Check It Out
FDIC Money Smart – Financial Education Curriculum Overhead Transparencies
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Introductions
• Instructor and student introductions • Module overview
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Student Introductions
• Your name
• Your expectations, questions, and concerns about checking accounts
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Purpose
Check It Out will teach you how to use a checking account responsibly.
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Objectives
By the end of this course, you will be able to: • State the benefits of using a checking
account.
• Determine which checking account is best for you.
• Identify the steps involved in opening a checking account.
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Objectives (Continued)
• Add and withdraw money from a checking account.
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Agenda and Ground Rules
• 2 hours long
• Two 10-minute breaks • Training methods • Class participation
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Checking Accounts
A checking account lets you write checks and use a debit card to:
• Pay bills. • Make purchases.
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Benefits of Checking Accounts
• Convenience • Cost
• Better money management • Safety
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Convenience
Checking accounts:
• Give you quick and easy access to your money.
• Let you “direct-deposit” payroll and other checks.
• Eliminate the need to carry a lot of cash.
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Cost
Using a checking account is usually less expensive than using other services to cash checks or buy money orders.
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Better Money Management
Having a checking account lets you: • Keep a record of “transactions.” • Build a positive relationship with your
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Safety
Having a checking account:
• Is safer than carrying large amounts of cash.
• Protects your checks and check card if they are lost or stolen.
• Means your money is insured up to the maximum amount allowed by law.
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How to Find the Right Checking
Account
• Get recommendations.
• Answer the questions on the Determining Your Checking Account Needs Worksheet.
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Fee Schedule
Some common bank fees include: • Monthly service fee
• Minimum balance fee
• Automated Teller Machine (ATM) user fee • Overdraft fee
• Stop payment fee
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When a Checking Account Isn’t
Right for You
If you:
• Don’t write many checks. • Tend to “bounce” checks.
• Can’t find a checking account for which you can maintain the minimum balance.
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Practice Exercise: Choosing the
Right Checking Account
Instructions:• Read each scenario carefully.
• Indicate whether or not David should get a checking account. Be prepared to explain your answer.
• Then read and answer the questions about fees a bank might charge.
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Types of Checking Accounts
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Documents Needed to Open a
Checking Account
• Photo ID• Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) • A deposit
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Account Verification
The bank or credit union reviews your checking account history to make sure that: • You will be a responsible customer. • No one is trying to steal your identity to open an account.
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Signature Card
The document that identifies and contains the signature of the owner of the account.
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Two Ways to Use Money in Your
Checking Account
• Write a check. • Use electronic banking.
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Steps to Writing a Check
• Make sure you have enough money in your account.
• Complete the blank spaces on the check. • Record the transaction in your check
register.
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Sample Check
YOUR NAME YOUR ADDRESS YOUR PHONE NUMBER PAY TO THE ORDER OF 105 00-6879 770 Dollars FINANCIAL INSTITUTION
Your City, State, Zip Code
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Back of the Check
ENDORSE HERE
DO NOT WRITE, STAMP OR SIGN BELOW THIS LINE RESERVED FOR FINANCIAL INSTITUTION USE *
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Sample Checks
YOUR NAMEYOUR ADDRESS YOUR PHONE NUMBER PAY TO THE ORDER OF 105 00-6879 770 Dollars FINANCIAL INSTITUTION
Your City, State, Zip Code
:00000000 : 0000 0000 0 000 0 0.: Memo $ Date:_______ YOUR NAME YOUR ADDRESS YOUR PHONE NUMBER PAY TO THE ORDER OF 105 00-6879 770 Dollars FINANCIAL INSTITUTION
Your City, State, Zip Code
:00000000 : 0000 0000 0 000 0 0.: Memo $ Date:_______2/26/20XX Coffee Mart 19.75 Nineteen and 75/100 Your signature coffeemaker Check It Out 27
Electronic Banking
Electronic banking uses computers to move money into and from your account. It includes:
• Debit card transactions • Electronic bill pay • ATM transactions
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Debit Card
A debit card lets you:
• Deposit cash into and withdraw it from your checking account.
• Make purchases at retail locations. BE CAREFUL!
The money is immediately taken out of your account.
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Electronic Bill Pay
A service that automatically takes money out of your account to pay your bills.
• You don’t have to pay for postage. • You don’t have to worry about late
payments.
You can also use bill pay to make payments to businesses to which you owe money.
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Automated Teller Machine
(ATM)
1 3
2
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Four Ways to Add Money to Your
Checking Account
• Cash or check deposit using the teller service
• ATM deposit • Deposit by mail • Direct deposit
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Sample Deposit Slip
Your Name Your Address Your Phone Number
DEP O SI T TIC K E TDATE 3/22/20XX
DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL SIGN HERE IF CASH RECEIVED FROM DEPOSIT
YOUR FINANCIAL INSTITUTION YOUR CITY, STATE Zip Code DO NOT USE FOR AUTOMATIC
PAYMENT OR CHECK TRANSACTIONS :00000000 : 00000 00000.: CURRENCY COIN C H E C K S OR TOTAL FROM REVERSE SUBTOTAL LESS CASH RECEIVED NET DEPOSIT Check It Out 33
Sign the Back of the Check
ENDORSE HERE
DO NOT WRITE, STAMP OR SIGN BELOW THIS LINE RESERVED FOR FINANCIAL INSTITUTION USE *
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Sample Deposit Slip Front and
Back
Your Name Your Address Your Phone Number
DE POS IT T ICKE TDATE
DEPOSITS MAY NOT BE AVAILABLE FOR IMMEDIATE WITHDRAWAL SIGN HERE IF CASH RECEIVED FROM DEPOSIT
YOUR FINANCIAL INSTITUTION YOUR CITY, STATE Zip Code DO NOT USE FOR AUTOMATIC
PAYMENT OR CHECK TRANSACTIONS :00000000 : 00000 00000.: CURRENCY COIN C H E C K S OR TOTAL FROM REVERSE SUBTOTAL LESS CASH RECEIVED NET DEPOSIT Check EN TER TO T A L O N TH E FR O N T O F T H IS TIC K ET Cent s D o lla rs Chec ks L ist si ngl y 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 TO T A L Check It Out 35
ATM Deposits
• Similar to making an ATM withdrawal. • Use the special deposit envelope. • Remember to get a receipt.
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Mail Deposits
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Direct Deposit
• Checks are deposited directly into your checking account.
• Your money is available immediately. • It’s the safest way to receive your money. • Signing up is easy at your financial
institution.
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Keeping an Accurate Record of
Checking Account Activity
• Record all transactions.• Record maintenance fees, interest, and other bank charges.
• Review the monthly checking account statement.
• Reconcile your check register with your monthly checking account statement.
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Checking Account Statement
A record of all transactions made during the preceding month, including:
• Cashed checks
• All withdrawals and deposits • Debit card purchases • Fees
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Reconciling Your Checking
Account
Finding the reasons for the difference between your checkbook register balance and the checking account statement balance caused by:
• Transactions on the bank statement that weren’t recorded in the check register. • Transactions recorded in your check
register that were made too late to appear on the bank statement.
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Checking Account Reconciliation
Form
CHECKS OUTSTANDING - NOT CHARGED TO ACCOUNT $ Check Number Check Amount $ Total $ $ $ $ Balance $
* This balance should agree with balance in your check register.
Total $
Bank balance shown on this statement Subtract withdrawals outstanding Add deposits outstanding
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“Bad” or NSF Check
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Consequences of Writing Bad
Checks
• Bad check fees
