USING A CHECKING ACCOUNT. Ch 5 Section 3

Transcription

1 USING A CHECKING ACCOUNT Ch 5 Section 3

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3 KEY TERMS 1. Signature authorization form a document that leaves the account holder's signature on file with the bank to prevent fraud 2. Deposit slip - a document that accompanies bank deposits, showing the account holders name and account number and the amount to be deposited 3. Reconciling - matching ones personal account records with the banks records 4. Account statement the official monthly list of transactions that the bank has recorded

4 OPENING AN ACCOUNT When you open a checking account, you will be asked to fill out an. application You will also need to provide your. SSN You will also sign an official signature authorization form - this document leaves your signature on file with the bank to prevent fraud.

5 CHECKING ACCOUNT ACTIVITY 1. Writing a check 2. Making a deposit 3. Reconciling your account 4. Checking account problems

6 WRITING A CHECK Its is important to understand how to manage your money - you will want to balance your checkbook and monitor your account activity if you want to avoid overdrafts and unwanted fees When you open a checking account, establish a healthy pattern for keeping your checkbook up-to-date - paying attention to details can save you a lot of time, money, and aggravation The 6 things you are responsible for filling out on a check are: 1.Payee 2.Amount (in writing) 3.Amount (dollar amount) 4.Date 5.Memo / What is the check paying for 6.Your Signature

7 WRITING A CHECK CONT'D After writing out a check, make sure you. record in it in your checkbook When writing a check: 1. Always write in permanent ink (never pencil) 2. Write legibly so no one will misunderstand the amount or Payee 3. If you make a small mistake, correct it and write your initials next to the correction 4. If you make a large mistake, write "VOID" across the front of the check or tear it up (make a note of voided checks in your register) 5. Keep track of every check, used and unused 6. Keep all your checks and bank statements in a safe and secure place 7. Never throw away unused checks without shredding or burning them

8 MAKING A DEPOSIT To make a deposit, you will need a. deposit slip Deposit slips are found at the back of your check book printed with your name and account number The bank will also have deposit slips if your checkbook does not include any or your run out You are responsible for filling out the following on a deposit slip: 1. Date 2. Signature 3. Account number (if not already printed on there using a deposit slip from the back of your check book) 4. Total cash and/or total check(s) amount 5. Less cash received 6. Total deposit amount

9 MAKING A DEPOSIT CONT'D Along with a deposit slip, you will turn in the total cash being deposited and all of the checks you want to deposit Each check being deposit must be endorsed on the back Endorse a check - 3 lines on the back of the check including: 1. Ford Deposit Only 2. Your signature 3. Your account number After you deposit your money you will get a receipt keep it and make sure you account balance matches what you have in your checkbook / register Your deposit should be added to your account that next business day

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11 You are comparing the entries in your checkbook with the banks records to be sure that neither of you has made mistakes RECONCILING YOUR ACCOUNT Reconciling. matching up your records with the banks records Good way for you to check your math and track your spending Can use online banking or use your account statement Account statement -. List of transactions that the bank has recorded for the month Includes all of your deposits, checks, debit withdrawals, fees, and other transactions Sample Account Statement

12 RECONCILING YOUR ACCOUNT CONT'D Outstanding checks - you might have some stragglers that do not appear on the bank's statement that are listed in your checkbook/register Keep track of these checks to make sure they clear the following month Outstanding deposits- Recent deposits may not show up on the banks statement

13 RECONCILING YOUR ACCOUNT STEPS 1. In your check register, check off all the transactions listed on the banks statement 2. Locate the ending balance shown on the statement 3. Add any outstanding deposits to this balance 4. Subtract any outstanding checks or other outstanding withdrawals or fees from this new balance 5. The amount should match the current balance in your checkbook If your final amount and the banks final amount do NOT agree, first check your math. Be sure you did not transpose any numbers, be sure you counted all outstanding checks and deposits otherwise, re-do the list or contact your bank for assistance If your final amount and the banks final amount agree, you are good to go!

14 CHECKING ACCOUNT PROBLEMS If you keep your checkbook/register up-to-date and reconcile your account on a regular basis, you should not have any problems. Errors can be made though, such as: Computer glitch might create an error on your statement Sometimes a deposit or check may not go through 'Bank error' - a manual error made by someone at the bank usually Whatever the case, contact the bank right away you will probably have a little trouble sorting out the issue

15 ONLINE BANKING 1. Online Money Transfers 2. Paying Bills Online Most banks provide online banking which allows you to: See your account balance Make transfers or payments Check your account history Pay your bills Some banks may charge a fee for this service, but most are free You will need a Username and PIN to access your account online

16 ONLINE MONEY TRANSFERS Move money instantly between accounts at the same bank EX: if your car loan came from your bank, instead of writing a check or paying online on the car loan companies website, you could simply transfer funds from your checking account to make your monthly payment You can do this with any bill/payment, as long as your checking account is at the same bank Includes transferring money from your checking account to your savings account instantly

17 PAY BILLS ONLINE Most accounts with online access allow you to pay certain bills online EX: electric, phone, credit card, mortgage, even some doctors and dentist bills After you enter you log into your account online, it will ask you: Payment amount (are you paying the bill in full or only some of it?) Your bank account information (usually your routing # and account # ) The date you want it to be paid (you can have it paid at a later date if you wish) Some banks charge a fee for being able to use online bill paying, most do not

18 PAY BILLS ONLINE CONT'D Many people use online bill pay for the auto bill-pay feature you log onto your account, which ever you want to pay, and sign up for auto payment - each month, on whatever date you chose, the bank will automatically deduct the money from your checking account and pay those bills for the amount you owe This ensures that your bills are paid on time, which means no late fees PROS: Time saver and Safe - people don t have to worry whether their bills will get paid on the right date or for the right amount CONS: Overdraft fees if there is not enough money in your account

19 PROTECTING YOUR ACCOUNT INFORMATION 1. Be sure to guard your username and password for online banking access 2. Avoid checking your bank information on a public computer There have been people who's bank information has been compromised because he/she did not log off or close their account, so another person found it 3. If your account info has been stolen, contact your financial institution immediately They will tell you what steps you need to take to ensure the least possible damage

20 DONE! Last section, last Chapter done!