Section 3: Banking Services Unit 3: Banking Personal Finance Section 3: Banking Services Essential Question: How will understanding the banking services offered by banks simplify my financial life?

3 Services We Will Discuss: Banking Services 3 Services We Will Discuss: Online Banking Keeping a Checking Account Smart Cards

Ways to use Electronic banking services Online ATM Phone/Mobile

Examples of Electronic Services - Online Automatic bill pay Online bill payment Check your account balances View recent transactions Transfer funds View images of checks View activity on loans Reconcile accounts Reorder checks Request stop payment Export account info into software package (Quicken) View statements Overdraft protection Overdraft= a check written for more than your account contains Set up Direct deposit = having your paycheck directly deposited into your checking account You will not receive a printed check; will receive a paycheck stub

Examples of Electronic Services - ATM Demand deposit An account that lets you withdraw portions of your deposited funds at any time ATM Cards – can only be used at ATM Debit Cards – can use at ATM, to buy products at stores, buy online, etc. Check Account Balances Transfer funds

Examples of Electronic Services – Phone/Mobile Check Account balances wherever you are View recent transactions Pay Bills Transfer funds View statements Deposit checks

Online Banking Online banking – also known as internet banking, allows consumers to complete transactions with wireless technology. Wireless technology includes: Personal Computers (PCs) Personal Digital Assistants (PDAs) Cellular phones

Online Banking… statistics for American adults 51% use online banking (that’s 61% of internet users) 32% use their cell phone for banking (that’s 35% of cell phone owners)

Online Banking Consumers can access account information and statements

Online Banking Consumers can transfer funds

Online Banking Consumers can manage bills and apply for credit

Online Banking Advantages Disadvantages Decreased cost of paper and postage Storing all statements online instead of keeping a paper copy Convenience Paying bills online Ability to access account anytime No waiting for a monthly statement Not as personal Not able to access without technology Decrease in safety features Increase in risk for fraud

Online Banking Online bill payment – allows consumers to send money from one account to a vendor Usually occurs automatically Consumers need to check with the vendors regarding their policy of when the payment will be processed How do I make sure it is safe online? HTTPS:// The Uniform Resource Locator (URL) ends in “s” which stands for secure A closed lock to the right of the URL or in the bottom right hand corner of the web browser to indicate a secure site

Let’s open a Checking Account!

Different Types of Checking Accounts Joint Accounts Opened by two or more people Special Accounts Offered for people who have a small activity in their accounts each month Standard Accounts/Share Accounts Set monthly service fee Typically waive fee if you maintain min. balance Shared Accounts are offered at Credit Unions Interest-Bearing Accounts Earn interest Must keep balance above minimum amount set by bank

$$$ Checking Account Initial deposit A signature authorization form You want to open a Checking Account….What do you need? A signature authorization form filled out and signed The bank can then compare your signature written on checks Initial deposit Have a minimum deposit amount ($50 or more) $$$

Writing a Check Your name and address Check # Amount of Check ($) Date Payee: Who you are writing the check to Amount of Check (in words) Your signature Memo (note why you wrote the check) Identification Numbers (bank routing #, account #, check #)

Three Different Types of Endorsements for the Back of Checks Blank Endorsement Restrictive Endorsement Special Endorsement More secure than blank endorsement Receiver writes “for deposit only” and account number above his/her signature Allows the check to only be deposited Receiver signs and writes “pay to the order of (fill in person’s name)” Allows the check to be transferred to a second party Receiver of the check signs his/her name Anyone can cash or deposit the check after has been signed

After You Have Written a Check When you write a check you may receive a Canceled Check Canceled Check = A check that bears the bank’s stamp, indicating that it has cleared

Checking Accounts Checkbook Register = a booklet used to record all account transactions Record every check you write Record every time you use your debit card Record any cash you put in your account or take out Record any service charges from your bank

Checking Accounts Want to put money in your account? You will need a Deposit Slip Contains the account holder’s account number and allows money (cash or check) to be deposited into the correct account Back of Deposit Slip Front of Deposit Slip

Fees that Banks May Charge ATM transactions ex: $2.50 per transaction if it is not your ATM Check cashing for non-bank customers Order new checks (printing checks) Overdraft Ex: $35.00 fee every time you go below $0.00 in your account Processing fee Bounced checks

Avoid the following when using your Checking Account Overdraft = a check written for more than your account contains What can you do to avoid overdraft fees? Overdraft Protection = will transfer money from one account (savings) to another account(checking) before it drops below zero. Floating Check = writing a check, knowing there are insufficient funds in your account You hope your deposit clears before the check is cashed by another Illegal!

Reconcile Your Accounts Reconciliation = matching your checkbook register with your bank statement Compare what you have been keeping track of with the statement provided by your bank Reasons why your accounts may be off: Did you write every transaction down? Has a check not cleared yet? Do you have any suspicious charges? vs.

What are Smart Cards? Called “electronic wallets”, look like ATM cards; however, they also include a microchip (embedded microprocessor). This minicomputer stores prepaid amounts for buying goods and services. A smart card can also store data about a person’s account balances, transaction records, insurance information, and medical history.

Additional Uses Identification Credit cards Security access cards Insurance cards