 Getting account balances
 Seeing which checks have cleared and which
deposits have been entered
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28. © 2010 South-Western, Cengage Learning SLIDE 28
Chapter 5
Online and Telephone Banking
Most banks also allow and encourage
electronic transfers of money.
An electronic funds transfer (EFT) uses a
computer-based system that enables you to
move money from one account to another
without writing a check or exchanging cash.
(continued)
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29. © 2010 South-Western, Cengage Learning SLIDE 29
Chapter 5
Stop Payment Orders
A stop-payment order is a request that
the bank not honor a specific check.
The usual reason for stopping payment
is that the check has been lost or stolen.
Most banks charge a fee for stopping
payment on a check.
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30. © 2010 South-Western, Cengage Learning SLIDE 30
Chapter 5
Safe Deposit Boxes
Financial institutions offer customers a
safe deposit box to store valuable items
or documents.
They charge a yearly fee based on the
size of the box.
Keeping important documents and other
items in a safe deposit box ensures that
they won’t be stolen, lost, or destroyed.
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31. © 2010 South-Western, Cengage Learning SLIDE 31
Chapter 5
Safe Deposit Boxes
Examples of items commonly kept in a
safe deposit box include
Birth, marriage, and death certificates
Deeds and mortgage papers
Stocks and bonds
Jewelry
Coin collections
(continued)
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32. © 2010 South-Western, Cengage Learning SLIDE 32
Chapter 5
Loans and Trusts
 Financial institutions make loans to finance the
purchase of cars, homes, home improvements,
vacations, and other items.
 Banks can also provide advice for estate
planning and trusts.
 Banks can act as trustees of estates for minors
and others.
 A trustee is a person or an institution that manages
property for the benefit of someone else under a
special agreement.
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33. © 2010 South-Western, Cengage Learning SLIDE 33
Chapter 5
Notary Public
 A notary public verifies a person’s identity,
witnesses the person’s signature on a legal
document, and then “notarizes” the signature
as valid.
 Financial institutions typically have a person on
their staff who is a notary public.
 This person provides notary services for account
holders, usually without charge.
 For noncustomers, there is typically a small fee.
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34. © 2010 South-Western, Cengage Learning SLIDE 34
Chapter 5
Financial Services
Purchasing or selling savings bonds
Investment brokerage services
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35. © 2010 South-Western, Cengage Learning SLIDE 35
Chapter 5
Bank Fees
Banks charge fees to their customers to
help cover their operating costs.
The best way to avoid fees is to choose
the right kind of account.
Shop around and find an account that is
right for you.
Be aware of the rules of your account, so
that you don’t violate them and have to pay
high fees.
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36. © 2010 South-Western, Cengage Learning SLIDE 36
Chapter 5
Examples of Bank Fees
 Loan fees
 Trustee fees
 Check cashing fees
 Per-check fees
 Monthly service fees
 Overdraft fees
 NSF check charges
 ATM transaction fees
 Safe deposit box fees
 Teller service fees
 Minimum balance fees
 Fees for guaranteed-
payment checks
 Notary service fees
 Online bill payment fees
 Fees to return canceled
checks
© 2016 South-Western, Cengage Learning