Checking Accounts

Types of Checking Accounts

• Basic• Free• Interest-Bearing• Joint• Express• Lifeline• Senior/student• Money market

Basic Checking Account

• Used primarily to pay some bills and perhaps use a debit card to pay some expenses.– May require minimum balance– Limited amount of checks you can write per

month– Not interest bearing

Free Checking

• Checking account that has no monthly service charges or per-item fees regardless of balance or activity.– Popular

Interest-Bearing Checking

• Checking account that gains interest; usually requires a minimum balance to open, and sometimes you must maintain a higher balance to avoid paying fees.

Joint Checking

• An account owned by two or more people.– Each co-owner has equal access to the

account.

Express Checking Account

• Designed for people who prefer to bank by ATM telephone or personal computer.– Usually has unlimited check writing.– Low minimum balances– Low or no monthly fees– Popular with students and younger customers

Lifeline

• This is a “no frills” account

• Meant for people who have a low income

• These usually have monthly fees (typically zero to $6)

• Usually requires a minimum deposit and balance along with a limitation on number of checks per month.

Senior/Student Checking

• Special checking deal for a student or a person 55 years old or older.

• Perks of this account vary, but may include free checks, cashiers and traveler’s checks, free ATM use, better rates on loans and credit cards, and discounts on various items ranging from travel to prescriptions.

Money Market

• Combines checking with savings and/or investment opportunities to help you pursue higher earnings.

• Requires a high minimum deposit to even open (usually $1,000 to $10,000)

• Requires higher balances to avoid fees and imposes tighter limits on checking transactions than other accounts.

• It pays more interest than a regular savings account.• The account is for people who can afford to maintain a

high balance and do not write more than three to five checks each month.

Opening an Account

• Shop around, talk to several banks and compare their products.

• Determine what type of account you want; what is important to you as far as services.

• Make your decision and go to bank:– Fill out an application– Provide bank with money to open the account– Signature Card: A card that the bank uses to verify

your identity

Opening an Account

• Signature Card: A card that the bank uses to verify your identity

Opening an Account

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Deposit Ticket

• A list of the cash, number and amount of each check, and total amount of deposit.

Check Register

• The portion of your checkbook where you keep track of all your transactions.

Making Withdrawals

• Write a paper check, or pay by check over the phone.

• Get cash from a teller at a bank branch.• Use debit card at a store or automated

teller machine (ATM).• Use your bank’s Web site to pay a bill.• Authorize the bank to automatically pay

recurring bills.

Checkbook Reconciliation

• The act of balancing your checkbook book register against your bank statement.– This can be done either online at anytime, or once a

month when you receive your account statement from the bank.

• Balancing your checkbook is important so that you know how much money is currently in your account, and to make sure that no unauthorized withdrawals have occurred.

Overdraft

• Writing a check that is for more than your account holds; insufficient funds. This sometimes referred to as bouncing a check.– Reasons to avoid bouncing a check include:

• The check will be returned with a hefty fee• The bill for which the check was intended may be

past due by the time the bounced check is returned.

Online checking

• Protect yourself against online theft by:– Installing a firewall on your computer– Frequently checking your balance and activity

on your account– Don’t open suspicious e-mails or give out

personal information