Introduction to Glow Online Sessions And The Benefits of Banks: Opening and Managing Savings and Checking Accounts Glow Foundation 2010 Glow Online Curriculum Session I

Page 2 What We Will Cover in this Session  Information about Glow Foundation  Benefits of Banking  Savings Accounts (Opening an Account, Interest, Tips)  Checking Accounts (Parts of a Check, Filling out a Check and Deposit Slip)  Using a Debit / ATM Card  Tracking Your Spending  Protect Yourself from Fraud!

Page 3 What is Glow Foundation? Glow Foundation is a non-profit organization that helps high potential, college ready students overcome financial barriers to attend and graduate from college F inancial Education College Planning Support / Mentoring “Unmet Need” Scholarships We provide students with:

Page 4 How Can I Benefit from Participating? Glow’s Goal is to Help You Understand How to FULLY FUND Your College Education. By Participating in Online Program, You’ll Have a Stronger Understanding of:  Banking Services and Money Management Tools  Interest, Credit, and Credit Cards  The FAFSA and Financial Aid Process  How to Evaluate Loan Options  How to Analyze and Compare Financial Aid Award Letters  Budgeting

Page 5 What Are the Benefits of a Bank? THINK IT OVER: 1.Why would someone decide to open a bank account? 2.What are some benefits of a bank?

Page 6 Benefits of a Bank DID YOU COME UP WITH SOME OF THESE? 1.Safety (of cash from theft, fire, etc.) 2.Convenience 3.Saves Money (avoids check cashing fees) 4.Security (FDIC insured) 5.Advice of Banking Professionals

Page 7 Savings Account Basics What is a Savings Account?

Page 8 Savings Account Basics Regular SavingsMoney MarketCertificate of Deposit (CDs)  Minimum Balance  Usually a minimum balance of at least $1000  Deposit a certain amount of money – requires a minimum amount  Low Interest rates - variable  Usually pays more interest than regular savings (variable)  Higher interest rate than a regular savings account (usually fixed)  Limited number of withdrawals – sometimes charged a fee  Usually can make limited amount of withdrawals with checks - convenient  No withdrawals - will be penalized if you withdraw money before specified date  Readily accessible  No minimum length of time to have money deposited  Requires money to be deposited for a certain amount of time  Insured  Not always insured  Insured

Page 9 Savings Account Basics What should you consider before opening up a savings account? How Frequently Interest is Compounded Minimum Balance Service Fees Convenience Interest Rate

Page 10 Savings Account Basics What is Compound Interest? Also do a web search for definitions! QuarterAmount in Account InterestTotal amount 1$ %($1000*.0125) = $ %( *.0125) = %( *.0125) = %( *.0125) =

Page 11 Saving Account Basics Compare the Results: Shoebox Saver (No Account) Super Saver (Savings Account) Year 1$1825$1871 ($46 more!) Year 5$9125$10,366 (+$1,241) Year 10$18,250$23,677 (+$5,427) Year 30$54,750$127,077 (+$72,327) Each person saved $5 a day and the Super Saver earned 5% interest compounded daily.

Page 12 Savings Account Basics Some tips to SAVE MORE MONEY:  Ask yourself, “Do I NEED this?”  Pay YOURSELF first before you spend any money  If you get money as a gift or a bonus, save a portion of it  Save spare change and deposit it  Pay bills on time  Avoid check cashing stores  Take lunch with you instead of eating out  Carry small amounts of cash with you  Use direct deposit  Others?

Page 13 Checking Account Basics Checking Accounts:  Keep your money safe and accessible  Help control your spending  Don’t pay interest  May require you to keep a minimum balance or do direct deposit (to avoid fees)  Checks function like cash

Page 14 Checking Account Basics Check-Writing Tips:  Always write in blue or black ink  Write neatly  Save your receipts and record your spending in your register  Initial your (small) mistakes / VOID checks with large mistakes  Avoid writing “bad” checks - you will get fined and it’s against the law in some cases

Page 15 Checking Account Basics How to Endorse a Check: When depositing a check, you need to approve the transaction by endorsing the back of the check. Along with your signature, you’ll write “For Deposit only” along with your bank account

Page 16 ATM / Debit Cards What’s the difference between an ATM and debit card?

Page 17 ATM / Debit Cards ATM Cards are used to:  Deposit, withdraw, or transfer money Debit cards can do this in addition to:  Purchasing items  Online banking – pay your bills, check account balances

Page 18 ATM / Debit Cards What information is on your ATM / debit card?

Page 19 ATM / Debit Cards ATM / Debit Card Tips:  You may be charged a fee if you use an ATM that is operated by another bank  Know your balance available  Be aware of what you’re buying - it’s easier to spend more with plastic!  Be careful with your Personal Identification Number (PIN) – Never write it on your card  Avoid magnets – they can de-magnetize your card  Contact your bank if your card is lost or stolen!

Page 20 Tracking Your Spending Think about ways to track your spending and control the money you have.

Page 21 To Track Your Spending 1.Save your receipts 2.Record transactions 3.Avoid over-spending 4.Review statements 5.Compare with the bank

Page 22 Tracking Your Spending ►Overdraft Fees! Whenever you spend more money than you have in your account, banks will charge you a fee which ranges from $15-$35 per overdraft. It is better to balance your checkbook, purchase what you can afford and manage your money effectively. What happens when you write a check for more than you have in your checking account?

Page 23 Protect Yourself From Fraud Do some research: What are ways to ensure that you are keeping credit cards, checkbooks and financial data safe at home and online?

Page 24 Recap  Benefits of Banking  Savings Accounts (Opening an Account, Interest, Tips)  Checking Accounts  Using a Debit / ATM Card  Tracking Your Spending  Protect Yourself from Fraud!

Page 25 Homework: Save your receipts for one week and have them ready for you next online session

Page 26 Questions? Alana Okamoto