Chapter 5

Banking Procedures

Introduction to Checking Accounts

•A check is a ______

•Checking account

–Is a ______deposit in a bank or other financial institution

–Provides a safe place to ______

–Provides easy ______to the money

•The ______insures accounts for up to $______per depositor per bank

Opening an Account

To open an account, you will need to

–Provide ______data and ______

–______money

–Each person on the account that writes checks must fill out a ______for security purposes

Bank Fees

•Some banks charge ______fees for holding an account with them

•Checking accounts sometimes pay ______but may have a minimum deposit in order to avoid any ______

•Some banks charge for every ______written

Keeping a Checkbook Register

•Checks and a checkbook register are received when you ______an account

•A checkbook register

–Can be used to ______checking account transactions

–Can provide a record of payments made for ______or ______

–Shows ______money is in the account

–Tracks checks, ______, deposits, and fees

Sample Checkbook Register

Writing Checks

•Use ______to write the data on checks

–The current ______

–The name of the ______

–The ______in numbers and words

–Your ______

–A note on the ______line

•If you make a mistake

–Write ______on the check and in the ______

–Begin a new check

Sample Check

Parts of a Check

•Payee – the person or entity ______the check (Pay to the order of…)

•Memo – a note to indicate what the money is ______for (lawn care, hair cut, etc.)

•Other – ______, ______, ______out amount, ______

Using Debit and ATM Cards

•Debit card

–Allows the account holder to ______cash at an ______

–Can be used to make ______

–The withdrawal is made ______

•ATM card

–Allows the account holder to ______cash or make ______at an ATM

PIN Number

•Both Debit and ATM cards require a______identification number or PIN number in order to access the account.

•The PIN number is required for ______deposits and withdrawals at an ATM machine AND inside a bank

•The PIN number you choose should be ______for someone to guess (don’t use your birth date, phone or social security number but choose something you can remember)

Protecting Account Data

•Crimes can be committed using ______and ______data

–Check ______and ______

–Identity ______

•To help prevent crime

–Keep cards and account______in a safe place

–Protect your ______or password when using cards

Making Deposits

•______checks to be deposited

•3 types of endorsements

Making Deposits

•Complete a deposit ______, including

–Current ______

–______of cash (bills and coins)

–Check ______and amounts

–Total amount of ______and ______

–Cash amount ______, if any, and your ______

–______deposit amount

•______the deposit in the check ______

Reconciling a Bank Statement

•Bank statements

–Come in ______or ______form

–Show the checks, other withdrawals, and ______made to an account

•Purpose of a bank ______

–To ______the bank ______

–To update the ______register

–To bring the statement and register balances into ______

Focus on...

Check Cashing Services

•Are businesses that charge a ______to cash a check

•Charge fees that vary by ______and by the ______of check being cashed

•May also make ______loans

The Purpose of Savings

•Saving means ______money to use for ______needs

•A savings account

–Is a ______deposit in a bank or other financial institution

–Is a ______way to set aside money

–Typically pays ______

–May have some ______on how quickly or easily the money can be ______

Principal - ______

Computing Interest

•Money deposited in a ______account typically earns a set rate of ______

–Simple interest

Computing Interest

–Compound interest

Savings Options

•______of deposit

•Money ______accounts

•Individual ______arrangements (IRAs)

•U.S.______bonds

•The TreasuryDirect Web site provides information on ______bonds and may be ______there as well.

Meeting Financial Goals

•When choosing a savings ______, consider

–The ______to save

–The length of ______you will save

–The ______you can earn

•Use the Rule of ______to estimate how long it will take the money to ______at a certain interest rate

Rule of 72 Example

•If you invest $100 with a ______interest rate of 9% per annum, the rule of 72 gives 72/9=8.0432

•Therefore it will take approximately 8 years for your $100 investment to become $200

•This is for compound interest, ______simple interest

•Therefore if the annual interest is 9% it doesn’t matter if you invest $1 or 1 million dollars, the amount of time for it to double is the ______! 

Bank Services

•Safe ______box

•______protection

•Cashier’s ______and ______orders

•______payment

•______cards

•Bank ______

Success Skills

Negotiating

•Means working to reach an ______that benefits you

–Understand your ______(what you want)

–Understand the ______position

–Create a proposed ______

–Be willing to ______when appropriate

Ethics

Writing ______Checks

•A bad check is one ______

•______your account carefully to avoid writing a bad check by ______

•Show ______behavior by not writing a bad check ______

Technology Corner

Internet Banking

•Involves banking using ______or ______access to bank accounts

•Offers various services

–______payment of bills

–______of money between ______

–Checking that deposits are ______

–Seeing which ______have been processed

–Seeing ______or ______that have been posted

Federal Reserve System

•Is the ______bank of the ______

•Seeks to provide the nation with ______, ______, and ______monetary and financial systems

Monetary Policy

•Key interest ______are controlled by the ______

–______rate

–Federal ______rate

–______rate

•The Fed sells and buys U.S. government ______in open-market transactions

–______bills (Treasury bills)

–______notes

–Treasury ______

Monetary Policy

•The ______plays a major role in operating the country’s ______systems

–Reserve banks act as a ______for checks

–Checks may be ______from your account in a single ______day

•The Fed ______the banking industry

–All ______banks must be Fed ______

–______banks are also subject to ______rules