Banking: 101
Checking Account
 What is a Checking Account?
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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can be withdrawn on demand
 How can money be withdrawn from a checking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?
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In person
Check Card
ATM Card
Cash back at stores
Checks
Direct Payment
Checks
Canceled vs. Stop Payment
 What is a canceled check?
A canceled check is a check that bears the
bank’s stamp. You can use your canceled
checks as proof of purchase or of payment if a
Dispute arises.
 What is a stop payment order?
A stop payment order is a request that the bank
not cash a specific check. The usual reason for
stopping payment is that the check has been lost
or stolen. Most banks charge a fee for this
service.
Bouncing a Check
A check written for more money than your account
contains is called an overdraft. A financial institution
receiving an overdraft usually stamps the check with
the words “not sufficient funds” NSF and returns
the check to the payee or at the payee’s institution.
The check is considered “bounced.” The bank and
the place where the check was written will both
charge a fee.
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 Pay
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The bank pays your bills for
you
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Anyone, anytime, anywhere in
the U.S.
Set up recurring payments to
be automatically made
Receive email reminders
when bills are due
Sign up for E-Billing to get
bills electronically delivered
Keep all bill payment history
in the same place
Online Banking
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Available 24/7 with an
Internet connection
Access and manage
your bank accounts and
credit cards
Keep an eye on recent
transactions
Transfer funds between
accounts
View current and past
statements
View check and deposit
slip copies
Download transactions
into money management
documents
Additional Services
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Wire Transfers
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Direct Deposits (paycheck to bank)
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Certificates of Deposit (investments)
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Safe Deposit Boxes (for jewelry, collectibles, birth &
marriage certificates—not for cash)
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Foreign Currency Exchange
Money Orders
Money 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.
Other Types of Checks
 A certified check is a personal check
that the bank guarantees or certifies to be
good.
 Sometimes a payee might want you to get
your personal check certified to reduce the
risk of accepting your check in payment.
 A cashier’s check 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.
Bank Fees
 Bank 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.
Making a Deposit
1.
2.
3.
Your account number
Today’s date
CASH = Total currency
and coin that is to be
deposited
1.
2.
3.
4.
List deposited checks separately
Total Deposit = Cash + Checks
Indicate if you want cash back
Net Deposit = Total Deposit – Cash
back
Writing a Check
**Never use pencil
1.
2.
3.
4.
Check number
Today’s date
Payee
Amount of the check in numbers
**Write as close as possible to
the dollar sign so that additional
numbers cannot be added.
5.
Amount of the check in words
**Start at the left edge of the
line directly below “pay to the
order of.” Draw a line between
the amount and the word “dollars.”
6.
7.
8.
Your signature
Reminder of what the check paid
Your account number
Debit Cards
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Money comes from
checking account
Also called ATM or
Electronic Funds
Transfer (ETF)
Make purchases
anywhere that accepts
Visa® or Mastercard®
Get cash at ATMs all
over the world
Make Internet and
telephone purchases
Get cash back at
participating stores
Check Cards
Two ways to make purchases:
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Enter PIN
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Swipe card
Choose debit
Enter your PIN
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Sign the Receipt
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Swipe card
Choose credit
Sign the receipt
ATM & PIN
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What is an ATM?
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Automated Teller Machine
Make transactions without
human interaction
Withdrawals, deposits,
money transfers, balance
inquiries, and check
imaging
What is a PIN?
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Personal Identification
Number
4-digit number used to
access various accounts
Able to change PIN at most
ATMs
Using the ATM
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Available 24/7
ATM transactions are
usually free at your bank’s
ATMs
Service fees for noncustomers at most ATMs
Watch for higher ATM fees
at some places
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Convenience Stores
Casinos
ATMs show the available
balance which may be
different from your actual
balance
Be sure to record all
transactions, withdrawals,
and fees in account register
Card & Pin Safety
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Card Safety
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Always sign the back
Never let anyone use
card
Be sure to get it back
after each use
Keep receipts of all
transactions
Do not carry extra credit
cards or SSN card in
wallet
Immediately report lost
or stolen cards
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Pin Safety
Never tell anyone your PIN
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Guard PIN at ATMS and
cash registers
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Never write PIN anywhere
in purse or wallet
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Banks never ask for check
card PIN
Account Register
**Record all transactions when made
1.
2.
3.
4.
5.
Check number or transaction type
Date the transaction was made
Payee and memo
Amount of the transaction
**New Balance = Previous Balance – Amount of Transaction
Amount of the deposit
**New Balance = Previous Balance + Amount of Deposit
Savings and Money Market
Accounts
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What is a Savings
Account?
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Interest-bearing account
Used to save money
Minimum balance required
Limited number of
withdrawals
What is a Money Market
Deposit Account?
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Interest-bearing account
Limited check writing
Requires a higher minimum
balance
Most banks charge fees on
these accounts if the
balance goes below a
specified level
Sample Bank Service Rates