2.  Direct deposit  Automated teller machine (ATM)  Debit card  Point of sale transaction  Commercial bank  Savings and loan association (S&L)  Credit union

3.  Consider pros and cons of different methods of payment (cash, debit, credit)  Remember your long term goals and avoid debt (easy with credit cards)  Sources of cash—FAST!  Use your savings and make withdrawal  Get a loan/borrow money BOTH CAN DELAY YOUR OTHER FINANCIAL GOALS

4.  SAVINGS  SAFE STORAGE OF FUNDS FOR FUTURE USE  TIME DEPOSIT—IF YOU LEAVE IN FOR A LONG TIME  PAYMENT SERVICES  TRANSFERRING MONEY FROM ACCOUNTS  CHECKING ACCOUNT IS MOST COMMON PMT SVC  DEMAND DEPOSIT—MONEY YOU DEPOSIT INTO CHK  BORROWING  CREDIT CARD  CASH LOAN  MORTGAGE / CAR LOAN

5.  DIRECT DEPOSIT  AUTOMATIC DEPOSIT OF PAYCHECK INTO ACCOUNT  RECEIVE STUB INSTEAD OF ACTUAL CHECK  SAVES TIME AND EFFORT  AUTOMATIC PAYMENTS  PAY BILLS ONLINE  BANK TAKES MONEY FROM ACCOUNT YOU CHOOSE

6.  ATMS (AUTOMATED TELLER MACHINE)  A COMPUTER TERMINAL THAT ALLOWS WITHDRAWLS OF CASH FROM AN ACCOUNT  CAN ALSO MAKE DEPOSITS, TRANSFERS.  LOCATED ALL OVER (BANKS, MALLS, STADIUMS)  YOU MUST APPLY FOR A CARD TO USE  CALLED A DEBIT CARD —CARD THAT ALLOWS YOU TO MAKE PURCHASES OR WITHDRAWLS FROM CHECKING (VISA/MASTERCARD LOGO)  MUST HAVE A PIN (PERSONAL IDENTIFICATION #)  SOME BANKS MAY CHARGE A FEE IF USE ANOTHER  IF LOST, NOTIFY BANK IMMEDIATELY

7.  PLASTIC PAYMENTS  POINT OF SALE TRANSACTIONS DEBIT CARD TRANSACTIONS AT STORES OR RESTAURANT  STORE VALUE CARDS PREPAID CARDS (SUBWAYS, PHONE CARDS, GIFTCARDS)  ELECTRONIC CASH IN THE WORKS FOR ELECTRIC MONEY, COINS, CHECKS

8.  SHOULD I PUT MONEY IN A SAVINGS OR KEEP IN CASH? WHAT IF IT LOOSES VALUE?  WHAT IF NO ATM NEAR HOME? HIGH FEES?  IS IT WORTH OPENING A CHECKING ACCOUNT IF I HAVE TO KEEP AT LEAST $500 IN THERE?

9.  FDIC ( FEDERAL DEPOSIT INSURANCE CO)  MAKES SURE EACH ACCOUNT IN A BANK DOES NOT LOSE ITS MONEY  INSURES DEPOSITS UP TO $100,000  ALL BANKS MUST PARTICIPATE IN FDIC PROGRAM

10.  DEPOSIT INSTITUTIONS  COMMERCIAL BANKS GOAL IS TO MAKE MONEY (FOR-PROFIT) OFFERS CHECKING, SAVINGS, LENDING SERVE INDIVIDUALS AND BUSINESSES NEED A LISCENSE TO OPERATE  SAVINGS AND LOAN ASSOCIATIONS (S&L) SPECIALIZES IN SAVINGS ACCTS AND MORTAGE LOANS OFFER OTHER SERVICES (CHECKING, INVESTMENTS)

11.  MUTUAL SAVINGS BANK SPECIALIZE IN SAVINGS ACCTS AND MORTGAGE LOANS PERSONAL AND AUTO LOANS AS WELL INTEREST MAY BE LOWER PAYS HIGHER INTEREST ON SAVINGS ACCOUNTS  CREDIT UNIONS NON-PROFIT FINANCIAL INSTITUTION OWNED BY MEMBERS AND WORK FOR THEIR BENEFIT MOST OFFER FULL RANGE OF SERVICES (CHEKING, SAVINGS, LOANS, CREDIT CARDS, INVESTMENTS) FEES AND INTEREST MIGHT BE LOWER

12.  NON-DEPOSIT INSTITUTIONS  LIFE INSURANCE COMPANIES PROVIDE FINANCIAL SECURITY FOR DEPENDANTS  FINANCE COMPANIES MAKE HIGH-INTEREST LOANS TO CONSUMERS AND SMALL BUSINESSES THAT HAVE BAD CREDIT  MORTGAGE COMPANIES SPECIALIZE IN LOANS FOR HOMES  INVESTMENT COMPANIES BUYS STOCKS, BONDS AND OTHER TYPES MANAGES THESE INVESTMENTS CALLED MUTUAL FUNDS

13.  WHERE CAN YOU GET BEST INTEREST RATE?  WHERE CAN YOU GET FREE CHECKING?  IS THE BANK FDIC INSURED?  ARE THERE CONVIENIENT LOCATIONS?  ARE THERE ONLINE BANKING SERVICES?  5.1 ASSESSMENT 1-3, 5

14.  REGULAR SAVINGS ACCOUNTS (PASSBOOK)  REQUIRE NO MINIMUM BALANCE  WITHDRAWL AS MUCH AS YOU NEED  LOW INTEREST—DOESN’T MAKE MUCH  RECEIVE A LEDGER TO KEEP TRACK OF ACTIVITY  CREDIT UNIONS MAY BE CALLED SHARE ACCOUTS

15.  CERTIFICATES OF DEPOSIT (CDS)  MONEY IS PUT IN AN ACCOUNT FOR A PERIOD OF TIME TO EARN A SPECIFIC RATE OF RETURN  TERM: AMOUNT OF TIME YOU LEAVE IT IN  MATURITY DATE: DATE MONEY IS AVAILABLE TO YOU  LOW-RISK, HIGHER INTEREST THAN SAVINGS LEAVE MONEY IN FOR 1 MONTH-5+ YEARS WILL PAY A PENALTY FOR TAKING OUT EARLY MINIMUM DEPOSIT REQUIRED

16.  SHOP RATES (CAN GET FROM ANYWHERE)  CHOOSE MATURITY DATE WISELY  NEVER LET A BANK “ROLL OVER” A CD  CONSIDER WHEN YOU NEED THE MONEY  MIGHT WANT TO CREATE SEVERAL ACCOUNTS CALLED A CD PORTFOLIO

17.  MONEY MARKET ACCOUNTS  SAVINGS ACCOUNT THAT REQUIRES A MINIMUM BALANCE AND EARNS INTEREST THAT CHANGES EVERY MONTH  DEPENDS ON MARKET RATES/ECONOMY  YOU PAY A PENALTY IF IT DROPS BELOW $1000  LIMITED NUMBER OF CHECKS

18.  SAVINGS BONDS  YOU PURCHASE FROM GOVERNMENT FOR HALF OF FACE VALUE (WHAT PERSON GETS AT MATURITY)  PAY $250, HAS FACE VALUE OF $500  GOVERNMENT LIMITS PURCHASES TO $15000  BUY AT BANKS  MATURITY DATE DEPENDS ON WHEN PURCHASED  PENALTY IF CASHED EARLY  YOU PAY TAXES ON SAVINGS BONDS WHEN CASHED

19.  RATE OF RETURN  HOW MUCH YOU ARE EARNING/MAKING ON DEPOSITS  PERCENTAGE INCREASE IN THE AMOUNT FROM EARNED INTEREST  Ex: WHEN EMMA PUT $75 BABYSITTING MONEY INTO REGULAR SAVINGS ACCOUNT, SHE EARNED $3 INTEREST. WHAT WAS HER RATE OF RETURN? INTEREST AMOUNT/DEPOSITED AMOUNT (CHANGE TO PERCENT) 3/75=.04 = 4% ROR  PRACTICE PROBLEMS  LIQUIDITY: HOW EASY TO CHANGE INTO CASH (HOW EASY TO WITHDRAWL CASH FROM ACCOUNT)

20.  What does ATM stand for?  If a bank is FDIC insured, what does that mean?  Name 1 difference between a Credit Union and a Commercial Bank  What is a CD?  What is a Bond?  Find the Rate of Return if you deposit $350 into an account and you earn $18.75 interest  If your ROR is 15.5% on a $1200 deposit, how much interest did you earn?

21.  REGULAR CHECKING ACCOUNTS  NO MIN BALANCE (OR PAY A FEE)  ACTIVITY ACCOUNTS  BANK CHARGES A FEE FOR EVERY CHECK YOU WRITE AND YOU ALSO PAY MONTHLY FEE  NEVER A MINIMUM BALANCE REQUIRED  GOOD IF UNABLE TO KEEP MINIMUM BALANCE  INTEREST EARNING CHECKING  COMBO OF SAVINGS AND CHECKING  PAY INTEREST IF MAINTAIN A MINIMUM BALANCE

22.  RESTRICTIONS?  FEES/CHARGES?  INTEREST?  SPECIAL SERVICES?  OVERDRAFT PROTECTION AN AUTOMATIC LOAN TO YOUR ACCOUNT IF IT DROPS BELOW ZERO. YOU WILL PAY INTEREST BUT NO FEES

23.  OPENING AN ACCOUNT  WRITING CHECKS  CHECK REGISTERS  STOP-PAYMENT ORDER  REQUEST SENT IN FOR BANK NOT TO CASH CHECK  FEE $10-$20

24.  MAKING DEPOSITS  ENDORSING A CHECK: SIGNATURE OF WHO IT IS WRITTEN TO  BLANK ENDORSEMENT: CHECK HOLDER SIGNS BACK  RESTRICTIVE ENDORSEMENT: REQUIRES CHECKHOLDER SIGNATURE AND INSTRUCTIONS “FOR DEPOSIT ONLY”  SPECIAL ENDORSEMENT: TRANSFER CHECK TO SOMEONE ELSE “PAY TO ORDER OF” WRITTEN ON BACK  DO NOT ENDORSE UNTIL READY TO CASH/DEPOSIT IT  SIGN THE BACK  SIGN EXACTLY HOW WRITTEN ON FRONT  USE A PEN

25.  BANK WILL SEND A STATEMENT EACH MONTH  DEPOSITS  CHECKS WRITTEN  WITHDRAWALS  DEBIT CARD CHARGES  INTEREST EARNED  BANK RECONCILIATION  REPORT THAT SHOWS DIFFERENCE BETWEEN STATEMENT AND YOUR CHECKBOOK BALANCE  5.2 ASSESSMENT 1-3

26.  CHAPTER 5 REVIEW & ACTIVITIES  1-6  BANKING QUIZ 1-8  ADDITIONAL CLASS CHECKING PACKET  CHECKING SIMULATION