1. BASIC BANKING

2. What is a Financial Institution?
An organization that provides services that everyone needs to manage money Banks, credit unions and thrifts are government regulated and FDIC insured Investment and Insurance companies offer financial services but are non-banking institutions Other non-banking institutions: check-cashing, pawnshops, financing companies

3. THE BANK
DISCUSSION
What is a bank?
Why do some people choose not to have a bank account?
What are the advantages of having a bank account?
What is the difference between a bank and a credit union?

4. SERVICES/PRODUCTS OFFERED BY BANKS
ATMs
Debit Cards

5. ADVANTAGES OF CHECKING ACCOUNTS
Your money is safe in a checking account. A checking account can help you improve your credit record. You can use a checking account to cash your paycheck and pay bills. You can cash checks at your bank or credit union for free. Carrying checks is safer than carrying cash or leaving your money at home. Your checkbook is a good record of your spending. A checking account may be cheaper than using a check cashing service. A checking account lets you get money from your account 24 hours a day because you can use an ATM.

6. Disadvantages of Checking Accounts
You have to balance your checkbook every month. Too many bounced checks can damage your credit record and you have to pay a fee if you bounce a check. You may have to pay a fee or keep a minimum balance. You may have to pay to have checks printed. You may be charged a fee for using an ATM.

7. A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
Banks and credit unions
What is the difference between a bank and a credit union?
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8. 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
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9. 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
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10. Selecting a Bank or Credit Union
Does the financial institution have branches or ATMs where you live or work? What hours are they open? Do they close before you get off work? Are they open on the weekend? Is the staff friendly and eager to help you open an account? Did they hand you papers and send you on your way, or did they take time to explain their services, products and fees? Did they try to convince you to get an account you did not want? If you speak a language other than English, did they still take the time to talk to you?

11. Tips for Finding the Right Account
Money needed to open an account
Minimum balance requirement
Monthly service charges
Fees for bouncing checks (overdraft charges)
Number of checks that you can write
Number of withdrawals that can be made.
Any holds on deposits

12. A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
Checking and savings accounts
What are some of the advantages to having a checking and savings account?
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13. 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
Less expensive than check-cashing stores and money orders
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14. 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)
ATM – Automated Teller Machine
Online banking requires you to register your account for online access using a username and password.
Mobile banking is possible with a data-ready device (smart phone, personal digital assistant (PDA), droid or iPhone).
In most cases, you can check your balance, pay bills and transfer money by calling your financial institution.
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15. A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
Banking/checking online
Also known as Internet banking
Via 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 acct fees, quick access to info, savings on postage and checks
But, may still need to visit the ATM
Possible from anywhere you have Internet access.
All major consumer financial institutions offer online banking and bill payment.
After logging on, you can add payee information for any bill you want to pay via online banking. You also can see balances and activity for all your accounts, and transfer money between those accounts with a few clicks.
Convenient means no trips to the post office or mailbox to mail bill payments, no need to visit a bank teller as long as deposits are made electronically, and the ability to pay bills and view activity just about any time and anywhere (for example, no need to worry about bills going unpaid while you are traveling!). Fees on e-accounts (where all or most deposits and other transactions are made electronically) are generally low or nonexistent. You don’t have to wait for your monthly statement to see if a check has cleared, a deposit has been processed, or what your balance is. You can cut out postage costs for mailing bill payments and reduce the number of checks you have to buy.
For non-direct deposited checks (a gift, payment for something you sold, reimbursement from a friend or family member, etc.), you’ll still have to make a trip to the ATM to make the deposit. You’ll also have to visit the ATM to withdraw cash as needed unless you can request cash back when you pay with your debit card at a grocery store or other business.
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16. 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
If the financial institution is new to you, and particularly if it has no brick-and-mortar (physical) locations, you should confirm with the FDIC (Federal Deposit Insurance Corporation) at that your deposits with the institution are insured (up to $250,000). (Search by name, city, state or ZIP code.) Banks chartered overseas may not be FDIC-insured.
Account passwords should be at least eight characters long and use numbers and symbols as well as letters.
Don’t give out your logon name or password or keep them where someone could find them.
Watch out for messages that pretend to be from your bank and ask for sensitive information such as an account number, birth date, Social Security number or password. Your financial institution will never ask for this information via . Also, beware of clicking on a link in such an . Often, these links lead to copycat websites that lure you into giving your personal information. Before conducting a transaction, always type in the correct website address for your bank yourself (rather than using a link in an ).
Don’t conduct online banking using unsecured and unencrypted Wi-Fi—this puts your information out there for someone to grab. Learn how to protect yourself on Wi-Fi at Lifehacker.com and OnGuardOnline.com.
Monitor your account activity regularly—even daily. If you see anything suspicious, contact the financial institution immediately.
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17. 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” (bounced check) being charged to your account.
So that you know how much money you have in your account
So that you can track your spending and stick to a budget
Discuss how important is is to write down all transactions that you make: checks you write, ATM withdrawals and purchases and “cash back” using your debit card. This can help you avoid “bounced check fees” (NSF fees)
This also helps with tracking spending and sticking to a budget: you have a record of how much you spend each month on rent, bills and anything else you pay for with checks or your ATM card.
Let participants know that the MoneyWI$E series also features “Manage Your Money Wisely: Tracking Your Money,” a fact sheet on budgeting and money management. If possible, bring some of these brochures with you.
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18. A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
Savings accounts
How is a savings account different from a checking account?
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What is interest?
Interest is the cost of borrowing money
When a bank/credit union gives you a loan, you pay interest to them
When you keep your savings in a bank/credit union, they pay interest to you
APR, or annual percentage rate, is the annual amount of interest, expressed as a percentage of the amount loaned or borrowed
You may want to point out that while some checking accounts accumulate interest like savings accounts do, most do not.
Interest bearing checking accounts may have higher maintenance fees.
Explain that the annual percentage rate, or APR, can be the amount you pay (such as for a mortgage), or the amount paid to you (such as in your savings account).
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20. A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
Interest
Simple interest
$100 on deposit for 10 years at a 1% APR would earn $10 in interest
Compound interest
The same deposit, compounded monthly, would earn $10.51 (51¢ more because of compounding)
Compounding earns more, especially if you save regularly
compounding interest helps your money grow, you can save the most money by making regular deposits into your savings account so that it grows with the power of compound interest.
Example: Add $10 per month to the initial $100 deposit for 10 years, and the account would be worth $1, after 10 years.
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21. THINGS YOU NEED TO KNOW ABOUT ATMS
Access to your account seven days a week, twenty-four hours a day. ATMs encourage you to take more money out of your account that you need. If you do not keep track of how much you are getting from the ATM, you will not know what is in your account and you may start to bounce checks. ATMs are not always free. Before opening an account, make sure that you understand the financial institution’s rules about ATMs. Your financial institution probably will not charge you for using ATMs that they own, but others may charge you for using their ATMs and your financial institution may charge you for using an ATM that they do not own. If your bank or credit union owns the ATM, their name will be on it.

22. WRITING A CHECK Always write in ink
Always write clearly and be sure spelling is correct
Record each check in your checkbook register
The date on which you are writing the check. Do not postdate.
The person or business to whom the check is to be paid (the payee).
The dollar amount of the check written in numbers.
The amount of the check in words.
Signature
Memo

23. MAKING DEPOSITS Your account number Your name and address
The date the check is being deposited into your account
This section is divided as follows:
Currency-write the amount of paper money that you are depositing.
Coins- Write the amount of change that you are depositing.
Checks-Write the amount of each check that you are depositing. If you run out of room, write on the back of the deposit slip. Make sure that the dollar and cent amounts are in the right columns.
Total Checks- Add up all the checks that you are depositing and write it here.
Subtotal-Add up currency, coins and checks. Then write total here.
Less cash-If you want cash back, write the amount here.
Total-Write the total amount of the deposit here. This is the subtotal minus the cash you are getting back.
Your signature (This is only required if you are getting cash back.)

24. Things You Will Need To Open an Account
First, middle and last name
Social security number
Photo ID (drivers license or state ID)
Home address
Home telephone number
Work address
Work telephone number
Name and address of two people who could serve as references
A reference is someone who will tell the bank or credit union that you are a good and hard-working person, that you can handle your financial and work situations and that you can be trusted to take care of a checking account.

25. Importance of Saving & Investing
Investing Basics (see pp 70 & 71) Savings vs Investing Risk and Return (see p 74) Time is on Your Side (see p 76)

26. What is a certificate of deposit?
Certificates of deposit (CDs)
What is a certificate of deposit?
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27. 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
Review these key points about CDs.
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28. 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)
Questions to consider when opening an account.
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29. 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
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Opening an account
What should you bring with you when you are opening a new account? .
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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
No notes for this slide.
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32. 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
Ownership: Review what the terms “sole owner,” “joint owner” and “primary owner” mean:
- If the account is in one person’s name, check “Sole Owner.”
- If it is a joint account, check “Joint Owner.”
- The “Primary Owner” is the first owner listed on the account.
- The primary owner will receive an annual statement of interest (1099-INT) for tax purposes.
- A copy of the 1099-INT form will be given to the Internal Revenue Service (IRS).
W-9 Certification:
- Because the money in the account will be earning taxable income, you will be asked for “W-9 Certification,” or “Request for Taxpayer Identification Number and Certification,” a requirement of the IRS.
- “Backup withholding” is an IRS requirement for people who have underpaid or been negligent in paying their taxes.
- When you file your taxes, you get the excess back.
There is a penalty if you lie to a bank or other company about whether you are subject to backup withholding.
Review the different ATM card options with the group:
- Optional means that you do not have to have the service unless you want to.
- Savings account holders can request an ATM or debit card so that they can access their money at an ATM.
- It is not necessary to have an ATM or debit card: savings account holders can also go into a branch of their bank and use one of the bank’s withdrawal or deposit slips to make a withdrawal or deposit.
- If you already had a checking account at “MoneyWI$E Bank,” you could ask that it be linked to your new savings account. That way, you could use your existing ATM or debit card to access the new account.
ATM Fees:
- A “foreign bank” is not in another country—it is any bank that is not affiliated with “MoneyWI$E Bank.”
- When customers of one bank use another bank’s ATM, usually they are charged twice, once by their bank and once by the foreign bank.
- These two fees can add up to $4 or more on a single withdrawal.
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33. 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 (including “cash back” at stores)
ATM cash withdrawals
Any bank fees you pay
Any online transactions
Any automatic payments/deductions
All deposits and credits
Emphasize the importance of recording bank fees and ATM and debit card transactions, in addition to checks, in your checkbook register. This keeps you up to date on how much money you have available.
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