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Checks that haven't been cleared by the bank (money may be withdrawn)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Definition: A type of bank account from which money may be withdrawn at any time.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.
