Banking Basics O You can take charge of your financial future!

Banking Basics

O You can take charge of your financial future!

O Why keep your money in a bank?O Safety

O Select an FDIC-insured financial institutionO Calculate your insurance coverage with the Electronic

Deposit Insurance Estimator (EDIE): www.myfdicinsurance.gov

O ConvenienceO CostO SecurityO Financial future

Reasons to Keep Money in a Bank

Insured Financial Institutions

O Banks and Thrifts:O Are subject to federal and state lawsO Make loans, pay checks, accept deposits, and

provide other financial services

O Credit Unions:O In addition to the above:

OAre non-profit financial institutionsORequire a membership to open an account

Bank vs. Check-Cashing Services

Check-Cashing Services

Check-cashing fees:4 x $5 = $20 a month

$20 x 12 = $240 a year

Money order fees:5 x $1 = $5 a month$5 x 12 = $60 a year

Total: $300

Bank

Monthly fee:$5 a month

$5 x 12 = $60

Box of checks: $12

Total: $72

Savings: $228

Additional Benefits of a Bank

O Internet banking access 24 hours, 7 days a week

O Good credentials for loan applications with responsible use

O No worries about cash being lost or stolen

Open & Maintain a Bank Account

1. Open the account 2. Make deposits and withdrawals3. Record interest and fees4. Keep track of your balance

Open a Bank Account

O Complete account verification process

O Photo Identification

O Your Social Security Number or Individual Taxpayer Identification Number

O Ask about “second chance” checking programs if you are unable to open an account

Types of Deposit Accounts

O Examples include: O Checking account–to pay bills and buy goods O Savings account–to save money and earn interest

O You may have transaction and monthly fees.

O The bank will send you periodic statements.

Deposit

O Deposit: money you add to your accountO Deposit slip: tells the bank how much money you

are adding to your account

Note: You may not have immediate use of deposited funds until the bank ensures there are funds at the originating bank.

Balance

O The amount of money you have in your bank account

What is your balance?

Description +/- Balance

Opening Balance

+$100 $100

Withdrawal

O Taking money out of your account using checks, withdrawal slip, or ATM

Always know how much is in your account!

Description +/- Balance

Opening Balance

+$100 $100

Withdrawal -$20 $80

Fees

O Examples include:O Monthly maintenance feesO Penalty feesO Overdraft fees

O What is an overdraft?O When you do not have enough money in your

account to cover a transaction and you have pre-authorized the financial institution to pay it anyway

O Overdraft Protection offered at your financial institutionO Can save you money on returned item and merchant

fees should you make an honest mistake in your checkbook or have an unexpected emergency

Basics of Overdraft

Basics of Overdraft

O FeesO Per item AND per day at some financial

institutions when your account is overdrawnO Usually does not cost you unless you use it

O Ways to avoid overdraft feesO Always familiarize yourself with the financial

institution’s ODP program before requesting ODP

O Keep track of your account balance and only use funds available

O If you need to use your ODP for an emergency, do one cash withdrawal and pay for items with cash. This will help you avoid a fee for each item you pay.

Balance After Fees Charged

Description +/- Balance

Opening Balance

+$100 $100

Withdrawal -$20 $80

Fees -$4 $76

Interest

O A percentage of your balance that the bank pays you for keeping your money at that bank

Description +/- Balance

Opening Balance +$100 $100

Withdrawal -$20 $80

Fees -$4 $76

Interest +$1 $77

Non-Deposit Accounts

O Includes stocks, bonds, and mutual funds

O Not FDIC-insured; therefore, you may risk losing your investment.

O Speak with a Certified Financial Planner to help you decide how to invest your money.

Filling Out A Deposit SlipAccount Number

Name, Date, and Signature for cash received

Deposit Amounts

Print Name

Filling Out A Withdrawal Slip

Account Number

SSN, Name, and Signature

Date

Amount of Withdrawal

Writing A Check

Account Number

Fraction Code Routing Number

Drawee Bank

Maker Information

Routing Number

Check Numbers Must Match

Check Numbers Must Match

Signature

Micro Printing

Balancing Your Check Book

Checking Account Statement

1. Bank Name: The name of your institution and its location.

2. Personal Information: Your name and address.

3. Account Information: The type of account and the account number.

4. Statement Period: The dates that the statement covers.

5. Activity Summary: An overview of your credits and debits as well as the balance remaining at the end of the period.

6. Transaction Summary: A detailed listing of your credits and debits. Note that the dates for the checks you have written are those on which the bank processed them, not when you wrote them.

Reconciling our Account

O Balancing: Keeping you checkbook register up to date and maintaining totals.

O Reconciling: Finding and correcting any differences between the statement balance and your check register balance.

Thank You for Banking with FSNB