Chapter 29

Checking Accounts pp. 470- 483

Chapter 29
Opening an Account
Checking accounts are sometimes
called demand deposits because
each check a customer writes is an
order to the bank to release money
from the account on demand.

Introduction to Business, Checking Accounts Slide 2 of 62

Chapter 29
Types of Accounts
Most banks offer several types of
checking accounts.

A wise consumer investigates all the

kinds of accounts available, as well as
their advantages and costs.

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Chapter 29
Regular Account
A regular checking account is
designed for customers who write a
few checks each month and don’t
keep a minimum amount of money in
the account.

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Chapter 29
Regular Account
Some accounts require a minimum
balance.
If the balance falls below the minimum,
a service charge is deducted from the
account.

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Chapter 29
Interest-Bearing Account
An interest-bearing account is a
checking account that earns interest
on your account’s balance.

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Chapter 29
Interest-Bearing Account
An interest-bearing account usually
has a minimum balance requirement
with an unlimited number of checks
allowed each month.

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Chapter 29
Interest-Bearing Account
The minimum balance might be much
higher than for a regular checking
account.

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Chapter 29
Joint Account
A joint account is an account shared
by two people who are equally
responsible for the account.
With a joint checking account, either
person can write checks on the
account.
Introduction to Business, Checking Accounts Slide 9 of 62
Chapter 29
Signature Card
A signature card is a record of your
signature used by the bank to verify
your identity.
The signature card helps prevent other
people from cashing your checks.

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Chapter 29
Signature Card
The signature you put on your card is
the same one you have to use when
you sign your checks.

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Chapter 29
Overdraft Protection
One risk of having a checking account
is writing checks for more money than
you have in your account, or
overdrawing your account.

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Chapter 29
Overdraft Protection
Banks charge a fee for a returned
check.

The business you wrote the check to

will probably also charge a fee.

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Chapter 29
Overdraft Protection
Overdraft protection is a line of credit
for overdrawn checks.
You pay a service fee for the overdraft
protection and interest on the
overdrawn amount until it is repaid.

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Chapter 29
Stop Payment
A stop payment is an order for a bank
not to cash a particular check.

Banks charge a fee to stop payment

on a check.

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Chapter 29
Debit Cards
A debit card is like a credit card but
money is taken directly from your
checking account when you use it
rather than charging the amount to a
credit account.

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Chapter 29
Online Checking
Online banking allows you to check
your accounts, transfer money, or pay
bills at any time of the day over the
Internet.

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Chapter 29
Online Checking
Online checking is less expensive for
banks, so service fees are often lower
than a traditional account.

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Chapter 29
Online Checking
Banks offer the option of scheduling
automatic payment of your bills from
your checking account.

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Chapter 29
Account Records
An advantage of a checking account is
that it enables you to keep records of
your financial transactions.

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Chapter 29
Writing a Check
The party to whom the check is written
and who is cashing the check is the
payee.

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Chapter 29
Writing a Check
The party who wrote the check and is
paying the money, or drawing it from
an account, is called the drawer.

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Chapter 29
Writing a Check
The bank or financial institution where
the drawer has an account is the
drawee.

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Chapter 29
Writing a Check
Your check register is your
checkbook log where you keep track
of all your checking transactions.

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Chapter 29
Depositing a Check
To deposit a check in your account you
need to fill out a deposit ticket.

Many ATM machines don’t require a

deposit ticket.

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Chapter 29
Depositing a Check
To deposit or cash a check requires an
endorsement, or the signature of the
payee on the back of the check.

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Chapter 29
Depositing a Check
To endorse a check, follow these rules
for your protection:
• Endorse the check on the back
• Use a black pen so your signature
can’t be erased
continued
Introduction to Business, Checking Accounts Slide 27 of 62
Chapter 29
Depositing a Check
• Sign your name exactly as it’s written
on the front of the check
• If you’re depositing a check rather
than cashing it, write “For Deposit
Only” above your signature.

Introduction to Business, Checking Accounts Slide 28 of 62

Chapter 29
Bank Statements
A bank statement is the bank’s record
of all the transactions in your checking
account.

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Chapter 29
Bank Statements
A bank statement includes a record of
all withdrawals, deposits, interest, and
fees.

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Chapter 29
Bank Statements
A bank statement also includes a
record of all canceled checks, or
checks you’ve written that have been
cashed.

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Chapter 29
Bank Reconciliation
Bank reconciliation is the process of
seeing whether your records agree
with the bank’s records for your
account.

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Chapter 29
Balancing Your Checkbook
The first step to reconciling your
account is to see whether the bank
has processed all your checks and
deposits.

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Chapter 29
Balancing Your Checkbook
Outstanding checks are checks that
have been written but haven’t yet been
cashed.

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Chapter 29
Balancing Your Checkbook
Deposits that haven’t been recorded
on the bank statement should be
added to the bank statement balance.

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Chapter 29
Balancing Your Checkbook
The service fee should be subtracted
from the balance in your check
register.

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Chapter 29
Balancing Your Checkbook
If your account earns interest, add the
interest shown on the bank statement
to your check register.

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Chapter 29
Balancing Your Checkbook
If the balances on your bank statement
and in your check register are the
same, you have reconciled (or brought
into agreement) your check register
balance with the bank statement
balance.

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Chapter 29
Finding Errors
If the balances on your bank statement
and in your check register don’t agree,
check your own account records to
see whether you wrote the correct
amount for each check and deposit.

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Chapter 29
Finding Errors
Check all your additions and
subtractions.
Check to see whether you carried the
correct balance forward for each new
page of your check register.

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Chapter 29
Finding Errors
Recheck to see that you have correctly
identified all of the outstanding checks
and deposits that haven’t been
processed by the bank.

Introduction to Business, Checking Accounts Slide 41 of 62

Chapter 29
Finding Errors
Check the bank’s additions and
subtractions.

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