Basic Banking Services - Activity 1

ACTIVITY 1

Why Do YouNeed a Bank?

Overview

• Purposes of banks• The differences between banks and

credit unions• Safety of financial institutions• Banks as money management tools• The Earned Income Tax Credit

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SAFETY OF FINANCIAL INSTITUTIONS

COMMERCIAL BANKS CREDIT UNIONS

Slide 1 – Safety of Financial Institutions Lesson Reference: Basic Banking Services, Activity 1 – Overhead 3 2

ELECTRONIC BANK SERVICESOnline banking is the fastest growing

Internetactivity in the U.S.

Types of Services

•Bank Cards

•Automated Services

Protect Your Passwords!Slide 3 - Electronic Bank Services

Lesson Reference: Basic Banking Services, Activity 2 – Overhead 3 3

BANK CARD TYPES

Slide 4 - Bank Card Types Lesson Reference: Basic Banking Services, Activity 2 – Overhead 4

TYPE• Check Cards or

ATM/Debit Cards

•

Stored Value Cards

DESCRIPTION• Bank cards that allow for the

payment of goods and services to be subtracted directly from a bank deposit account.

• Can be used with merchants that take major credit cards—known as point of sale (POS) transactions.

• Bank cards with preset, limited value.

• Used to pay for goods and services.

• Alternative to cash.4

ELECTRONIC BANK SERVICES

• Direct Deposit

• Transfers between Accounts

• Transfers to a Third Party

• Online Banking

• Bank by Phone

• ATM

Slide 5 – Electronic Bank Services

Lesson Reference: Basic Banking Services, Activity 2 – Handout 3 5

REGULATION OF ELECTRONICBANKING SERVICES

Electronic Fund Transfer ActProtects consumers using any type of electronic banking from loss and protects their privacy.

Banks must:• Offer consumers a record or receipt for all

computer transactions.• Investigate errors and report to consumer within

ten days of error notification.

Customers are responsible to report any errors.Slide 6 - Regulation of Electronic Banking

Lesson Reference: Basic Banking Services, Activity 2 – Overhead 5 6

Slide 1 - Checking Account Terms Lesson Reference: Basic Banking Services, Activity 3 – Handout 1

CHECKING ACCOUNT TERMS

•Bank Statement•Cancelled Check•Check•Check Register/Ledger•Endorsement•Fee• Interest•Minimum Balance

•Outstanding Transactions

•Overdraft•Overdraft Protection•Payee•Reconciling a Bank

Statement•Transaction Limits

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Slide 2 - Shopping Around Lesson Reference: Basic Banking Services, Activity 3 - Handout 2

SHOPPINGAROUND

(THINGS TO ASK ABOUT

WHENOPENING A CHECKING ACCOUNT)

SERVICESLocation of bankLocation of ATMsBanking hoursMinimum balance requiredMinimum transactions or limitsInterest-bearing accounts?Other

COSTSNon-primary bank ATM transactionsIn-branch transaction feesPer-check feesOther checking feesOverdraft protectionPrinting of checks

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Basic Banking Services - Activity 4

ACTIVITY 4

Opening a Checking Account

Overview

• Checking Account Application Process• The Application• Acceptable Forms of ID• The Signature Authorization Card• The PATRIOT Act

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Slide 1 – Opening a Checking Account

Lesson Reference: Basic Banking Services, Activity 4 – Handout 1

OPENING A CHECKING ACCOUNT

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Slide 2 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2

Primary ID*

•Photo Driver’s License issued

within the U.S. or Canada

•State Non-Driver Photo ID

•Photo Learner’s Permit

•Government Photo ID

•U.S. Passport

•Non-U.S. Passport

•Resident Registration Card

•Mexican Consular ID (Matricula Consular)

* Financial institutions' ID requirements may differ; check with the institution first before applying for an account.

COMMONLY ACCEPTED FORMS OF ID

•Naturalization Certificate

•Employee Photo ID (from a recognizable employer)

•Photo Trade License (barber, plumber, electrician, etc.)

•Student Photo ID (college/trade school)

•Medicare Card (must be 65 or older)

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Slide 3 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2

Secondary ID*

•Pay Stub

•Car Registration

•Mortgage Statement

•Letter of Introduction from Bank, Embassy, or well-known Employer

•Welfare Card

•Supplemental Health Insurance Card

* Financial institutions' ID requirements may differ; check with the institution first before applying for an account.

COMMONLY ACCEPTED FORMS OF ID

•Foreign Driver’s License

•State/Local Gun Permit

•Utility Bill (Name and address

of individual account should be listed)

•Current Bank Statement

•National Credit Card

•Bank-issued Debit or Check Card

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THE PATRIOT ACT

Congress passed the PATRIOT Act in response to the terrorist attacks of September 11, 2001. Financial institutions are now required to collect certain information when a new account is opened.

Slide 4 – The PATRIOT Act

Lesson Reference: Basic Banking Services, Activity 4 – Overhead 1

1. The customer must provide identification that includes name, date of birth, address, and identification number.

2. The institution must maintain a copy of the information used to verify the person’s identity.

3. The institution must determine whether the applicant appears on the lists of known or suspected terrorists or terrorist organizations.

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Slide 5 – Signature Authorization Card

Lesson Reference: Basic Banking Services, Activity 4 – Handout 3

SIGNATURE AUTHORIZATION CARD

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Basic Banking Services - Activity 5

ACTIVITY 5

How to Write a Check

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Slide 1 - Writing a Check Lesson Reference: Basic Banking Services, Activity 5 – Handout 1

WRITING A CHECK

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Basic Banking Services - Activity 6

ACTIVITY 6

Maintaining aChecking Account

Overview

• Check 21• Keeping a check register• Making a deposit into a checking account• Reconciling a bank statement• Maintaining a checking account• Avoiding Overdrafts

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Slide 1 – Check 21

Lesson Reference: Basic Banking Services, Activity 6 – Handout 1

CHECK 21

Check 21 is a federal law that helps banks handle more checks electronically and that makes check processing faster and more efficient.

Under this law, a check deposited in a bank is typically “delivered” overnight to the paying bank and deducted from the checkwriter’s account on the next business day.

Money may be deducted from your checking account almost immediately.

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KEEPING A CHECK REGISTER

Slide 2 - Keeping a Check Register Lesson Reference: Basic Banking Services, Activity 6 – Handout 219

Slide 3 - Making a Deposit - Endorsing a Check

Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

MAKING A DEPOSIT - ENDORSING A CHECK

Restrictive Endorsement(most secure)

Blank Endorsement(least secure)

Endorsement to a third party

The Back Side of a Check

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Slide 4 - Making a Deposit - Completing a Deposit Slip Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

MAKING A DEPOSIT - COMPLETING A DEPOSIT

SLIP

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Slide 5 - Reconciling a Bank Statement Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

RECONCILING A BANK STATEMENT

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OVERDRAFTS AND BOUNCED CHECKS

Overdrafts and bounced checks occur when you complete a financial transaction (e.g., write a check) for more than what is available in the account. Your financial institution may pay the amount and charge you a fee, known as an “overdraft fee” or a “nonsufficient funds fee.”

Tip: Avoid overdraft or non-sufficient funds fees by making a habit of monitoring the balance in your checking account.

Slide 6 – Overdrafts and Bounced Checks Lesson Reference: Basic Banking Services, Activity 6 – Overhead 1 23

Basic Banking Services - Activity 7

ACTIVITY 7

The ABCs of aSavings Account

Overview

• Purpose of a savings account• Shopping for a savings account• Applying for a savings account• Monthly bank statement checkup

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REASONS TO SAVE

• Emergencies

• Future Purchases

• Future Investments

Slide 1 - Reasons to Save Lesson Reference: Basic Banking Services, Activity 7 – Overhead 125

SHOPPING FOR A SAVINGS ACCOUNT

Factors to consider:• Safety• Risk• Liquidity• Minimum Account Balance Requirements• Fees and Service Charges• Interest Rate • Returns (Earnings)• Automatic Transfer• Direct Deposit

Slide 2 - Shopping for a Savings Account Lesson Reference: Basic Banking Services, Activity 7 – Overhead 226

OPENING A SAVINGS ACCOUNT

Slide 3 – Opening a Savings Account Lesson Reference: Basic Banking Services, Activity 7 – Overhead 327

Slide 4 – Bank Statement Lesson Reference: Basic Banking Services, Activity 7 – Overhead 4

BANK STATEMENT

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