2. MoneyWi$e: Banking Basics MoneyWi$e ‘Banking Basics’  MoneyWi$e is a joint financial education project of Consumer Action and Capital One

3. MoneyWi$e: Banking Basics 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.

4. MoneyWi$e: Banking Basics 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.

5. MoneyWi$e: Banking Basics Participants’ folders contain:  You Can Bank On It (brochure)  Check Writing (class activity)  Sample ChexSystems Report  Sample Account Application  Choosing a Bank or Credit Union (take-home worksheet)  Evaluation of the MoneyWi$e Banking Basics Seminar

6. MoneyWi$e: Banking Basics Bank accounts  What are some of the advantages to having a bank account?

7. MoneyWi$e: Banking Basics 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

8. MoneyWi$e: Banking Basics Banks and credit unions  What is the difference between a bank and a credit union?

9. MoneyWi$e: Banking Basics 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.

10. MoneyWi$e: Banking Basics 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.

11. MoneyWi$e: Banking Basics Account verification services  How do banks find out about your past account history?

12. MoneyWi$e: Banking Basics 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.

13. MoneyWi$e: Banking Basics 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.

14. MoneyWi$e: Banking Basics 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.

15. MoneyWi$e: Banking Basics 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.

16. MoneyWi$e: Banking Basics 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

17. MoneyWi$e: Banking Basics Checking accounts  What kinds of things can you do with a checking account?

18. MoneyWi$e: Banking Basics 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.

19. MoneyWi$e: Banking Basics 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

20. MoneyWi$e: Banking Basics 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.

21. MoneyWi$e: Banking Basics 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.

22. MoneyWi$e: Banking Basics Check writing activity  In this activity you will practice writing a check and entering it into a sample checkbook register.

23. MoneyWi$e: Banking Basics Check writing  Why is it important to enter the checks you write in your checkbook register?

24. MoneyWi$e: Banking Basics 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.

25. MoneyWi$e: Banking Basics Savings accounts  How is a savings account different from a checking account?

26. MoneyWi$e: Banking Basics 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.

27. MoneyWi$e: Banking Basics 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.

28. MoneyWi$e: Banking Basics 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.

29. MoneyWi$e: Banking Basics 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!

30. MoneyWi$e: Banking Basics Banking Basics  Session Two (2 hours)

31. MoneyWi$e: Banking Basics 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.

32. MoneyWi$e: Banking Basics Certificates of deposit (CDs)  What is a certificate of deposit?

33. MoneyWi$e: Banking Basics 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.

34. MoneyWi$e: Banking Basics Safe deposit boxes  What is a safe deposit box?  What are some things that you might keep in a safe deposit box?

35. MoneyWi$e: Banking Basics 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.

36. MoneyWi$e: Banking Basics Safe deposit boxes  What should you not keep in a safe deposit box?

37. MoneyWi$e: Banking Basics 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.

38. MoneyWi$e: Banking Basics Opening a bank account  What are some questions you should ask when you are deciding on a bank or credit union?

39. MoneyWi$e: Banking Basics 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?

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

41. MoneyWi$e: Banking Basics Opening a bank account  What should you bring with you to the bank when you are opening a new account?

42. MoneyWi$e: Banking Basics 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

43. MoneyWi$e: Banking Basics 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

44. MoneyWi$e: Banking Basics Banking costs  What are some ways you can save money on banking costs?

45. MoneyWi$e: Banking Basics 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.

46. MoneyWi$e: Banking Basics 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.

47. MoneyWi$e: Banking Basics 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

48. MoneyWi$e: Banking Basics 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.

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

50. MoneyWi$e: Banking Basics Savings account application  Ownership  W-9 Certification

51. MoneyWi$e: Banking Basics Savings account application  Optional Services –ATM Cards –Linking accounts  ATM fees

52. MoneyWi$e: Banking Basics 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.

53. MoneyWi$e: Banking Basics 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

54. MoneyWi$e: Banking Basics 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.

55. MoneyWi$e: Banking Basics 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.

56. MoneyWi$e: Banking Basics 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.

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