a a Banking BASICS Welcome to MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP YOU can bank on it © 2011

MoneyWI$E ‘Banking Basics’ MoneyWI$E A joint financial education project of Consumer Action and Capital One. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

What will the ‘Banking Basics’ training teach us? We want you to have a thorough understanding of personal banking services and how they can benefit you MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

You will learn about: Banks and credit unions. How to select a financial institution. How to open an account. How to keep costs down. How to get more interest on your savings. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Participants’ folders contain: You Can Bank On It (brochure) Check Writing (class activity) Sample ChexSystems Report Sample Account Application Choosing a Bank or Credit Union (take- home worksheet) Evaluation of the MoneyWI$E Banking Basics Seminar MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Checking and savings accounts What are some of the advantages to having a checking and savings account? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Advantages of checking and savings accounts include: Your money is safe Each account is 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 MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banks and credit unions What is the difference between a bank and a credit union? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banks 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 MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Credit unions Credit unions are financial cooperatives that are owned by and serve individuals with a common affiliation For example, a workplace, church, employees union, neighborhood, etc. Credit unions offer checking and savings accounts to members MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Account verification services How do banks and credit unions learn how you have handled your accounts in the past? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

ChexSystems... Is the major national ‘account verification’ company. When you apply for a new checking account, banks and credit unions search for your name in the ChexSystems database. If you ever abandoned an account, leaving a negative balance, you are probably listed in this database. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

ChexSystems records Reports about overdrafts or closed accounts remain in your file for five years You can get a free copy of your report by contacting ChexSystems at You have the right to dispute inaccurate information in your account verification report. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Your rights Also, you can get a free copy of your ChexSystems report if: You have been denied an account in the past 60 days because of information listed in ChexSystems Your checks were stolen and used by an impostor or you are the victim of any banking or account fraud MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Don’t get discouraged If you try to open a new checking account and are turned down by a bank or credit union because of your past account history, don’t give up Different banks and credit unions have different requirements, so shop around MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

ChexSystems sample report Let’s review the categories of the ChexSystems sample report: Reported information Drivers license validation Drivers license verification Consumer initiated inquiries Customer initiated inquiries Retail information Check printing order history MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Checking accounts What kinds of things can you do with a checking account? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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 Access your checking account At an ATM or bank branch On your computer (online banking) By phone or using a data-ready mobile device (mobile banking) MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banking/checking online Also known as Internet banking Via a secure website operated by your financial institution Pay bills, view transactions, transfer funds between accounts Benefits: convenient, low or no acct fees, quick access to info, savings on postage and checks But, may still need to visit the ATM MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Safe Internet banking Make sure the institution is legitimate Create a strong password Keep your ID and password private Don’t fall for phishing scams Be careful when using public wireless networks, Wi-Fi or shared computers Monitor account activity regularly MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Keeping checking account fees in check Shop around for free or low-cost checking accounts Electronic transfer accounts (ETAs) Basic (Lifeline) accounts Low cost accounts for seniors or students MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Debit cards You can use your debit card in these ways: Entering your personal identification number (PIN) at an ATM or at a retailer’s point-of-sale (POS) terminal Sign a receipt Swipe without a signature or PIN on purchases under $25 at some stores MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Debit cards If your debit card is lost or stolen: Alert your bank as soon as possible. The longer you wait, the more money you might be responsible for if an unauthorized person uses your card to buy things MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Check writing activity In this activity you will practice writing a check and entering it into a sample checking account register. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Check writing Why is it important to enter your checks and debit transactions in your account register? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Keep a record of your transactions: So that you don’t forget checks, cash withdrawals, and purchases with your debit card If you forget to record a transaction, it could overdraw your account. This could lead to a fee for “non sufficient funds” being charged to your account So that you know how much money you have in the bank So that you can track your spending and stick to a budget MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Savings accounts How is a savings account different from a checking account? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

What is interest? Interest is the cost of lending money. When a bank gives you a loan, you pay interest to them. When you keep your savings in a bank, they pay interest to you. APR, or annual percentage rate, is a full year’s interest MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Types of interest There are two types of interest: Simple interest means that you only earn interest on your initial deposit Compound interest allows you to earn interest not only on your initial deposit, but also on the interest you earn as you go along MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Interest Simple interest $100 on deposit for 10 years at a 1% APR would earn $110 in interest Compound interest The same deposit, compounded monthly, would earn $ (51¢ more because of compounding) Compounding earns more, especially if you save regularly MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Session One Wrap-up Next time we will discuss: ways to earn more interest safe deposit boxes what to consider when you are looking for a bank or credit union how to resolve any issues with your account See you then! MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banking Basics Session Two (2 hours) MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Banking Basics Session Two Today we’ll learn  How to earn more interest on your money  What to keep in a safe deposit box  Things to consider when you are looking for a bank or credit union  How to how to resolve any issues with your account MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Certificates of deposit (CDs) What is a certificate of deposit? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Certificates of deposit (CDs) A certificate of deposit, or CD, is a kind of savings account in which you leave your money on deposit for a set period of time in order to earn interest The longer the term of your CD, the higher your interest rate will be If you withdraw your money before the term ends, you will lose interest and might have to pay a penalty MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Safe deposit boxes What is a safe deposit box? What are some things that you might keep in a safe deposit box? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

What to keep in a safe deposit box Copies of insurance policies. Birth, marriage and death certificates. Mortgages, leases and other important contracts. Stock and bond certificates and certificates of deposit (CDs). Valuable jewelry. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Safe deposit boxes What should you not keep in a safe deposit box? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Safe deposit boxes The originals of your will and life insurance policies should not be kept in a safe deposit box The box might be sealed at the time of your death and your survivors will need a court’s permission to open it MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Opening an account Questions to ask: What is the minimum to open an account? What is the interest rate on the account? Is there a monthly fee? Is there any way to avoid monthly fees?  (more questions on next slide) MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

More questions to ask when opening an account Is there a maximum number of checks I can write each month? Is there a fee for using your ATMs? What happens if my balance falls below the minimum requirement? TIP: Use the MoneyWI$E worksheet in your folders as a guide when you apply for an account MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Opening an account What should you bring with you when you are opening a new account? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Identification When you go to a financial institution to open a new account, bring: Photo identification, such as a driver’s license, state ID card or passport Proof of your address, such as a utility bill or lease Your Social Security number for tax purposes MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Keeping your account straight Once you have an account, write down and deduct in your check register: Every check you write Every debit card transaction you make ATM cash withdrawals “Cash back” at stores Any bank fees you pay MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Account cost How can you save money on account costs? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Ideas to keep account costs down Combine checking and saving balances to avoid monthly fees Save on ATM fees by using your own bank’s machines If you can’t avoid an ATM fee, take out larger sums less frequently Write down all transactions and reconcile your account so you don’t overdraw your account and incur overdraft fees MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Ideas to keep account costs down Use direct deposit for your paycheck or government benefits check Ask your local bank or credit union about accounts with free checks Order from a reputable mail-order company  Check with the Better Business Bureau before buying checks from a company you are not familiar with MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Standard overdraft protection Your overdraft transaction is covered if you pay a fee There is a separate fee for each overdraft transaction You must give your permission (opt in) to allow overdrafts on debit card and ATM transactions If you don’t opt in, you can’t be charged but your overdraft debit transactions will be declined MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Overdraft protection plans An optional bank service called overdraft protection waives overdraft fees It can work with a loan or line of credit or with your savings account. For the line of credit, you must have a good credit history. You will be charged a small transaction fee when you overdraft You’ll pay interest on funds from the credit line when you use them MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Activity Sample savings account application This is a sample application for an interest-bearing account at MoneyWI$E Bank Lets walk through the activity together MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Savings account application Ownership W-9 Certification Optional Services ATM Cards Linking accounts ATM fees Sign and date your application MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Resolving problems Mistakes happen! Bring issues or errors on your account or account statements to the attention of your bank or credit union Don’t delay—waiting too long could make a situation worse MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Solving an account problem Contact the financial institution as soon as you can Write down the date of all calls and the names of the people who help you resolve the issue Send a summary letter (registered mail receipt requested) to establish a paper trail on your problem Offer a solution and a date by which you hope to resolve the issue MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Escalating your issue Give your bank or credit union time to solve or report back to you on your problem If you are not able to resolve your issue with your bank or credit union after a reasonable time, you can contact the institution’s regulator Call the FDIC at to find the name and contact info for your institution’s regulator MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Now you can grade us Please fill out the evaluation form and hand it to the trainer before you leave The information helps us provide you with better programs MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

Congratulations By attending the MoneyWI$E ‘Banking Basics’ training you’ve empowered yourself to make good decisions about your account needs MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP Visit money-wise.org for additional information and to access free financial education materials