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8/3/2019 2011 Banking Basic Class En
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a
a
BankingBASICS
Welcome to
Money WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
YOU can bank on it
2011
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Mo ney WI$E Banking Basics
Mo ney WI$E
A jo int financial educati o n pr o ject o f Co nsumer Acti o n and Capital One
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Wh at w ill th e Banking Basicstraining teac h us?
We want yo u to h ave a th o r o ug hunderstanding o f pers o nal b anking services and h o w th ey can b enefit yo u.
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Yo u w ill learn a b o ut:
Banks and credit uni o nsHo w to select a financial instituti o n
Ho w to o pen an acc o unt
Ho w to keep acc o unt c o sts d o wn
Ho w to get m o re interest o n yo ur savings
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P articipants f o lders c o ntain:
Yo u Can Bank On It (b r o ch ure)Ch eck Writing (class activity)
Sample Ch exSystems Rep o rt
Sample Acc o unt Applicati o nCh oo sing a Bank o r Credit Uni o n (take-h o me wo rks h eet)
Evaluati o n o f th e Mo ney WI$E Banking Basics Seminar
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Ch ecking and savings acc o unts
Wh at are s o me o f th e advantages to h aving a ch ecking and savings acc o unt?
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Advantages o f c h ecking and savings acc o unts include:
Yo ur m o ney is safeEac h acc o unt is insuredCh ecking acc o unt rec o rds pr o vide pr oo f th at yo u paid b ills and h elp yo u keep track o f spendingMo ney in a savings acc o unt earns interest to h elp it gr o wLess expensive th an ch eck-cas h ing st o res and m o ney o rders
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Banks and credit uni o ns
Wh at is th e difference b et ween a b ank and a credit uni o n?
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Banks
Banks are financial instituti o ns th at take dep o sits, engage in lending and o perate f o r a pr o fit
Banks o ffer ch ecking and savings acc o unts to th e general pu b lic
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Credit uni o ns
Credit uni o ns are financial c oo peratives th at are o wned b y and serve individuals w ith a c o mm o n affiliati o n
f o r example, a w o rkplace, ch urc h , empl o yees uni o n, neig hb o r h oo d, etc.
Credit uni o ns o ffer ch ecking and savings
acc o unts to mem b ers
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Acc o unt verificati o n services
Ho w d o b anks and credit uni o ns learn h o w yo u h ave h andled yo ur acc o unts in th e past?
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Ch exSystems...
Is th e ma jo r nati o nal acc o unt verificati o n c o mpany
Wh en yo u apply f o r a ne w ch ecking
acco
unt, b anks and credit unio
ns searc h f o r yo ur name in th e Ch exSystems data b ase
If yo u ever ab and o ned an acc o unt, leaving a negative b alance, yo u are pr o b ab ly listed in th is data b ase
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Ch exSystems rec o rds
Rep o rts ab o ut o verdrafts o r cl o sed acc o unts remain in yo ur file f o r five years
You can get a free c
opy
of y
our rep
ort b y c o ntacting Ch exSystems at
www .c o nsumerde b it.c o m
Yo u h ave th e rig h t to dispute inaccurate inf o rmati o n in yo ur acc o unt verificati o n rep o rt
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Yo ur rig h tsYo
u can get a free co
py o
f yo
ur Ch exSystems rep o rt if:yo u h ave b een denied an acc o unt in th e past 60 days b ecause o f inf o rmati o n listed in Ch exSystemsyo ur ch ecks were st o len and used b y an imp o st o r o r yo u are th e victim o f
any b anking o
r acco
unt fraudG et a c o py anytime f o r ab o ut $10
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D o n t get disc o uraged
If yo u try to o pen a ne w ch ecking acc o unt and are turned d o wn b y a b ank o r credit uni o n b ecause o f
yo ur past acc o unt h ist o ry, d o n t give up
D ifferent b anks and credit uni o ns h ave different requirements, s o s h o p ar o und
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Ch exSystems sample rep o rt
Let s revie w th e categ o ries o f th e Ch exSystems sample rep o rt:
Rep o rted inf o rmati o nD rivers license validati o nD rivers license verificati o nCo nsumer-initiated inquiriesCust o mer-initiated inquiries
Retail inf o rmati o nCh eck printing o rder h ist o ry
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Ch ecking acc o unts
Wh at kinds o f th ings can yo u d o w itha ch ecking acc o unt?
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Ch ecking acc o unts
Ch ecking acc o unts all o w yo u to :P ay b ills w ith ch ecks/ o nline b ill payG et cas h , transfer m o ney and make purc h ases using yo ur de b it card
Access yo ur ch ecking acc o unt:At an ATM o r b ank b ranc hOn yo ur c o mputer (o nline b anking)By p h o ne o r using a data-ready m o b ile device (m o b ile b anking)
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Banking/c h ecking o nline
Als o kn o wn as Internet b ankingVia a secure web site o perated b y yo ur financial instituti o n (o r via an app )P
ay b ills, vie w transactio
ns, transfer funds b et ween acc o unts
Benefits: c o nvenient, lo w o r n o acct fees, quick access to inf o , savings o n p o stage
and ch ecks But, may still need to visit th e ATM
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Safe Internet b anking
M ake sure th e instituti o n is legitimate
Create a str o ng pass w o rd
Keep yo ur ID and pass w o rd privateD o n t fall f o r p h is h ing scams
Be careful wh en using pu b lic w ireless net w o rks (Wi-Fi) o r s h ared c o mputers
Mo nit o r acc o unt activity regularly
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Keeping ch ecking acc o unt fees in ch eck
Sh o p ar o und f o r free o r lo w -c o st ch ecking acc o unts
e-Acc o untsElectr o nic transfer acc o unts (ETAs)Basic (Lifeline) acc o unts
Lo w -c o st acc o unts f o r seni o rs o r students
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D eb it cards
Yo u can use yo ur de b it card in th ese ways:
Enter yo ur pers o nal identificati o n num b er (P IN) at an ATM o r at a retailer s p o int- o f-sale (P OS) terminalSign a receiptSw ipe w ith o ut a signature o r P IN o n purc h ases under $25 at s o me st o res
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D eb it cards
If yo ur de b it card is lo st o r st o len:Alert yo ur b ank o r credit uni o n as
soo
n as po
ssi b le. Th e lo
nger yo
u wait, th e m o re mo ney yo u mig h t b e resp o nsi b le f o r if an unaut h o rized pers o n uses yo ur card to b uy th ings.
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Ch eck w riting activity
In th is activity yo u w ill practice w riting a ch eck and entering it int o a sample ch ecking acc o unt register.
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Ch eck w riting
Wh y is it imp o rtant to enter yo ur ch ecks and de b it transacti o ns in yo ur acc o unt register?
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Keep a rec o rd o f yo ur transacti o ns:
S o th at yo u d o n t f o rget ch ecks, cas hw ith dra wals, and purc h ases w ith yo ur de b it card
If yo u f o rget to rec o rd a transacti o n, it c o uld o verdra w yo ur acc o unt. Th is c o uld lead to a fee f o r n o n-sufficient funds (b o unced ch eck) b eing ch arged to yo ur acc o unt.
S o th at yo u kn o w h o w muc h m o ney yo u h ave in yo ur acc o untS o th at yo u can track yo ur spending and stick to a b udget
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Savings acc o unts
Ho
w is a savings acco
unt different fr o m a ch ecking acc o unt?
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Wh at is interest?
Interest is th e c o st o f b o rr o w ing m o ney Wh en a b ank/credit uni o n gives yo u a lo an, yo u pay interest to th em Wh en yo u keep yo ur savings in a b ank/credit uni o n, th ey pay interest to yo u
AP R , o r annual percentage rate, is th e
annual am o unt o f interest, expressed as a percentage o f th e am o unt lo aned o r b o rr o wed
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Types o f interest
Th ere are tw o types o f interest:Simple interest means th at yo u o nly earn interest o n yo ur initial dep o sit
Co mp o und interest all o ws yo u to earn interest n o t o nly o n yo ur initial dep o sit, b ut als o o n th e interest yo u
earn as yo u g o al o ng
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Interest
Simple interest$100 o n dep o sit f o r 10 years at a 1% AP Rwo uld earn $10 in interest
Co mp o und interestTh e same dep o sit, c o mp o unded m o nt h ly, wo uld earn $10 .51 (51 m o re b ecause o f c o mp o unding)
Co mp o unding earns m o re, especially if yo u save regularly
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In th e sec o nd h alf o f Banking Basics, w e ll discuss:
Ho w to earn m o re interestSafe dep o sit b o xesCh oo sing and o pening an acc o untM anaging yo ur ch ecking acc o unt Ho w to res o lve any issues w ith yo ur acc o unt
See yo u th en!
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Certificates o f dep o sit (CD s)
Wh at is a certificate o
f depo
sit?
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Certificates o f dep o sit (CD s)
A certificate o f dep o sit, o r CD , is a kind o f savings acc o unt in wh ich yo u leave yo ur m o ney o n dep o sit f o r a set peri o d o f time in o rder to earn interest
Th e lo nger th e term o f yo ur CD , th e h igh er yo ur interest rate w ill b e
If yo u w ith dra w yo ur m o ney b ef o re th e term ends, yo u w ill lo se interest and mig h t h ave to pay a penalty
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Safe dep o sit b o xes
Wh at is a safe dep o sit b o x?
Wh at are so
me th ings th at yo
u mig h t keep in a safe dep o sit b o x?
Money WI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
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Wh at to keep in a safe dep o sit b o x
Co pies o f insurance p o liciesBirt h , marriage and deat h certificatesMo rtgages, leases and o th er imp o rtant c o ntracts
St o ck and b o nd certificates and certificates o f dep o sit (CD s)
Valua b le jewelry
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Safe dep o sit b o xes
Wh at s h o uld yo u not keep in a safe
dep o sit b o x?
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Safe dep o sit b o xes
Th e o riginals o f yo ur w ill and life insurance p o licies s h o uld n o t b e kept in a safe dep o sit b o x
Th e b o x mig h t b e sealed at th e time o f yo ur deat h and yo ur surviv o rs w o uld need a c o urt s permissi o n to o pen it
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Opening an acc o unt
Questi o ns to ask:Wh at is th e minimum to o pen an acc o unt?
Wh at is th e interest rate o
n th e acc o unt?Is th ere a m o nt h ly fee?Is th ere any way to av o id m o nt h ly fees?- (m o re questi o ns o n next slide)
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Mo re questi o ns to ask wh en o pening an acc o unt
Is th ere a maximum num b er o f ch ecks I can w rite eac h m o nt h ?Is th ere a fee f o r using yo ur ATM s?Wh at h appens if my b alance falls b el o w th e minimum requirement?
TIP : Use th e Mo ney WI$E w o rks h eet in yo ur f o lders as a guide wh en yo u apply f o r an acc o unt
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Opening an acc o unt
Wh at s h o uld yo u b ring w ith yo u wh en
yo u are o pening a ne w acc o unt?
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Identificati o n
Wh en yo u g o to a financial instituti o n to o pen a ne w acc o unt, b ring:
P h o to identificati o n, suc h as a driver s license, state ID card o r passp o rt
P r oo f o f yo ur address, suc h as a utility b ill o r lease
Yo ur S o cial Security num b er f o r tax purp o ses
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Activity
Sample savings acc o unt applicati o n
Th is is a sample applicati o n f o r an
interest- b earing acco
unt at Mo
ney WI$E Bank
Lets walk th r o ug h th e activity to get h er
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Savings acc o unt applicati o n
Ow ners h ipW-9 certificati o n
Opti o nal services
ATM cards
Linking acc o unts
ATM fees
Sign and date yo ur applicati o n
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Keeping yo ur acc o unt straig h t
Once yo
u h ave an acco
unt, w rite do
wn and deduct in yo ur ch eck register:Every ch eck yo u w riteEvery de b it card transacti o n yo u make (including cas h b ack at st o res)ATM cas h w ith dra walsAny b ank fees yo u payAny o nline transacti o nsAny aut o matic payments/deducti o nsAll dep o sits and credits
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Acc o unt c o sts
Ho w can yo u save m o ney o n
acc o unt c o sts?
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Ideas to keep acc o unt c o sts d o wn
Co mb ine ch ecking and saving b alances to av o id m o nt h ly fees
Save o n ATM fees b y using yo ur o wn b ank s mac h ines
If yo u can t av o id an ATM fee, take o ut larger sums less frequently
Use direct dep o sit f o r yo ur payc h eck o r g o vernment b enefits ch eck
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Ideas to keep acc o unt c o sts d o wn
Ask yo ur lo cal b ank o r credit uni o n ab o ut acc o unts w ith free ch ecks
Order fr o m a reputa b le mail- o rder c o mpany
Ch eck w ith th e Better Business Bureau b ef o re b uying ch ecks fr o m a c o mpany yo u are n o t familiar w ith
Write d o wn all transacti o ns and rec o ncile yo ur acc o unt s o yo u d o n t o verdra w yo ur acc o unt and incur o verdraft fees
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Standard o verdraft pr o tecti o nYo
ur o
verdraft transactio
n is co
vered if yo
u pay a fee
Th ere is a separate fee f o r eac h o verdraft transacti o n
Yo u must give yo ur permissi o n (o pt in) to all o w o verdrafts o n de b it card and ATM transacti o ns
If yo u d o n t o pt in, yo u can t b e ch arged b ut yo ur o verdraft de b it transacti o ns w ill b e declined
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Overdraft pr o tecti o n plans
An o pti o nal b ank service called o verdraft pr o tecti o n waives o verdraft fees
It can wo rk w ith a lo an o r line o f credit o r w ith yo ur savings acc o unt
Fo r th e line o f credit, yo u must h ave a g oo d credit h ist o ryYo u w ill b e ch arged a small transacti o n fee wh en yo u o verdra w yo ur acc o untYo u ll pay interest o n funds fr o m th e credit line wh en yo u use th em
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Res o lving pr o b lems
M istakes h appen!
Bring issues o r err o rs o n yo ur acc o unt o r acc o unt statements to th e attenti o n o f yo ur b ank o r credit uni o nD o n t delay waiting too lo ng c o uld make a situati o n w o rse
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S o lving an acc o unt pr o b lemCo ntact th e financial instituti o n as s oo n as yo u canWrite d o wn th e date o f all calls and th e names o f th e pe o ple wh o h elp yo u res o lve th e issueSend a summary letter (b y registered mail, receipt requested, o r b y email) to esta b lis h a paper trail o n yo ur pr o b lem (and keep c o pies o f email)O ffer a s o luti o n and a date b y wh ic h yo u h o pe to res o lve th e issue
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Escalating yo ur issue
G ive yo ur b ank o r credit uni o n time to s o lve o r rep o rt b ack to yo u o n yo ur pr o b lem
If yo u are n o t ab le to res o lve yo ur issue w ithyo ur b ank o r credit uni o n after a reas o na b le time, yo u can c o ntact th e instituti o n s regulat o r
Call th e FD IC at 877 -275 -334 2 to find th e
name and c o ntact inf o f o r yo ur instituti o n s regulat o r
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No w yo u can grade us
P lease fill o ut th e evaluati o n f o rm and h and it to th e trainer b ef o re yo u leave
Th e inf o rmati o n h elps us pr o vide yo u w ith b etter pr o grams
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Co ngratulati o ns
By attending th e Mo ney WI$E Banking Basics training, yo uve
emp o wered yo urself to make g oo d decisi o ns ab o ut yo ur acc o unt needs.
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Money WI$E
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