© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 1

CHAPTER 23

BANKING AND CREDIT

23.1 Financial Institutions 23.2 Checking Accounts 23.3 Credit and Its Use

LESSONS

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 2

LESSON 23.1

FINANCIAL INSTITUTIONS

Name and describe the four major types of financial institutions

Discuss how electronic banking may change money management

OBJECTIVES

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 3

TYPES OF INSTITUTIONSAND SERVICES

Commercial banks Mutual savings banks Savings and loan associations Credit unions

Lesson

23.1

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 4

ELECTRONIC BANKING

Automated teller machines (ATMs) Telephone banking systems Computer banking systems Direct deposit or withdrawals Point-of-sale transfers

Lesson

23.1

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 5

DEBIT CARD

A debit card is a plastic card used to immediately transfer funds for a purchase from a bank account to a seller.

Lesson

23.1

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 6

LESSON 23.2

CHECKING ACCOUNTS

Describe types of checking accounts and how to open an account

Illustrate how to write and endorse a check, maintain a check register, make a deposit, and reconcile a bank statement

OBJECTIVES

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 7

UNDERSTANDINGCHECKING ACCOUNTS

Checks provide a safe and convenient way to pay bills.

Checks can be used as freely as cash. Using checks makes it easier to keep

good financial records.

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 8

TYPES OF CHECKING ACCOUNTS

Regular checking account Special checking account Negotiable order of withdrawal (NOW)

account Share draft account

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 9

OPENING A CHECKING ACCOUNT

Signature card Initial deposit

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 10

WRITING A CHECK

Date Payee Numerical amount Written amount Purpose or account number Signature

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 11

KEEPING A CHECK REGISTER

A check register is used to record checks written, deposits made, and other transactions.

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 12

ENDORSING A CHECK

An endorsement is your signature, sometimes with a brief message, on the back/left side of a check. Blank endorsement Restrictive endorsement Full endorsement

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 13

MAKING A DEPOSIT

The process of putting money into a checking account is known as making a deposit.

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 14

MONTHLY STATEMENT

The amount of each check and the date the bank received it

The deposits you made Any service charges Any interest earned Beginning and ending balances

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 15

BALANCING A CHECKBOOK

Comparing the bank statement with your check register is known as balancing (or reconciling) a checkbook.

Balancing a checkbook ensures that both you and your bank have recorded all the activity on your account correctly.

Instructions on how to balance your account are usually printed on the back of the statement.Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 16

LESSON 23.3

CREDIT AND ITS USE

Name and describe the two basic types of credit

Calculate the cost of credit

OBJECTIVES

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 17

CREDIT

Credit refers to the receipt of money, goods, or services in exchange for a promise to pay.

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 18

TYPES OF CREDIT

Loan credit Sales credit

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 19

THE COST OF CREDIT

The finance charge is the total dollar amount you pay for using credit.

The annual percentage rate (APR) is the percentage cost of credit on a yearly basis.

Lesson

23.2

© 2003 SOUTH-WESTERN PUBLISHING CHAPTER 23 Slide 20

WORKINGCareer Success for the 21st Centuryby Larry J. Bailey

Click on the title below to view the presentation for the next chapter.CHAPTER 24

BUDGETING, SAVING,AND INVESTING MONEY