Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Checking account – transactional deposit
account at a financial institution that allows
for unlimited withdrawals and deposits
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Write checks
Avoid carrying cash
Monthly statement
Useful for budgeting
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Signature card – card signed by individual
opening account and kept on file to confirm
account
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Always sign the same way
Avoid nicknames
Use ink; pencil can be erased
Individual or joint account
Chapter 29 Checking Accounts
Make a deposit with a deposit slip.
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Availability of funds depends on:
1. Day of deposit
2. Type of deposit
Chapter 29 Checking Accounts
Deposit Slip:
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
• Date it
• Enter cash being deposited
• List checks (>3, list on
back, subtotal and carry
subtotal to front)
• Subtotal cash and checks
• Less cash received - sign
• Net deposit
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Check – written order to a bank to pay a
stated sum from the drawer’s account
• Write neatly
• Use ink
• Sign consistently
• Use cursive
• Legible figures
• Do not erase; VOID
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Check register – personal record of your
checking account; paper or electronic
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Check number
Date
To whom the check was written
Amount of the check
New balance
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Endorsement – signing of a document that
allows for legal transfer from one party to
another
• Trailing edge is
the left side of
the check when
looking at the
front of it
Chapter 29 Checking Accounts
3 Common Endorsements:
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
1. Blank - simplest;
signature only
2. Restrictive – safer;
“For Deposit Only” +
signature
3. Endorsement in Full
– used to transfer a
check to another
person; “Pay to the
order of _____” +
signature
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Bank Statement/Account Statement –
monthly record sent/available to account
holder summarizing all transactions
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Beginning balance & ending balance
Debits (decreases) & credits (increases)
Cleared checks
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Chapter 29 Checking Accounts
Bank statement Vs. Check Register:
Opening an Account
Writing Checks
Keeping Records
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•
Endorsing Checks
Reconciling
21st
Century Banking
•
They will probably NOT have same balance
Checks written, but not cleared are called
outstanding
Math errors; forgotten items
“Reconciling” or “Balancing” is important!
• Matching up 2 sources of information
• Reconcile the differences
Chapter 29 Checking Accounts
First Step of Reconciliation:
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
• Identify transactions where you & bank
agree (Register has a column for that)
Chapter 29 Checking Accounts
Second Step of Reconciliation:
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
• Add missing transaction from bank
statement to your register
• Easy to forget to write down a debit card
transaction
• Check receipts
• If you disagree, call the bank
Chapter 29 Checking Accounts
Third Step of Reconciliation:
Opening an Account
Writing Checks
Keeping Records
• Some items in your register may not have
cleared the bank yet
Endorsing Checks
Reconciling
21st Century Banking
3 Possible Reasons for Discrepancy:
1. Bank has a transaction you don’t have
2. Amount in register does not agree with
amount on statement
3. Math error in register/reconciliation
*RECONCILE MONTHLY!
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Chapter 29 Checking Accounts
Touch-Tone Banking
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
• Banks began offering
account services via
touch-tone phone
• Most have moved to
internet banking
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Direct Deposit – credit from the source
straight to the banking account
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Start of 20th century –cash
Cash replaced by checks
1970s – direct deposit offered
Highly secure
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
ATM (Automated Teller Machine) –
electronic banking outlet; lets customers
complete basic transactions w/o a teller
• Deposits, withdrawals, transfers
• Insert debit card, enter PIN (24 hrs./days)
• Fees for not using your bank’s ATM!
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Automatic Payee-Initiated Payments– sign
up to let company pay themselves monthly
• Avoid missed payments
• Saves postage
• Make sure you have
enough money in the
account!
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Online Banking – allows individuals to
perform banking activities from home or
smartphone (mobile banking) via Internet
• View all transactions, statements
• Transfer funds between accounts
• Pay bills (repeat pay)
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Debit Cards – plastic card that provides the
cardholder access to his/her bank account
• AKA: cash card, bank card, ATM card, check
card
• $ deducted from checking account
immediately
• Keep PIN a secret
• Report lost/stolen card immediately
Chapter 29 Checking Accounts
What is difference between Debit and Credit Cards?
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
Chapter 29 Checking Accounts
*Joint Account- Two owners, one signiture
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
*Checking accounts are demand deposits
because….
*Some checking accounts “earn” interest and are
interest-bearing”
*Service Charges are sometimes charged by the
bank to you, to cover the paperwork the bank does
to maintain the account
Chapter 29 Checking Accounts
Opening an Account
Writing Checks
Keeping Records
Endorsing Checks
Reconciling
21st Century Banking
• What does it mean to over-draw your
account?
• A checking account is also called a
Demand deposit. Why?
• Do all checking accounts earn interest?
• Explain the difference between canceled
checks/cleared check and outstanding
checks.