CHAPTERS 9 & 10

WHERE TO STASH YOUR CASH

LEARNING TARGETSStudents can…

• Explain how banks make a profit• Identify types of checking accounts• Fill out a deposit slip• Write a check• Describe the different check endorsements• Record withdrawals and deposits in a check register• Reconcile a bank statement• Explain how debit card and ATM transactions work• Explain the benefits of online banking & bill pay

Banks are a business; they

work to make a profit.

HOW DO THEY MAKE A

PROFIT???

HOW DO THEY MAKE A PROFIT?

•Fees•Overdraft Charges•Interest on loans

Banks charge interest to borrowers, but pay a interest to those who deposit money into their acc’t. The difference is their profit.

FDIC = Federal Deposit Insurance Corporation; they insure your deposits.

Advantages of Using Checks

* Safe* Convenient

* Keeps a record of your transactions

Checking Accounts

Must be 17-18 years old to open an account.

Overdrawing/Bounced Checks = writing a check for more money than you have in your account.

Types of Checking Accounts

1) Interest Bearing Checking

2) Non-Interest Bearing Accounts

Interest Bearing Checking

• Banks lend money deposited into your account and in return; you earn interest.•Must have a min. balance in

account.

Non-Interest Bearing Accounts

•No minimum balance• Receive no interest• Service Charge = a charge

placed on each check you write or it can be a flat fee.

Electronic Banking

EFT = Electronic funds transfer ATM = Automated teller machine

• To use the ATM, you must have a PIN #.

•PIN # = A secret number that identifies you at the ATM.

ATM functions

•make deposits•make withdrawals• transfer money from one acct. to

another• buy stamps• check account balance

Debit Cards/Check Cards

•Similar to a credit card except money is taken electronically out of your checking acc’t.

Automatic Withdrawal • You give a creditor

permission to automatically withdraw money from your checking to pay a bill.

Direct Deposit• Your employer deposits

your paycheck directly into your account at the bank.

Other Banking Terms & Services

Canceled Check

A check the bank has paid (cleared).

Certified Check A personal check that has been stamped “certified” (meaning it is good) by a bank official.

Cashiers Check

A bank check signed by a bank official.

Money Orders Used if you don’t have a checking acc’t. or do not wish to use cash.

Safe Deposit Box

A locked box at the bank that contains your valuables.

INTEREST

Compound Interest

•Interest that compounds or builds each day and is paid to you by the bank.