Bank accounts

Review the following episode of TVOK News about bank accounts.

Shannon uses some bank terms in the video. Work with a partner to discuss what each term means:

• bank account
• chequing account
• savings account

Like Shannon shares with us in the video, we can deposit (or put) money into our bank account(s) and withdraw (or take-out) our money from our bank account(s). An individual can have more than one account with a bank and have accounts with several banks if they wish to.

In this learning activity, you will be learning about a chequing account, and using a cheque as another payment, rather than using cash.

Chequing accounts and cheques

As we learned from the TVOK News video, there are two main types of bank accounts – savings and chequing.

A chequing account allows you to withdraw and deposit funds more often without a lot of banking fees.

A savings account is used for customers to save their money for short-term and long-term financial goals.

What is a cheque?

Writing a cheque

When someone receives a cheque addressed to them, they take that cheque to the bank’s automated banking machine (ABM) or to a teller in the bank. They then receive that amount of money after the bank has made sure there are enough funds in the chequing account to transfer over to the recipient. Just a few years ago, ABMs began being able to scan and electronically read cheques. You can even scan cheques using your banking app on your phone!

Cleared cheque

The bank needs some time to clear a cheque. This means that the bank makes sure there is enough money in the account of the person sending the cheque before they can give the money to the person receiving the cheque. Depositing a cheque is different from receiving cash payment because it is not an immediate way of getting money.

Bounced cheque

If there is not enough money to transfer, then the cheque “bounces,” which is not good. If a cheque bounces, then the recipient does not get the money amount on the cheque that they are supposed to.

Cheques are not suitable for regular everyday transactions, like grocery shopping. Most large retail stores do not accept cheques as payment, but some service companies and smaller businesses may take cheques as payment.

Features of a cheque

“Writing a cheque” means the person holding the chequing account and cheque book must fill in specific information so the recipient can accept the cheque.

1. “Pay to the Order of” is where the name of the person or business who is receiving the cheque is filled in.

2. The date must be filled out correctly (this is the date that you are writing the cheque).

3. The numerical amount and the amount in word form must be filled in.

4. The bank account holder’s (person writing out the cheques) signature must be included at the bottom of the cheque.

5. The name of a bank is "Bank Name".

6. The cheque number is on the top right corner.

The series of numbers at the very bottom is information for the bank that receives the cheque from the recipient. These numbers are called the transit number (for the bank branch), the financial institution or bank number, and the account number. The following image is an example of a cheque with these numbers labelled.

Cheques can be provided by the bank to a customer as part of opening a chequing account. Cheques can be ordered and paid for by the customer.

Task 1: Features of a cheque

Work with a partner, if possible, and explore this example of a cheque. You will then answer some questions about the cheque.

Answer the following questions about the cheque:

• To whom is the cheque made out?
• What is the amount of this cheque?
• Who made out the cheque?
• What is the transit number?
• What is the financial institution number?
• What is the account number?
• When can available funds on the cheque be transferred? This means, what is the date on the cheque?

Record and share (if possible) your responses in the format of your choice. Are your answers similar?

Task 2: Cash or cheque?

Discuss or record your responses, whether cash or a cheque is a more appropriate form of payment in each situation and why.

1. Putting a down payment of $5,250 to purchase a car at a used car lot in-person.
2. Paying for groceries of an amount of $56 in-person.
3. Purchasing a series of ten massage treatments ahead of time and in-person for $913. The massages will be used for the year at a local self-employed massage clinic. The clinic does not have an ABM.
4. Going to the movies and being prepared to pay $10 for a ticket and $10 at the food counter for snacks.
5. Purchasing a hat for $20 at a sports store in-person.
6. Paying for a school trip fee of $10.
7. Paying for a Scholastic book order of $63.

Using a method of your choice, record some advantages and disadvantages of using cheques.

“Cheque” it out!

Questions

Explore the following six questions. Find an interesting way to respond to these questions. Can you use an audio recording? Paper? The computer?

1. What do you think are two positive things about using cheques as payment?
2. What do you think are two negative things about using cheques as payment?
3. What is one way that a bank is involved in the use of cheques?
4. What are the four features of a cheque?
5. What are three interesting things you learned about cheques?
6. What are two questions you have about cheques?

Reflection

As you read through these descriptions, which sentence best describes how you are feeling about your understanding of this learning activity? Press the button that is beside this sentence.

Now, record your ideas using a voice recorder, speech-to-text, or writing tool.