CHECKING ACCOUNTS

Personal Money Management

Advantages

Convenient way to pay bills

Often safer than using cash

Record keeping system to track expenses and create budgets

Access to other bank services such as direct deposit, online banking, use of a debit card, and 24/7 access to cash through ATMs

Your Responsibilities

Write checks carefully and keep accurate records of checks written and deposits made.

Verify the accuracy of the bank statement you receive each month.

Keep canceled checks among your permanent records.

Types of Accounts

Joint accounts

Express accounts

Basic accounts

Interest bearing accounts

Senior/Student accounts

Joint Account

Opened by two or more people

Any person who signs on the account has the right to the entire amount deposited

“Or” account – any authorized account holder can write checks

“And” account – requires signature of both owners on checks

Express AccountsKey Bank - Express Account

For those who prefer to do things at an ATM or computer

Low minimum balance requirements

Low or no monthly fees

Must pay fees to visit a teller (Could be as high as $3/visit)

This type is good for those who have direct deposit or use ATMs for withdrawals and transactions

Basic Accounts

For those who have minimal banking needs (perhaps pay a few bills or use debit card here and there)

May require direct deposit or minimum balance to avoid “maintenance fees”

You may be limited to the number of checks or transactions each month; go over and you’ll pay a “per item fee”

Interest Bearing Accounts

A checking account in which you can earn interest on the money in the account.

Usually a minimum initial deposit to open the account.

Account balances must not fall below the minimum balance set by the bank or you will have to pay fees.

Interest rates given are often very, very low (and may not be worth the balance requirements).

Senior/Student Accounts

Banks will often provide special perks for certain age people.

These perks will vary from bank to bank, but can include free ATM use, free checks, discounts, etc.

Parts of a Check

• Check number• ABA routing

number (fraction)• Maker’s name and

address• Date• Payee

• Numeric amount• Written amount• Maker’s signature• Routing number• Account number• Memo

Parts of a Check

Check Number – used for easy identification; top right hand corner of the check

ABA Routing Number – fraction in the upper right hand corner of check

Used for internal transaction purposes “Old school” method – now just used as

backup option in case other routing number can’t be read or is torn

Parts of a Check

Date – fill in the date you write the check Usually towards the top, in the center of the

check Postdating of checks is not

recommended: Banks will not cash it before that date Bank may charge a fee for holding it Bank may not accept a check over six months

old

Parts of a Check

Payee – the person or company to whom the check is made payable

Numeric Amount – The amount of dollars and cents being paid in figures.

Write the amount neatly and clearly, close to the dollar sign and make sure you insert a decimal point between dollars and cents.

Parts of a Check

Written Amount – The amount being paid in words.

Write the word “and” to separate dollars and cents. This takes the place of the decimal point.

Use a fraction for the amount in cents. Example: 12/100

Draw a line from the cents to the word “dollars”

Parts of a Check

Maker’s Signature – gives authorization for the written check. Written in the lower right of a check.

Routing Number – Bank identification number created to help facilitate processing of checks. Located in the lower left hand corner (the left-most number between the colon symbols)

Account Number – your personal checking account number. (Lower left hand corner – the number on the right)

Parts of a Check

Memo – place at the bottom left of a check for the maker to write the purpose of a check.

Does not need to be filled in. Optional.

When paying bills companies often ask you to write your account number there.

Endorsing a Check

A check cannot be cashed until it has been endorsed (signed)

When two or more people are named as payees, all must endorse the check

To endorse a check, the payee signs the back of the check in blue or black ink

Types of Endorsement

Blank Endorsement – the signature of the payee written exactly as his or her name appears on the front

If the name is incorrect on the front, you would correct the mistake by endorsing the check with the misspelled version first, then with the correct version below it

Donald McLainDonald MacLane

Types of Endorsements

Special Endorsement – aka an endorsement in full, is an endorsement that transfers the right to cash the check to someone else

Pay to the order ofDiane Jones

Donald MacLane

Types of Endorsements

Restrictive Endorsement – limits the use of the check.

Example: “For Deposit Only” limits it to a deposit into the account specified

Safer than blank endorsement in mailing deposits, in night deposit systems, or other circumstances where a check may be lost.

Restrictive Endorsement

For Deposit OnlyUnited California Bank

Acct. # 8-2011-4Donald MacLane

How to Prepare a Check

How would you write your check differently?

How would you write your check differently?