FINANCIAL LITERACY: Checking Accounts

Vocabulary
check register, checking account, deposit, transfer, withdrawal
Key Concept
TEKS 6(1)(A), 6(14)(C)
A banking transaction moves money into and out of a bank account. A transaction can increase or
decrease the amount in the account.
A transaction that adds money to a bank account is a deposit. Suppose you deposit money into your
checking account. The balance of your checking account will increase.

A transaction that takes money out of a bank account is a withdrawal. Suppose you withdraw money
from your checking account. The balance of your checking account will decrease.

A transaction that moves money from one bank account to another is a transfer. The balance of one
account increases by the same amount the other decreases. If you transfer $500 from your savings
account to your checking account, your savings account balance decreases by $500 and your
checking account balance increases by $500.

Part 1
TEKS 6(1)(A), 6(14)(C)
Example Distinguishing Between Deposits, Withdrawals, and Transfers
What is the best description for each transaction a deposit, a withdrawal, or a transfer?

a. You take $25 out of your checking account at an ATM.

b. You add money from a paycheck into your checking account.
c. You move money from your checking account into your savings account.
d. You pay for groceries using your debit card.
Solution
Deposits

b. You add money from a paycheck into your checking account.

Withdrawals

a. You take $25 out of your checking account at an ATM.

d. You pay for groceries using your debit card.
Transfers

c. You move money from your checking account into your savings account.
Part 2
TEKS 6(1)(A), 6(14)(C)
Intro
You can use a check register to keep a record of all transactions involving your checking account.
Each transaction you make will change the balance of the checking account. The balance is the total
amount of money in the account after each transaction.

You record each transaction on its own row. Include the date you made the transaction, and the
check number if you write a check. If you use your debit card, you can write debit in place of the
check number. In the description field, enter a short note so that you can identify the transaction later.
If the transaction withdraws money from your account, record the amount in the payment column. If
the transaction adds money to your account, record the amount in the deposit column. You can also
record the amount of the transaction under the previous balance. Then add or subtract to find the new
balance in the amount.
Example Balancing Check Registers
Coach forgot to balance his check register. Help Coach to balance his check register. How much
does Coach have in his account?

Solution
Add the amounts of the two deposits. Subtract the amount of the withdrawal.

Coach has $2,100.26 in his checking account.

Part 3
TEKS 6(1)(A), 6(14)(C)
Example Comparing Account Balances to the Cost of an Item
You transferred $35 from your savings account to your checking account on April 10th. After the
transfer, do you have enough money in your checking account to buy a concert ticket that costs $60?
Explain.

Solution

After the transfer to your checking account, your checking account balance is $94.82. The balance is
greater than $60. Yes, there is enough money in your checking account to buy a concert ticket that
costs $60.