Unit 5 BANKING –Banking Basics

Do Now 1.What are some ways that people save money? 2. What does it mean when someone says, “a penny saved is a penny earned?”

Standard 5.1 Students will be able to compare and contrast the financial benefits of different products and services offered by a variety of financial institutions.

Lesson Goals I can discuss the differences between a Checking and Savings Account I can discuss the various ways to gain access to money (deposited in a Savings or Checking Account) I can discuss online banking and discuss how I can insure that my online banking is safe. I can perform an Internet search of 2 different banks to compare the costs of banking features.

Checking & Savings Accounts What are some of the advantages to having a checking and savings account?

Advantages of Checking & Savings Accounts Your money is safe. Each account is federally insured. Checking account records provide proof that you paid bills and help you keep track of spending. Money in a savings account earns interest to help it grow. Less expensive than check-cashing stores and money orders.

How is a Savings Account different from a Checking Account?

Difference between Saving & Checking Account Savings Accounts earns interest Interest is paid by a bank when you keep your money in a savings account. The Bank sends you monthly statements (or makes them available to you) to help you maintain financial records. Savings Deposits Savings Withdrawals Passbooks – Bring the book with you (primarily a thing of the past due to mobile deposits/online banking technology)

What kinds of things can you do with a Checking Account?

Checking Accounts Checking accounts allow you to: Pay bills with checks/online bill pay Get cash, transfer money and make purchases using your Debit Card.

Do Now: What is the difference between a Debit Card and a Credit Card?

Debit Cards You can use your debit card as follows: By entering a personal identification number (PIN) at an ATM (Automated Teller Machine) You can use that Debit Card at most retailers through a Point-of-Sale (POS) terminal. Wawa, Hollister, Target, Shoprite

Debit Cards You may be asked to sign a receipt because the card is often treated like a credit card (VISA logo)

What is the difference between a Bank and a Credit Union?

Banks offer checking and savings accounts to the general public. Banks are financial institutions that take deposits, engage in lending and operate for a profit. Banks offer checking and savings accounts to the general public.

Credit Unions Credit Unions are financial cooperatives that are owned by and serve individuals with common affiliation. For example, a workplace, church, employees union, etc. Credit Unions offer checking and savings accounts to members. Example, ABCO Federal Credit Union

How can you gain access to your money? Go to any branch of your bank At an ATM (Automated Teller Machine) On your computer (online banking) By phone or using a data-ready mobile device (mobile banking) This allows you to transfer funds (EFT-electronic funds transfer) or pay bills.

Online Banking - (Internet Banking) You use a secure website operated by your financial institution (or via an “app”) Pay bills, view transactions, transfer funds between accounts Benefits: Convenient, low or no account fees Quick access to information Savings on checks (buying checks) and postage (to mail bills)

Safe Online (Internet) Banking Make sure the institution is legitimate (do your homework and research) Create a strong password Keep your ID and Password private Do not fall for phishing (online scams) Be careful when using public wireless networks (Wi-Fi) or shared computers Monitor your account on a regular basis.

Keep Your Checking Account Fees “In Check”! Shop around for free or low-cost checking accounts Some banks offer: e-Accounts Student Accounts

Opening an Account Questions to ask: What is the minimum amount needed to open an account? Is there a monthly fee? Is there a way to avoid (or waive) the monthly fee?

Opening an Account Questions to ask: How many checks can I write a month? Do you have free online banking? Are there ATM fees? What happens if my balance falls below the minimum balance requirement?

What should you bring with you when you are opening a new account?

Required Documents: When you go to the financial institution or open account online you must provide: Photo identification, such as a driver’s license or passport Proof of your address, such as a utility bill or lease agreement (think of New Jersey’s Six Points System of ID to replace or get your Driver’s License)

Required Documents Continued: When you go to the financial institution or open account online you must provide: Your Social Security number for tax purposes

Shop around for your first Checking Account What bank is right for you? TD Student Checking Wells Fargo College Combo Chase College Checking KeyBank Key Student Checking Beneficial Bank Campus Checking Citibank Citibank Student Account

Do Now – Comparing Banks Handout Shop around for your first Checking Account Do Now – Comparing Banks Handout