Bussiness Math: Checking Account
Bussiness Math: Checking Account
Bussiness Math: Checking Account
Checking Accounts
You’re hired!
Those may be two of the best words you’ll ever hear. You’ve finally got money coming in! However, that likely also
means money going out.
How do you track your money to make sure that you don’t have more going out
than coming in?
OBJECTIVES
Evaluate and compare the costs of online banking and of checking accounts.
Balance a checkbook.
VOCABULARY
unique identifying number for each account in a bank’s system, typically nine to
account number
twelve digits
unique identifying number of each check for an account, located in the upper right
check number
corner
check register ledger used to track deposits and withdrawals from a checking account
account at a banking institute used to deposit and withdraw funds through use of
checking account
checks
signature on the back of a check by the payee to identify that person or organization
endorsement
as the recipient of a check payment
routing number unique nine-digit identifying number assigned to every banking institution
1.
Which of the following are unique identifiers associated with checking accounts?
Checking accounts offer the ability to deposit and withdraw funds in a convenient way, using checks as payment for
services. Different banks have different types of accounts and various fees for services. When you open a checking
account, the bank will send you a box of checks printed with your account information and your personal information,
usually name, address, phone number, and driver’s license number. Most banks make you pay for these checks, but
some banks and credit unions will waive the fee for your first box of checks. Ordering more checks will almost certainly
come with a cost.
The layout of a check is standard among all banks and financial institutions. Watch the video to learn more about checks
and how to use them.
Show Transcript
Depositing a check also requires you to fill out one line: the endorsement or signature on the back of the check. Any
check that you get requires you to sign on the back. This is best done at the bank, in front of the teller.
Most banks will charge a fee for processing a check unless you maintain a minimum balance. If you have difficulty
keeping a minimum balance, prepare to pay a fee for every check you write. In addition to fees for processing checks,
there is usually a monthly fee. Before opening an account, shop around at different banks and credit unions. Some banks
will charge a monthly fee that includes a fixed number of checks for the month. Other banks will not charge a monthly
fee but may charge more for each check.
Along with checks, you will get a debit card. This card works at ATMs and most stores without using checks. Be sure to
ask the bank what fees they charge for using debit cards. You most likely will be able to use the card at your bank’s
ATMs but will have to pay a fee to withdraw money from other ATMs.
A last word of caution about bank fees. The most costly fee from any bank is for writing a check with non-sufficient
funds (NSF). Not only will your bank charge you a lot, the person or business where you tried to pay also can make you
pay a fee. These fees can be $25 to $50! One way to protect yourself is to ask the bank to give you overdraft protection.
Although you will pay every month for overdraft protection, it will cost much less than if you make a mistake balancing
your account and get hit with an insufficient funds fee.
2. Which do banks recommend that you use to write a check? Select all that apply.
Now that you know how to write a check, it’s time to learn how to
track the money coming in and going out of your account. When you
use a debit card to pay for something or to make a withdrawal, the
money is debited—taken from your account—right away. With checks,
the money is sometimes not taken from your account for two or three
days. Whether you use a check or a debit card, you must track of your
spending. Regularly balancing your checkbook will help to ensure that
you know how much money you have available to spend and the
status of checks you have written.
This video will show you how to use a check register to track deposits and withdrawals from a checking account.
Signing up for online banking allows you to check your account any time you login on the internet or with your cell
phone. You can check your debits, find out if a check has cleared, make sure that a deposit has posted, or just check your
balance. Online banking lets you manage your account whenever you want and not be dependent upon the hours your
bank is open.
Another advantage of online banking is the bill-paying feature. This allows you to set up single payments or automatic
periodic (monthly or yearly) payments that your bank sends directly to the payee. Most banks do not charge fees for this
electronic service. Again, be sure to check with your bank so you know what, if any, fee is charged. Some banks also
offer electronic funds transfer (EFT) that allows you to directly transfer money to the person you owe.
Floyd needs to update his check register. His balance at the beginning of August was $345.79. Floyd receives paychecks
of $850 on the first and fifteenth of each month as direct deposits from his employer. Because the amount is the same
each month, he uses his bank’s bill payer service to send checks of $550 for rent and another of $62.50 to his internet
provider to arrive on the fifth of each month. Floyd then mails checks to pay his August gas bill of $26.38 and electric bill
of $58.93. Two days later, he uses his debit card to buy groceries at Super Shop for $92.36. He also stopped by Guitar
Shop, where he gave two lessons and was paid $100 that he later deposited. While at the store, he used his debit card to
purchase an amp for $440.56.
4. Eight components to a check register were discussed in the lesson. Name a minimum of 6 of the 8 column headings
and describe what information will go in that location. Use complete sentences.
LET'S REVIEW!
Banking institutions, checking accounts, and checks all have unique identifying numbers.
All sections of a check must be completed, with the exception of the memo.
Do not sign a check until it is filled out completely, and always write using cursive in black or blue ink.
Keep your check register up to date to make balancing easier each month.
account
1. unique nine-digit identifying number assigned to every banking institute
number
checking unique identifying number of each check for an account, located in the upper right
2.
account corner
3. check number ledger used to track deposits and withdrawals from a checking account
4. check register account at a banking institution used to deposit and withdraw funds through use of
checks
routing unique identifying number for each account within a banking institution, typically
5.
number nine to twelve digits