Chapter 5 Personal Finance

Signature Form

Provides official signature that the bank can compare to your checks

Numeric Amount

The column the amount of a check in

canceled check

A ________________ is one that has been cleared, or processed, by your bank and deducted from your account.

True

A money order cannot bounce

Demand Deposit

At any time "on demand"

Initial Deposit

Banks require a certain amount

Checkbook Register

Booklet used to record checking account transactions

Cancelled Check

Check that has cleared your account

Bounced (check)

Check that is returned to the payee's bank

Outstanding Checks

Checks that haven't been cleared by the bank (money may be withdrawn)

debit card

Definition: A bank card that deducts money from a checking account almost immediately to pay for purchases.

overdraft protection

Definition: A bank service that covers checks even if you have insufficient funds in your checking account.

checkbook register

Definition: A booklet used to record checking account transactions.

canceled check

Definition: A check that has cleared your account.

cashier's check

Definition: A check written by a bank on its own funds.

safe deposit box

Definition: A place at your bank available to store valuable items or documents.

stop-payment order

Definition: A request that the bank not honor a specific check.

share account

Definition: A savings account representing ownership interest.

demand deposit

Definition: A type of bank account from which money may be withdrawn at any time.

special account

Definition: A type of checking account that most banks offer to customers who have a small amount of activity in their accounts each month.

standard account

Definition: A type of checking account that usually has a small (or no) monthly service fee and no per-check fee.

ATM fee

Definition: An amount typically charged by an ATM that does not belong to your own bank.

NSF fee

Definition: An overdraft fee assessed when you spend more than you have in your account and don't have overdraft protection.

Safe deposit

Financial institutions offer ______________ boxes for customers to store valuable items or documents.

Restrictive Endorsement

For depositing only

float

If you ________ a check, you are risking the possibility of an overdraft on your account because today's electronic systems process checks so quickly.

Illegal

It is ________ to post-date a check (write a different date)

Blank Endorsement

Just sign a name and able to deposit (most dangerous)

$5-15 Average

Monthly Fee Services

$25-30 per event

NSF

NSF

Not sufficient funds

$25-30 per event

Overdraft Fees

fees

To avoid high bank ______, choose the type of account that best fits your needs and follow the account rules.

endorse

To cash a check, you may _________ it with a blank, special, or restrictive endorsement.

checking account

To open a _________________, fill out a signature form and make a deposit.

The base number for opening an account

Varies by bank and account, but the book says $50

Overdraft protection

With _______________, your checks will be covered even if you have insufficient funds in your checking account.

checking account

a demand deposit that provides a safe, convenient way to pay bills.

Floating (check)

writing a check and hoping to deposit money in the bank before the check clears

Responsibilities with checking accounts

1.) Filling out checks & deposit slips correctly 2.) Keep an accurate checkbook register 3.) Reconcile your account 4.) Endorse checks properly

Stop-payment

A ________________ order is a request that the bank not honor a specific check.

ABA

American Banker's Association

checking transaction

As soon as you make a __________________, record it in your checkbook register.

Overdraft

Check written for more money than the account contains

reconciliation

Comparing check register to bank statement

overdraft

Definition: A check written for more money than your account contains.

joint account

Definition: A checking account opened by two or more people.

electronic funds transfer (EFT)

Definition: A computer-based system that enables you to move money from one account to another without writing a check or exchanging cash.

notary public

Definition: A person who verifies a person's identity, witnesses the person's signature on a legal document, and then "notarizes" the signature as valid.

certified check

Definition: A personal check that the bank guarantees or certifies to be good.

bank reconciliation

Definition: The process of matching your checkbook register with the bank statement.

check float

Definition: Writing a check before a deposit has cleared the account.

Payee

Person receiving the check

Maker

Person writing or "making" the check

Substitute Check

Transmitted image of a check, can be used in the same way as an original

Debit card

You can pay for purchases or make ATM transactions using a _____________, which allows immediate deductions from your checking account.

Banks

________ offer individual accounts, joint accounts, special accounts, standard accounts, and money market accounts. Credit unions offer share and share draft accounts.

Certified, cashier's

_________ checks and _________ checks are guaranteed by the bank to be paid.

Reconcile

__________ your bank statement with your register each month and correct any errors.

Online, telephone

___________ and __________ banking enable you to make electronic transfers and access your account 24 hours a day.

Traveler's

____________ checks provide a readily acceptable and safe form of payment for people who are traveling.