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MoneyWi$e ‘Banking Basics’ MoneyWi$e is a joint financial education project of Consumer Action and Capital One What will the ‘Banking Basics’ training each us? We want you to gain a thorough understanding of personal banking services and how they can benefit you. You will learn about:

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moneywi e banking basics
MoneyWi$e ‘Banking Basics’
  • MoneyWi$e is a joint financial education project of Consumer Action and Capital One

MoneyWi$e: Banking Basics

what will the banking basics training each us
What will the ‘Banking Basics’ training each us?
  • We want you to gain a thorough understanding of personal banking services and how they can benefit you.

MoneyWi$e: Banking Basics

you will learn about
You will learn about:
  • The difference between banks and credit unions.
  • How to select a bank.
  • How to open a bank account.
  • How to keep bank costs down.
  • How to get more interest on your savings.

MoneyWi$e: Banking Basics

participants folders contain
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: Banking Basics

bank accounts
Bank accounts
  • What are some of the advantages to having a bank account?

MoneyWi$e: Banking Basics

advantages of a bank account include
Advantages of a bank account include:
  • Your money is safe.
  • Each account is insured.
  • Canceled checks are proof that you paid a bill.
  • Using check-cashing stores and money orders is more expensive than paying bank fees.
  • A bank account can help you keep track of how you spend your money

MoneyWi$e: Banking Basics

banks and credit unions
Banks and credit unions
  • What is the difference between a bank and a credit union?

MoneyWi$e: Banking Basics

banks vs credit unions
Banks vs. credit unions
  • A credit union is a non-profit cooperative financial institution owned and controlled by its members.
  • A bank is a for-profit company that makes money from charging fees and lending money.

MoneyWi$e: Banking Basics

credit unions
Credit unions...
  • Serve groups that share something in common, such as their profession, place of worship or neighborhood.
  • Provide checking and savings accounts and loans, often with better rates than banks.

MoneyWi$e: Banking Basics

account verification services
Account verification services
  • How do banks find out about your past account history?

MoneyWi$e: Banking Basics

chexsystems
ChexSystems...
  • Is the major national account verification company.
    • When you apply for a new checking account, the bank finds out if you are in the ChexSystems database.
    • If you ever abandoned a checking account with a negative balance, you are probably listed in the ChexSystems database.

MoneyWi$e: Banking Basics

chexsystems records
ChexSystems records
  • Reports about overdrafts or closed accounts remain in your file for five years
  • You can get a copy of your report ($9 in most states) by contacting ChexSystems
  • You have the right to dispute inaccurate information in your account verification report.

MoneyWi$e: Banking Basics

your rights
Your rights
  • You can get a free copy of your ChexSystems report if:
    • You have been denied a bank account in the past 60 days because of information provided by ChexSystems.
    • Your checks were stolen and used by an impostor or you are the victim of any bank fraud.

MoneyWi$e: Banking Basics

don t get discouraged
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: Banking Basics

chexsystems sample report
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: Banking Basics

checking accounts
Checking accounts
  • What kinds of things can you do with a checking account?

MoneyWi$e: Banking Basics

checking accounts17
Checking accounts
  • Checking accounts allow you to:
    • Write checks.
    • Use your ATM/debit card to get cash at ATM machines and to make purchases at point-of-sale terminals (such as at the supermarket).
    • In some cases, your ATM/debit card can be used to make purchases where credit cards are accepted.

MoneyWi$e: Banking Basics

checking accounts18
Checking accounts
  • Free checking
  • Direct deposit
  • Electronic transfer accounts (ETAs)
  • Basic (Lifeline) accounts
  • Online banking and bill payment
  • Low cost accounts for seniors or students

MoneyWi$e: Banking Basics

debit cards
Debit cards
  • You can use your debit card in two ways:
    • At an ATM or a point-of-sale (POS) terminal with your personal identification number, or PIN.
    • At stores and restaurants that accept credit cards, without providing your PIN. You will be asked to sign a receipt.

MoneyWi$e: Banking Basics

debit cards20
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: Banking Basics

check writing activity
Check writing activity
  • In this activity you will practice writing a check and entering it into a sample checkbook register.

MoneyWi$e: Banking Basics

check writing
Check writing
  • Why is it important to enter the checks you write in your checkbook register?

MoneyWi$e: Banking Basics

keep a record of your checks
Keep a record of your checks:
  • So that you don’t bounce checks.
  • 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: Banking Basics

savings accounts
Savings accounts
  • How is a savings account different from a checking account?

MoneyWi$e: Banking Basics

what is interest
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.
  • In a savings account, your money works for you by earning interest.

MoneyWi$e: Banking Basics

types of interest
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: Banking Basics

how to figure interest
How to figure interest
  • The annual percentage rate (APR) is the amount of money you would earn if you left your money on deposit for one year.
  • For example, if you left $100 on deposit for one year at a 2% APR, you would earn $2 in interest at the end of the year.

MoneyWi$e: Banking Basics

session one wrap up
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 complain if you have a problem with your bank.
  • See you then!

MoneyWi$e: Banking Basics

banking basics
Banking Basics
  • Session Two (2 hours)

MoneyWi$e: Banking Basics

banking basics30
Banking Basics
  • Session Two
    • Today we’ll learn how you can earn more interest on your money with CDs, what to keep in a safe deposit box, things to consider when you are looking for a bank or credit union and how to complain if you have a problem with your bank.

MoneyWi$e: Banking Basics

certificates of deposit cds
Certificates of deposit (CDs)
  • What is a certificate of deposit?

MoneyWi$e: Banking Basics

certificates of deposit cds32
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: Banking Basics

safe deposit boxes
Safe deposit boxes
  • What is a safe deposit box?
  • What are some things that you might keep in a safe deposit box?

MoneyWi$e: Banking Basics

safe deposit boxes34
Safe deposit boxes
  • 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: Banking Basics

safe deposit boxes35
Safe deposit boxes
  • What should you not keep in a safe deposit box?

MoneyWi$e: Banking Basics

safe deposit boxes36
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: Banking Basics

opening a bank account
Opening a bank account
  • What are some questions you should ask when you are deciding on a bank or credit union?

MoneyWi$e: Banking Basics

questions to ask
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?
  • What happens if my balance falls below the minimum requirement?

MoneyWi$e: Banking Basics

questions to ask39
Questions to ask:
    • Is there a maximum number of checks I can write each month?
    • Is there a fee for using your ATMs?
  • TIP: Use the MoneyWi$e worksheet in your folders as a guide when you apply for an account at a bank or credit union.

MoneyWi$e: Banking Basics

opening a bank account40
Opening a bank account
  • What should you bring with you to the bank when you are opening a new account?

MoneyWi$e: Banking Basics

identification
Identification
  • When you go to the bank branch 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: Banking Basics

keeping your account straight
Keeping your account straight
  • Once you have an account, write down and deduct in your checkbook:
    • Every check you write
    • Every ATM or debit card transaction you make
    • Any bank fees you pay

MoneyWi$e: Banking Basics

banking costs
Banking costs
  • What are some ways you can save money on banking costs?

MoneyWi$e: Banking Basics

ideas to keep banking costs down
Ideas to keep banking 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.

MoneyWi$e: Banking Basics

ideas to keep banking costs down45
Ideas to keep banking costs down
  • Use direct deposit for your paycheck or government benefits check.
  • Buy checks from a mail-order company instead of your bank.
  • Ask the bank to reverse the occasional late fee or bounced check fee.

MoneyWi$e: Banking Basics

saving on checks
Saving on checks
  • These are two mail-order sources for buying checks for less:
    • Checks in the Mail, 877-397-1541, (www.citm.com)
    • Current Checks, 800-426-0822, www.currentchecks.com

MoneyWi$e: Banking Basics

overdraft protection
Overdraft protection
  • An optional bank service called overdraft protection can save you from bouncing checks.
  • It can work with a loan or line of credit or with your savings account.

MoneyWi$e: Banking Basics

sample savings account application an activity
Sample savings account application — an activity
  • This is a sample application for an interest-bearing account at “MoneyWi$e Bank.”
  • Let’s walk through the activity together.

MoneyWi$e: Banking Basics

savings account application
Savings account application
  • Ownership
  • W-9 Certification

MoneyWi$e: Banking Basics

savings account application50
Savings account application
  • Optional Services
    • ATM Cards
    • Linking accounts
  • ATM fees

MoneyWi$e: Banking Basics

signing the application
Signing the application
  • When you sign a bank account application you are giving the bank or credit union legal permission to access your credit report or ChexSystems report.

MoneyWi$e: Banking Basics

how to complain
How to complain
  • If your bank or credit union makes a mistake, such as mixed-up deposit, no-show bill payment or double debit, you have the right to complain

MoneyWi$e: Banking Basics

solving a bank problem
Solving a bank problem
  • Complain as soon as you can.
  • Always write down the name of the person who helped you.
  • Offer a solution and ask the bank to correct the problem.
  • Don’t lose your temper.
  • Send a summary letter (registered mail receipt requested) to prove you took timely action.

MoneyWi$e: Banking Basics

taking it higher
Taking it higher
  • If you are not able to resolve your complaint with your bank or credit union, you can complain to the government regulator.
  • Read the ‘You can bank on it’ brochure in your folders for more information.

MoneyWi$e: Banking Basics

now you can grade us
Now you can grade us
  • Please fill out the evaluation form and leave it with me before you leave.
  • The information helps us provide you with better programs.

MoneyWi$e: Banking Basics

congratulations
Congratulations!
  • By attending the MoneyWi$e ‘Banking Basics’ training you’ve empowered yourself to make good decisions about banking services.

MoneyWi$e: Banking Basics