Checks

Checking Accounts

Definitions

• Checking Account: The "main" account where you money sits at the bank - checking accounts generally don’t pay interest.

• Check – a bank issued paper agreement to pay someone, which you fill out and give to people.

• Direct Deposit or Electronic Funds Transfer (EFT) – a transfer of ‘money’ where digits just move directly from one account to another. Fast, efficient, and more common than ever.

Definitions

• Insufficient Funds (INSF) – When you write a check or run a debit transaction and don’t have the money to cover it, it may be rejected by the bank for insufficient funds. Usually, this adds a fee to your account.

• Overdraft Protection – an online loan account that covers checks (with interest) when you don’t have enough money in the account. Usually limited, and may be expensive.

• Maintenance Fee – what the bank charges you to keep your account open.

Definitions

• Check clearing – when a check is given, it takes time to process and ‘clears’ when the bank gets it

• Check Register – paper document/book that you track your checks in. Used before on-line banking became common.

• Deposit Slip – the document you fill out to deposit cash into your account.

• Joint account – an account with two or more people – all of whom may write checks, take money out, and do “stuff” with the account

Example 1

Jackie deposited a $865.98 paycheck, a $623 stock dividend check, a $60 rebate check, and $130 cash into her checking account. Her original account balance was $278.91. Assuming the checks clear, how much was in her account after the deposit was made?

Deposit means she added money in to her account.

865.98 + 623 + 60 + 130 + 2789.91 = $4468.89

Example 2

Gary and Ann have a joint checking account. Their balance at the beginning of October was $9,145.87. During the month they made deposits totaling $2,783.71, wrote checks totaling $4,871.90, paid a maintenance fee of $12, and earned $11.15 in interest on the account. What was the balance at the end of the month?

9145.87 + 2783.71 - 4871.90 - 12 + 11.15 = $7056.83

Example 4

Allison currently has a balance of $2,300 in her checking account. She deposits $425.33 paycheck, a $20 rebate check, and a personal check for $550 into her checking account. She wants to receive $200 in cash. Fill out a deposit slip representing her transactions. What is Allison’s new balance?

Add her checks and subtract her cash to determine the net deposit.

Her current balance is

2300 + 795.33 = 3095.33

Fill in the Blanks

Example 1

Nick has a checking account with the Park Slope Savings Bank. For each transaction, Nick enters the necessary information. Determine the balance in his account after the Star Cable Co. check is written.

Subtract Payments

Add Deposits

Example 2

• Beginning balance on 10/29 is $237.47

• You write check 115 on 10/29 for $18.00 to Fox High School

• You deposit a paycheck for $162.75 on 10/30

• On 11/5, you use the ATM to get $20 for snacks at a sporting event

• Your credit card bill is due on 11/10, so on 11/7 you write check 116 to Credit USA for $51.16

Example 3

• Your sister repays you $45 on 11/10 and you deposit it

• You withdraw $20 from the ATM to buy flowers on 11/12

• You deposit a late birthday check for $35 on 11/17

$715.01

Example 5 - Check your Answer

256 - 312 = -56

Overdraft charge -56 - 33 = -89

Transfer from savings -89 + 250 = $161 balance

Multiple Choice

Your bank charges a $25 per check overdraft protection fee. If you overdrafted your account on 5 checks and have an account balance of -$100. How much do you owe your bank in total?

• $25

• $125

• $100

• $225

Multiple Choice

You have $750 in your checking account. You deposit one check for $100 another check for $225. You paid $625 in rent and $45 for your electric. How much money is left in your checking account?

• $405

• $1,095

• -$245

• $1,745

• $515

Multiple Choice

You have $550 in your checking account. You deposit a check for $50 and withdraw $75. What is your account balance after these transactions?

• $550

• $600

• $525

• $575

Multiple Choice

If you withdraw money from a checking account, you _____.

• add

• subtract

• multiply

• divide

Multiple Choice

If you deposit money into a checking account, you _____.

• add

• subtract

• multiply

• divide

Multiple Choice

What is a typical overdraft fee?

• $5

• $15

• $25

• $35

Multiple Choice

What is the benefit of direct deposit?

• Any overdraft fees are waived
• You don't have to spend time and energy depositing a check
• The funds from your paycheck are usually available between 3-5 business days
• You get a tax benefit from the Federal government

Multiple Choice

What should be written on line 6?

• the date
• the amount of the check
• who the check is going to
• your signature

Multiple Choice

The balance in your account is $500.  You then deposit $23 into your account.  What is your new balance?

• $500
• $477
• $523
• $23

Multiple Choice

How much is the check worth?

• $5

• $50

• $500

• $0

Multiple Choice

Shannon makes a deposit in her checking account. She has checks for $178.16 and $36.00. She gets back $20.00 in cash.
What is her total deposit?

• $214.16
• $198.16
• $194.16
• $234.16

Multiple Choice

Enrico wrote four checks last month, and these were the only transactions for his checking account. According to his check register, his balance is $893.48, but the bank statement he just received says his balance is $1076.32. If the four checks were for $173.75, $173.84, $182.75, and $182.84, the check for which amount has not yet cleared?

• $173.75
• $173.84
• $182.75
• $182.84

Multiple Choice

The checking account fees for Banks A, B, C, and D are shown in the table:
If a customer writes 26 checks per month, which bank will charge him the least in fees

• Bank A
• Bank B
• Bank C
• Bank D

Multiple Choice

At the beginning of this month, the balance of Vance's checking account was $697.96. So far this month, he has received a paycheck via direct deposit of $962.88, been charged a monthly service fee from his bank of $25.00, used a debit card linked to his account to make a purchase of $83.12, written a check for $138.83 that has already been deposited, and deposited a check written to him for $71.17. What is the current balance of Vance's checking account?

• $1620.38
• $1510.06
• $1485.06
• $787.10

Multiple Choice

Orrin had $541.06 in his checking account, and a check that he wrote to his landlord for $560.00 was just deposited.
This will result in which of the following fees?

• overdraft fees
• service fees
• atm fees
• over spending fee

Multiple Choice

This action allows movement of funds from one account to another.

• Transfer

• Debit

• Credit

• Loan