Common payment servicesWhat are the common payment services provided by financial institutions?
Common payment services • Opening a checking account • Signing a signature card is the first step • This must be completed when the account is opened to verify name, signature, and personal information of account holder. • Use your full name, or names, if a joint account. • The signature on checks and debit card purchases must match the signature card
Common payment services • Endorsing a check for deposit • An endorsement allows the payee, the person receiving the check, to cash the check, deposit the check or transfer payment of the check to someone else. • The signature on endorsement must match the signature on the signature card of the account holder.
Common Payment Services • Different types of endorsements: • Blank • Sign the back of the check with the name that matches the front of the check and the signature card. • Full • This endorsement changes ownership of the check from the original payee to a new payee, The person cashing the check. • Restrictive • This endorsement limits what can be done with the check; usually “For Deposit Only”.
Blank Endorsement • Consists of endorser’s name only • Anyone who has a check with a blank endorsement may cash it.
Full Endorsement • Transfers payment of a check to someone else. • Can be used to make payment on a debt • Juan Delgado is the payee on this check.
Restrictive Endorsement • Limits use of the check so it can be deposited only to endorser’s account. • Safest type of endorsement, as it cannot be cashed by a thief or someone who finds the check. • Safest endorsement to use when mailing a check for deposit or when using the ATM for deposit.
Making a Deposit in Checking or Savings • Accounting Information • Depositors name • Account number • Date • List & Total Amount of Money Deposited • Currency • Coin
Making a Deposit in Checking or Savings • Checks • List separately • Identify by check number • Total the amount of checks to be deposited Totals • Total the amount of cash & checks • If you want cash back it must be deducted from the total • Signature is required if receiving cash back.
Check Writing Procedures Ensure all information is written in the check register first, and ensure checks are written in numerical order. Write the date the check is written. Write the payee’s name.
Check Writing Procedures continued • Write in the numerical amount of the check. • Write in the amount of the check in words. • Write in the purpose of the check. • Sign the check. • Complete the check register • http://www.moneyinstructor.com/ • Complete the check • http://www.moneyinstructor.com/
Withdrawals From a Savings Account Complete a withdrawal slip Record withdrawals in savings account register Withdrawals may be made using a bank card through electronic fund transfer (EFT) if the account has one.
Check Register Should be completed as checks are written Check number or transaction code must be recorded Date must be recorded Payee’s name and purpose of the check Amount of payment or withdrawal (ATM), or amount of deposit should be entered Calculate new balance Subtract fees, checks, & withdrawals Add deposits
Bank Reconciliation • What is a bank reconciliation? • A bank reconciliation is the document created to show how the two balances (your own record of your checking account and the bank’s record of your account) were brought into agreement. • What is an outstanding check? • Outstanding checks are checks that have not been deducted from the bank statement balance.
Steps in a Bank Reconciliation Obtain the monthly bank statement. Determine checks paid. Find differences between the monthly bank statement and monthly check register. Calculate the adjusted balance. If the balances do not agree, check the steps again and recalculate.