1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Balancing your Checkbook

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Monthly Statement Lists each monetary transaction and the current account balance for a specified time period Includes: –Dates –Identification for each transaction (number or type, date, amount) –Transaction amounts for withdrawals and/or deposits –Interest earned (if applicable) –Fees or charges (if applicable)

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Reconciling a Checking Account Reconcile –Balance the checkbook register each month to the balance shown on the statement Knowing the correct balance can help to avoid bouncing checks

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Steps for Reconciling Make sure every transaction matches the check register Place a check next to each transaction that has cleared –Do this for both withdrawals and deposits Identify any outstanding transactions in the check register

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Steps for Reconciling continued Start with checking account balance on the statement Add any outstanding deposits Subtract any outstanding withdrawals Compare this result with the current balance in the check register –They should be the same

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Check 21 Check 21- Law created to transfers checks electronically This eliminates most or all of the time between writing the check to when the money is withdrawn from the account Checks can be processed as quickly as a debit card

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Electronic Banking Take Charge of Your Finances

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Electronic Banking Electronic Funds Transfer (EFT) is the electronic movement of money E-banking allows a person to make withdrawals, deposits, and bill payments by one of the following methods: –Phone –Computer –Automated teller machine (ATM) –Point of sale terminal (POS)

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Electronic Banking Benefits of e-banking include: –24 hour access –Fast transactions –Paperless transactions –Convenience –Worldwide access

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Debit Cards plastic cards that are electronically connected to a card holder’s bank/CU accounts. –Money is automatically withdrawn from the designated account when a purchase is made.

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Personal Identification Numbers Debit cards require the use of PIN (PIN) is a number that is entered in at an (ATM) or Point of Sale Terminal (POS) This confirms that the individual is authorized to access that particular account.

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Consumer Liability According to the Federal Trade Commission, a consumer is held liable for any unauthorized charges under the following conditions: –notice is given within two business days: The consumer is held responsible for no more then $50. –notified within the first 60 days: The consumer is held liable for no more then $500. –If the institution is notified after the first 60 days: The consumer is held liable for the amount of the unauthorized transfers.

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Debit Card Downfalls Does not build credit history Always have money source available Must keep accurate records Car rentals- no insurance coverage through debit –Must buy extra insurance coverage –Some companies will not rent car with debit Courtesy overdraft protection –Debit cards can be used when there is not enough money in the account – results in a non- sufficient fund fee

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Overdraft protection 1.Overdraft protection- mini loans made by banks to cover negative balance charges –incredibly expensive Most purchases that force overdraft loans are for small purchases, The median overdraft loan is $ The average fee is more than double that amount. can be as high as 20,000% profit for bank

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Ways to cover overdraft Possible cost for each overdraft** –Good account management- $0 –Link to savings account- $5 –Link to line of credit- $15 annual fee + 12% APR –Courtesy overdraft protection- $20 to $30 per transaction

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Risks of Debit Cards Theft can wipe out Checking account Gas stations routinely block a card in advance for the estimated cost of purchase. ($50.00-$100.00) –May take 1-2 days to unblock your money –Risk of overdraft fees or declined purchases

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona How can you lower the risk of using a Debit card? Never use on the internet or over the phone –Defective goods hard to return They already have your money Never let card leave your sight –Paying at a restaurant –Could copy info Protect PIN # –Memorize –Cover key pad

1.7.2.G1 © Family Economics & Financial Education – Revised February 2008 – Financial Institutions Unit – Electronic Banking Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Automated Teller Machines (ATM) Transactions allowed may include: –Deposits –Cash withdrawals –Transfers between accounts –Account balance information