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Understanding Checking Accounts

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 Tool used to transfer funds deposited into the
account to make a cash purchase
 Could also be named a transaction account
 Common financial service used by many consumers
 Available at banks

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Services and fees will vary depending upon the
financial institution
Research bank and type of account before choosing
 Many financial institutions offer telephone and
internet banking services to customers

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Can help to manage money
 Written record of expenses
Check register
 Makes bill paying more convenient
 Reduces the need to carry large amounts of cash
 Most liquid of cash management tools
Considered cash

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Money is deposited into the account with a deposit
slip

 Pay the transaction by:

Writing a check
Using an ATM and/or debit card
Using electronic banking

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Funds are easily accessible through:
A check
Automated teller machine (ATM)
Debit card
Telephone
Internet

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Used at the time of purchase as the form of payment

 Piece of paper pre-printed with  To completed check, fill in

the account holder·s: the:
Name Amount
Address Payee
 To whom the check was
Financial institution written
Identification numbers Date
Signature

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Check written for an amount over the current balance
held in the account
¶Bounces· due to insufficient funds
 Assessed a substantial fee by both the financial
institution and the payee (approx. $40.00)
 Can cause harm to credit report
Financial institutions report to credit bureaus the account
holder·s failure/success to manage his/her checking account
properly
 Used as a guide for future inquiries for credit

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
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|  

 Register
Place to immediately record all monetary transactions for
a checking account
 Written checks, ATM withdrawals, debit card purchases,
deposits, fees, etc.
 Checkbook
Contains the checks and the register to track monetary
transactions

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Automated teller machine (ATM)
 Also called cash machines
 Electronic computer terminals offering automated,
computerized banking
 Allows customers to perform transactions just as
they would through a teller
Deposits, cash withdrawals, account transfers, check
account balances

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

 


 Transactions at an ATM are automatically posted
to account
 Immediately record all transactions into the
checkbook register
 Good option for evenings or weekends when
financial institutions are closed

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


 Available most places around the U.S. giving
customers access to money when away from home
Can also be found worldwide
 Found in a variety of places including:
Financial institutions
Supermarkets
Convenience stores
Shopping centers

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1




 ATMs are owned by different financial institutions
 Fees may be charged to the account for ATM use
 Fees range from $0.50 to $5.00
Usually free to account holders of the financial
institution

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Card given to account holder to make financial
transactions at ATMs
 In the shape of a credit card, but can only be used in
designated places
 Must use personal identification number (PIN) to
access the account
A protected number given or chosen by the account holder
to allow access to the account

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Required at ATM as a safety measure so other
people cannot access the account with the only the
ATM card
 Choose a PIN which is not easily identified
For example ² phone number, birthday
 Instead of requiring a PIN, some ATMs may read a
person·s face, fingerprint, or eye·s iris to confirm
identity

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 ooks like a credit card, but is connected to the
cardholder·s checking account for transactions
 Money is automatically withdrawn from account
when transaction occurs
 Prevents overdrafts
Transaction cannot be completed without sufficient
funds

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


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 Some are dual function cards
One card performs both functions for
ATMs and debit cards

 Clarify whether or not the card is

an ATM card, a debit card, or both

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 To make a purchase
Debit card is swiped like a credit card
Cardholder signs a printed receipt
 Record transactions immediately into check register
 Most can be used at retail establishments accepting
major credit cards
Many have the Visa or MasterCard logo

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


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Pros Cons
 Convenient  Can lose track of balance if
 Small transactions are not immediately
 Can be used like a written down
credit card  Opens checking account up to
 Allows a person to credit card fraud
carry less cash  If lost, anyone can use it
 Does not allow
 Someone else can gain access to
overspending
account if card is found and PIN is
learned

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


 



 Financial institutions offer different types of
checking accounts
All have own characteristics
Research all of the requirements and restrictions before
opening the account
 Basic types/guidelines include:
Regular checking
Free checking
Special checking
Interest-Earning checking
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 No monthly charge if minimum balance is
maintained
 No interest is given
 Unlimited check writing

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1



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 No charges or fees for using the account
 No minimum balance required
 Unlimited check writing
 Usually for a specific group:
Students
Seniors

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


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 Generally for people who write only a few checks
and keep a low balance
 Basic account which pays no interest
 Monthly service charge or fee for each transaction
 May have restrictions on number of transactions
each month

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1




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 Pays interest on money in account
Usually the lowest interest rate of all the cash
management tools
 Minimum balance required
 Unlimited check writing
 Called a share draft at credit unions

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
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 Most applications are completed on a computer to
process quickly
Customer may have to complete a brief hand-written
application to be entered into the computer by new
accounts personnel
 Customer must have:
Picture identification
Name, address, phone number, and social security number

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 If customer is approved, he/she completes a
signature card
Contains account information about the new account and
his/her signature
Used to verify the signature for each signed transaction
for the account to prevent fraud
 Completion of the signature card means the
customer agrees to all terms and conditions of the
account

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1



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— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 If offered, customers may choose to have an ATM
and/or debit card for the account
May be required to complete another form
 An initial deposit must be made
Amount will vary among different financial institutions
and type of account

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 New customers are provided starter checks to use until the
ordered checks arrive
Generic checks with account number and financial institution pre-
printed
Customer information is hand written
 Many businesses do not accept starter checks
Take this into consideration before making the initial deposit
Ordered checks may take 5 to 10 business days to arrive

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Personal information on checks
Name
Address
Optional: phone number, driver·s license number
DO NOT put the account holder·s social security number on
the check for security reasons

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Design of the check is customer·s choice
Customer pays for checks
 Price depends on the style
Style of the check does not change how a check works
Some financial institutions may offer basic checks free of
charge
 Single or duplicate checks are available

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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Single Duplicate (carbon copy)
 No records of written  Provides a written record of
checks each check with the carbon
 Each check must be logged copy
in the register immediately  Convenient in case the check
to track transactions was not recorded into
register immediately

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Endorsement
Signature on the back of the check from receiving person approving it for
deposit
A check must be endorsed to be deposited
 Three types
Blank
Restrictive
Special
 Safest way to endorse the check is to wait until going to the
financial institution to deposit or cash the check

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Receiver of the check signs

his/her name
 Anyone can cash or deposit
the check after has been
signed

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 More secure than blank

endorsement
 Receiver writes ´for
deposit onlyµ above
his/her signature
Allows the check to only be
deposited

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


 


! 


"

 Receiver signs and writes

´pay to the order of (fill in
person·s name)µ
 Allows the check to be
transferred to a second
party
Also known as a two-party
check

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


 
 Deposit slip
Contains the account holder·s account number and allows money
(cash or check) to be deposited into the correct account
ocated in the back of the checkbook
 Complete a deposit slip to make a deposit
Give to financial institution along with cash and/or check
Checks must be endorsed to be deposited
 Deposited amount must be recorded in the check register to
keep the balance current

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Date
The date the deposit is being made

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Signature ine
Sign this line to receive cash back

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Cash
The total amount of cash being deposited

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Checks
ist each check individually
 Identify each check on the deposit slip by abbreviating the name
of the check writer
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Checks
If more checks are being deposited
than number of spaces on the
front, use the back
ist each check
Add the total, enter it on the front

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Total from Other Side

The total amount from all checks listed on the back

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Subtotal
The total amount of cash and checks

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 ess Cash Received

The amount of cash back being received
This amount is not deposited into account
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Net Deposit
The amount being deposited into the account
To calculate the amount, subtract the cash received from the subtotal

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 To pay for items using a checking account
A check is given as a form of payment
Must be completed and given to the person or business
 Pre-printed items on a check
Name and address of account holder
Name and address of financial institution
Check number
Identification numbers (account, routing)

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Personal Information
Account holder·s name and address
May include a phone number, not required
DO NOT list a social security number for safety reasons
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Check Number
Numbers used to identify checks
Printed chronologically
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Date
The date the check is written

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Pay to the Order of

The name of the person or business to whom the check is
being written
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Amount of the Check in Numerals

The amount of the check written numerically in the box
Write the cents smaller and underline
Write the numbers directly next the dollar sign to prevent someone else from adding
numbers to change the amount
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Amount of the Check in Words

The amount of the check written in words on the second line
Start at the far left of the line, write the amount in words, followed by ¶and·, and the
amount of cents over 100; draw a line from the end of the words to the word
¶dollars·
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Memo
Space used to identify the reason for writing a check; optional
Good place to write information requested by a company when paying a bill,
generally the account number

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Signature
The account holder·s signature agreeing to the transaction

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Identification Numbers
First - routing numbers to identify the account·s financial institution
Second - account number
Third - check number

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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#$
 Check Clearing for the 21st Century Act (Check 21)
Current trend that changes how money is withdrawn
from customers account and deposited into businesses
account

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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#$' 

Prior to Check 21
 Paper checks physically moved from customer to business
to various banks and the transfer of money from
customer·s bank to business· bank took days
After Check 21
 Paper checks are scanned into a computer system at the
place of business and immediately returned to the
customer. This electronic copy of the check is called a
substitute check. The substitute check is then transferred
electronically to various banks and the transfer of money
customer·s bank to business· bank takes hours
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë


 Place to immediately record all monetary
transactions for a checking account
 Written checks, ATM withdrawals, debit card purchases,
deposits, fees, etc.
 Used to keep a running balance of the account
 Remember -
Record every transaction!

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

|
ë



 Date
The date the check was written or transaction was made

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë



 Number
The number of the written check; if a debit card or ATM
was used, write DC or ATM
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë



 Description of Transaction
The person/business the check was written to or where the debit card was
used
Gray line can be used to write the memo
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë



 Payment/Debit(-)
Amount of the transaction
Deducted from the balance
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Deposit/Credit(+)
Amount of the transaction
Added to the balance
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë



 §T
A box used to track whether the check has cleared on the monthly bank
statement when reconciling at the end of each month

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë



 Fee (if any)

Any extra fees charged to the account
isted on the bank statement
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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ë



 Balance
The running total of the checking account
Calculated by adding or subtracting each transaction
Keep this updated
— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

  


 ists each monetary transaction and the current account
balance for a specified time period
 Includes:
Dates
Identification for each transaction (number or type, date,
amount)
Transaction amounts for withdrawals and/or deposits
Interest earned (if applicable)
Fees or charges (if applicable)

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

  


 


 If customer holds more than one account at the
same financial institution
May receive one statement for both
 For example: a checking and a
savings account
May be mailed separately

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 |




 Reconcile
Balance the checkbook register each month to the balance
shown on the statement
 Do this every month to ensure the correct balance in
the checkbook
Knowing the correct balance can help to avoid bouncing
checks

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


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 Make sure every transaction listed on the statement matches
the check register
 Place a check next to each item once it has been double-
checked between the statement and register
Do this for both withdrawals and deposits
 Identify any outstanding transactions in the check register
Items which have not cleared through the financial institution and
are not listed on the statement

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


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 Start with checking account balance on the
statement
 Add any outstanding deposits
 Subtract any outstanding withdrawals
 Compare this result with the current balance in the
check register
They should be the same

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Statement balance $204.00
 Add $154.01+
Outstanding deposits
 8/30 - $154.01
 Subtract $44.75-
Outstanding withdrawals
 #299 - $19.75
 #300 - $25.00

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 Total $313.26

 Remember - this figure should be the same as the

check register

 If not, double-check the math, look for mistakes

Make sure all service fees and charges have been added to
the check register

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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 If a checkbook, ATM, and/or debit card becomes
lost or stolen
Immediately report it to the financial institution
File a report with the police
 Reported lost/stolen checkbook:
Financial institutions generally do not hold the account
holder liable for any fraudulent charges

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1


 


 Reported lost/stolen ATM/debit card:
Within 2 business days
 Cardholder is only liable for $50.00
onger than 2 business days
 Could be liable for up to $500.00
Varies depending upon the financial institution
 May not charge the account holder anything if the correct
steps were taken to report the lost/stolen card

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman
 1.7.1.G1

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Research before choosing a financial institution and
checking account!

Follow the precautions to prevent checking account

fraud!

Report a lost/stolen checkbook, ATM, and/or debit

card immediately!

— Family Economics & Financial Education ² Revised October 2004 ² Financial Institutions Unit ² Checking Account Simulation
Funded by a grant from Take Charge America, Inc. to the Department of Health and Human Development at Montana State University ² Bozeman