Chapter 8 Financial Institutions and Services 187
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What are the fees per month and per check?
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Does the institution offer an interest-bearing checking account? If so,
what is the interest rate and the minimum balance required?
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What other services are offered in connection with different types of
accounts?
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What fees are charged for different services and accounts?
Three common types of checking accounts—basic, interest-bearing,
and lifeline—are described here.
Basic Checking Account
This type of account permits you to deposit and withdraw your
money and write checks. It usually requires a minimum balance to
avoid service charges. If you fall below this minimum, you are charged
a fee. There also may be a monthly service charge and a fee per check.
Fees vary from one financial institution to another. A basic account
may be a good choice if you write many checks and can keep the mini-
mum balance.
Interest-Bearing Checking Account
This is a combination savings and checking account. Your money earns
interest, and you can write checks on the account. In credit unions, these
accounts are called share drafts. In banks and savings and loan associations,
they are called negotiable orders of withdrawal or NOW accounts. Financial
institutions offer this account with varying interest rates, minimum-
balance requirements, and service charges.
Lifeline Checking Accounts
These relatively new accounts are intended for low-income customers.
In some states, banks are required by law to make these accounts available.
They feature low minimum-deposit and minimum balance requirements,
low monthly fees, and limits on the number of checks that may be written
per month.
Opening a Checking Account
Opening a checking account requires only a few simple steps. Certain
restrictions may apply if you are under 18 years of age. Some banks require
a parent or guardian to be on the account with you.
When you open an account, you are asked to sign a signature card.
This is the only signature the fi nancial institution will honor on checks and
withdrawal slips. Over the years, you will sign contracts, Social Security
forms, tax forms, and other documents. Sign your name the same way on
all these documents to avoid confusion, 8-5.