PERSONAL FINANCE PERSONAL BANKING BY MR. BROWN

TOPICS Bank Accounts Check Writing ACH Transfers vs. Wire Transfers Bank Fees FDIC Debit Cards vs. Credit Cards

BANK ACCOUNTS Basic Checking Account: Usually no fees, minimal perks (no interest earned), designed for numerous transactions a month Savings Account: Earn interest, designed for very few transactions a month CD (Certificate of Deposit): similar to a savings account but you can’t withdraw the money until the term ends, earns higher interest than a Savings Account IRA (Individual Retirement Account): An investment account with tax perks, will be penalized for pre-retirement withdrawals. Brokerage Account: An investment account without tax perks, no penalties for withdrawing funds.

CHECK WRITING What is a check? How do you write a valid check? Routing Number & Account Number Direct Deposit

CHECK WRITING PRACTICE Write one Check to Mr. Brown for $1, Write one Check to a classmate for $ Write one Check to a different classmate for $245.69

ACH & WIRES ACH (Automated Clearing House): electronic transfer of funds (non-cleared), only domestic and in USD Wires (Domestic): electronic transfer of funds (cleared), frequently have a fee (approx. $25) Wires (International): electronic transfer of funds (cleared), frequently have a fee and an exchange rate if changing currency

BANK FEES Overdraft fees Maintenance fees Transfer fees

FDIC Federal Depository Insurance Corporation (FDIC): up to $250,000

DEBIT VS CREDIT Debit cards: act as an electronic check that is immediately cashed, tied to a checking account Credit cards: act as a small loan, the credit company pays for the transaction. The consumer pays the debt back with interest to the credit card company.