MARCH 31, 2015

Entry task: List two things you learned about banks and two things you learned about credit unions.

Target: Identify the importance of shopping around in search of a financial institution.

LEADERSHIP CARDS

Half way through the semester… should have 50 leadership points!

Options: box of Kleenex Videos that are relevant for class Anything else? Just ask!

PORTFOLIOS

TURN THEM IN….LIKE NOW! I’m emailing home missing portfolios They are worth 175 points! Woah!

Graded! Hand back :) Overall super impressed!

THE SOLUTION TO RUNNING LOW ON MONEY ISN’T TO START SPENDING MORE.

OPTIONS:

1. If cash, can save and use Is this a good idea?

OR deposit into bank account

2. If check, can cash or put into bank account!What kind?What if I don’t have one?

PROS AND CONS OF CASH

Readily available You “always” know

where it is Reduces risk of

fraud You’ll never lose

more than the cash on hand

If lose wallet, typically out of luck!

Difficult to pay bills with cash

Must track own spending, no banking transactions to refer back to

Pros Cons

PROS AND CONS OF BANKING

Tracks spending Don’t have to carry

a bunch of cash Can earn interest Ease of paying bills,

especially online! If lost, can cancel

cards and spending

Increased risk of fraud

When using a card (debit card) easier to overspend

Pros Cons

BANK ACCOUNTS

Main types of bank accounts:

CheckingIntended for use of money for daily expenses

SavingsIntended to store money for later

CHECKING ACCOUNTS

Financial institutions usually have more than one type of checking account. You must decide what best meets your needs.

CHECKING ACCOUNTS

When opening a checking account at a financial institution the customer enters into a contractual agreement that allows the customer to deposit money in the bank and to write checks on that account, or use virtual checks, through a debit card

CHECKING ACCOUNTS

The financial institution agrees to maintain the account, provide records, and honor checks. Checks are safe, convenient, and provide a receipt for proof of payment.

TYPES OF CHECKING ACCOUNTS

FREE CHECKING ACCOUNTS are totally free checking accounts. There is no minimum balance requirement or service charges on these accounts. These are usually the best checking accounts for the customer.

TYPES OF CHECKING ACCOUNTS

MINIMUM BALANCE ACCOUNTS require the customer to maintain a certain balance, usually $100.00. If the depositors account balance drops below the minimum then they must pay a service charge.

TYPES OF CHECKING ACCOUNTS

COST-PER-CHECK ACCOUNTS are considered thrift accounts or minimum use accounts. The per-check fee may range from $.20 to $.25 per check/transaction. Generally one has to agree to maintain a minimum balance plus pay a fee for each check that is written or transaction made.

SAVINGS ACCOUNTS

Intended to store money you are saving for later

Can earn interest on the money in your account; making money just by having money! Interest – the amount charged, or earned,

typically expressed as a percentage, depending on the borrowing and lending of money

Example: You EARN interest on savings, You are CHARGED interest on loans

WHAT IF I DON’T HAVE A BANK ACCOUNT?

That’s ok! Bank accounts are simple to open…

But first, do some research!

LOOK FOR

Name of bank Branch information

Nearest your home Nearest your work Number of branches Number of ATMs Bank hours

LOOK FOR

Types of accounts Fees

Minimum daily balance required?Average daily balance required?Monthly maintenance charge

InterestEarned on accountHow calculated

LOOK FOR Charges

Withdrawals atTeller WindowBank owned ATMRegional network ATMNational network ATM

Special servicesFund transfer by phonePre-authorized bill payment by phone or computer

Signature guarantee

OPENING A BANK ACCOUNT (<WATCH ME)

After you have done your research… Select the right institution for you! Although can begin the process online, when

starting an account, especially for the first time, it’s best to go into your bank!

Things you need: Proof of age, must be 18, or have joint account

with parent Proof of address Proof of identification, social security number

and picture ID MONEY $$$

THEN WHAT?

Discuss with the teller your account options

ASK QUESTIONS – this stuff is serious! Sign papers, become official! Order checks, debit cards Select a PIN Make deposits! BE RESPONSIBLE – keep cards and

information safe, track spending

IMPORTANT TERMS Teller – employee of the bank who

deals with most customers Deposit – a sum of money placed or

kept in a bank accountEX: when I am paid, I DEPOSIT my

paycheck into my account Withdrawal – to take, or remove, money

from your bank accountEX: When I am going to a basketball game

and need cash for my ticket, I WITHDRAW money from my account

IMPORTANT TERMS

Debit card – electronic card which allows you to access the money in your checking account, operates like a check, or cash in plastic form

Credit card – electronic card, looks much like debit card, but uses money you borrow from the bank which you must repay

PIN – Personal Identification Number, unique to each person, used for making deposits and withdrawals with debit card, typically 4 digits

HOW TO USE MY BANK ACCOUNT

Can make deposits and withdrawals at the bank with a teller

Can utilize an ATM If you have a check, make sure to endorse, or

sign the back! Some companies/organizations use Direct

Deposit Your pay check is linked to your bank account

and the money goes straight there, you do not receive an actual check to deposit

Need to know your PIN to utilize your debit card and checking account!

DEBIT CARDS

What is a debit card?

DEBIT CARDS

Debit cards are also known as check cards. Debit cards look like credit cards or ATM

cards, but operate like cash or a personal check.

DEBIT CARDS

Debit cards are accepted at many locations, including grocery stores, retail stores, gasoline stations, and restaurants. You can use your card anywhere merchants display your card's brand name or logo. They offer an alternative to carrying a checkbook or cash

USE YOUR DEBIT CARD FOR:

Shopping ATM transactions Getting cash Immediate banking

DIFFERENCE?

What’s the difference between a debit card an a credit card?

It's the difference between "debit" and "credit." Debit means "subtract." When you use a debit card, you are subtracting your money from your own bank account. Debit cards allow you to spend only what is in your bank account. It is a quick transaction between the merchant and your personal bank account.

CREDIT CARDS

Credit is money made available to you by a bank or other financial institution, like a loan. You may use the credit with the understanding that you will repay the amount, plus interest if you do not pay in full each month. You will receive a monthly statement detailing your charges and payment requirements.

WHAT YOU SHOULD KNOW

Using a debit card instead of writing checks saves you from showing identification or giving out personal information at the time of the transaction.

Using a debit card frees you from carrying cash or a checkbook.

Debit cards may be more readily accepted by merchants than checks, especially in other states or countries wherever your card brand is accepted.

The debit card is a quick, "pay now" product, giving you no grace period.

Returning goods or canceling services purchased with a debit card is treated as if the purchase were made with cash or a check.

CONVENIENCE

Use the card for purchases anywhere that accepts Visa

Use the card for cash at ATM machines Have access to your funds 24 hours a day Avoid check-cashing hassles

SAFETY

Avoid carrying large amounts of cash Prevent the risk of a paper check being lost

or stolen in the mail

INFORMATION

Keep track of your purchases by phone or internet

Check your available balance by phone, ATM or Internet

TIPS TO USING A DEBIT CARD If your card is lost or stolen or you suspect

your card is being fraudulently used, report it immediately to your financial institution.

Hold on to your receipts from your debit card transactions. A thief may get your name and debit card number from a receipt and order goods by mail or over the telephone. Your card does not have to be missing in order for it to be misused.

If you have a PIN number, memorize it. Do not keep your PIN number with your card. Also, don't choose a PIN number that a smart thief could figure out, such as your phone number or birthday.

MORE TIPS

Never give your PIN number to anyone. Keep your PIN private.

Always know how much money you have available in your account. Don't forget that your debit card may allow you to access money that you have set aside to cover a check which has not cleared your bank yet.

Keep your receipts in one place -- for easy retrieval and better oversight of your bank account

WHAT ABOUT CHECKS?

YES they are still important! Why do we need to know how to write a

check?

HOW TO WRITE A CHECK

1. Use blue or black pen always2. Write today’s date3. Pay to the order…(name of person, company you are paying)4. Amount of check in numerical numbers5. Amount of dollars in written words6. Amount of cents in fraction7. Draw a line8. Memo / for …what is the check for? Or the purpose of the check9. Sign!

SAMPLE: EACH NUMBER IN RED ALIGNS WITH NUMBER FROM LIST YOU WROTE DOWN

Let’s Practice!