© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Reflection # “The safest way to double your money is to fold it over once and put it in your pocket” What does this mean? Test Correction Unit 1 You will need: Your scantron A writing utinsil Unit 1 Test A lined piece of paper Jigsaw Groups at Door

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Test Correction  Your scantron has been corrected, the right answers are in red on the right hand side of the testing section.  Look at your test and your answer sheet and see which ones you got wrong.  Retrain Your Brain AND Earn Extra Points  On your OWN lined paper correct your test  Tell me why the RIGHT answer is RIGHT.  Combine the question and the correct answer into a complete full sentence that shows your understanding.  You only have 10 minutes!

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Class Assignment 2: Managing a Checking Account Using your checks and deposit slips on (page 13), make the following banking transactions and record them on the check register (page 14 ) in order. Today fill out: 1.February 3 – Deposit: you open your checking account with the following deposit information: Check #3698 for $165.00, Check #2438 for $89.63 and $20 cash, you request no money back. 2.February 4 – Write check #101 to the Electric Company for $62.88, your account number is 12632

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Depository Institution Essentials Advanced Level

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 What is the name of a depository institution in your community? ? What is a Depository Institution? Depository institutions are businesses which offer multiple services in banking and finance Commercial Banks Credit Unions These are the two most common types of depository institutions.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Types of Depository Institutions Commercial BankCredit Union Description Full service institutions- may offer all of the services provided by depository institutions Non-profit cooperative institution that is owned by the members and often provides more customer friendly interest rates than commercial banks Used by? Open to anyone who wants to utilize a depository institution Members must possess a common bond Type of Insurance Coverage Federal Deposit Insurance Corporation (FDIC) National Credit Union Administration (NCUA) Insurance Protects Will restore the lost funds in savings tool accounts up to $250,000 per account

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Choosing a Depository Institution All depository institutions differ from one another in regards to locations, services offered, interest rates offered, and specific features provided Choose the correct depository institution to meet individual needs Individuals may choose to use one depository institution or multiple depository institutions Individuals may have more than one type of account at the same depository institution

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Depository Institution Insurance  Depository institutions should be insured to protect consumers against loss. If the institution is insured, it will be posted in view for the customer to see. Depository institutions are insured by either FDIC or NCUA. Federal Deposit Insurance Corporation (FDIC) is a federal government agency which insures member depository institutions against loss. If a depository institution that is covered by the FDIC fails, the FDIC will restore the lost funds in savings tool accounts up to $250,000 per account. National Credit Unit Administration (NCUA) provides insurance protection for credit unions. Each depositor is insured up to at least $250,000 on savings tool accounts.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Advantages and Disadvantages of Using a Depository Institution May have to pay fees May have required minimum balances Sharing financial information Assists in managing finances and reaching financial goals Protection from loss (insurance) Opportunity to earn interest Do you use a depository institution? ?

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Financial Goals  A goal is defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish  Financial goals are specific objectives to be accomplished through financial planning Choose a depository institution that will help meet financial goals Reach for stars Tom Jackon

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Jigsaw Groups  Find your clothing group. (all hats, ect.)  Get your group’s envelope and read your information. Find the definitions for your group and fill in your study guide  Find your color group. (all green together, ect.)  Share your information with the rest of the group and fill in your study guides.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Compound Interest (in plain English)  Watch the video to help understand compound interest.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Class Assignment 1: Calculating Interest  Using the handout from class calculate simple, compound, and the rule of 72 interest rates. Keep this sheet to turn in at the end of the unit.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Services Offered by Depository Institutions Savings Tools Investment Tools Credit Safe- Deposit Boxes Financial Counseling Individual depository institutions may offer all or some of these services.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Services Many services offered by depository institutions are interest bearing Interest - the price of money Interest bearing accounts either charge the consumer interest for money borrowed or earn interest for the consumer Interest rate - percentage rate used annually to calculate the total interest either gained or lost from an account Look for high interest rates on interest-earning accounts and low interest rates when borrowing money.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Savings Tools  Savings tools are secure, easily accessible accounts that assist in money management  May be interest or non-interest earning  As long as the depository institution is insured, savings tools are insured against lost Checking Accounts Savings Accounts Money Market Deposit Accounts Certificate of Deposits (CDs)

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Savings Tools Checking Account  Used to transfer funds deposited into the account to make a cash purchase  Interest or non-interest earning Savings Account  Hold money not spent on current consumption  Interest earning At a credit union a checking account is known as a share draft account and a savings account is known as a share account.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Savings Tools Money Market Deposit Account  Offers higher interest rates than a savings account  Have a minimum balance requirement  Limited to a certain number of transactions each month Certificate of Deposit  Interest earning  Restricted access to the funds

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 19 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Investment Tools  Earn higher interest rates than savings tools but the funds are not as easily accessible  Not insured against loss Stocks Bonds

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 20 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Credit  Credit is when goods, services, or money is received in exchange for a promise to pay a definite sum of money at a future date  Consumer is charged interest Loans Credit Cards What might a person need a loan to purchase? ?

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 21 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Other Services Safe-Deposit Boxes  A secured box to store valuable and important personal items Financial Counseling  Information and advice is given to customers to help them make financial decisions What services offered by depository institutions would you use? ?

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 22 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Depository Institution Features Electronic Banking (E-Banking) Made possible by electronic funds transfers (EFTs)- utilize computer networks to transfer funds electronically (rather than by check or cash) among depository institution accounts Adds to the convenience and money management tools of certain depository institution services Allows 24-hour access to move money electronically in a fast and paperless way

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 23 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Advantages and Disadvantages of E-Banking Increased risk of fraud and identity theft if consumers are not careful with their personal information 24-hour access Fast transactions Paperless transactions Convenience Worldwide access  Regulation E was established to combat the security issues of electronic banking  Covers all EFT’s including transfers occurring through an electronic terminal, computer, telephone, or magnetic tape

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 24 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 E-Banking Safety If a consumer feels his or her funds have been accessed without permission Report the problem immediately to the depository institution involved To take full advantage of e-banking:  Keep personal security as your first priority  Know how to protect your personal information

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 25 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Types of E-Banking  Will vary among depository institutions  Will vary between services and accounts at the same depository institution Debit Cards ATM’s Direct Deposit & Direct Payment Online Banking

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 26 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Debit Cards  Plastic card which looks like a credit card but is electronically connected to the cardholder’s depository institution account  Functions like a check but electronically  Usually used for savings tools, especially checking, savings, and money market deposit accounts  Require using a personal identification number (PIN) or signature to perform transactions

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 27 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Debit Card Safety Tips Keep receipts and check statements carefully and frequently for any unauthorized or incorrect charges Sign the back of the card in the signature box with “Please see ID” in addition to a signature Do not make a PIN number one that reveals a birth date, social security number, address, or telephone number Keep PIN numbers safe If a debit card is lost, report it to the depository institution as soon as possible

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 28 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Fraudulent Debit Card Charges If reported within 2 days, the consumer is held responsible for no more than $50 in fraudulent charges If reported within 60 days, the consumer is held responsible for no more than $500 in fraudulent charges After 60 days, the consumer is held liable for no more than the amount of unauthorized transfers

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 29 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Automated Teller Machines (ATMs)  Electronic computer terminals which offer automated, computerized banking  Usually used for savings tools, especially checking and savings accounts  Accessed with ATM and/or debit cards  Allow customers to make deposits, withdrawal cash, make account transfers, and check account balances  May be offered in many different locations or few (if any) locations

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 30 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Direct Deposit & Direct Payment Direct DepositDirect Payments Allows paychecks and benefit checks to be directly deposited into a specified depository institution account (savings or investment tools) Authorize bills to be paid electronically by a specified depository institution account (savings or investment tools)

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 31 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Online Banking  Complete transactions with a depository institution from a personal computer (PC) or through other wireless technology (personal digital assistant (PDA) or cellular phone)  May access account information and statements, transfer funds, manage and pay bills, and apply for loans and mortgages  May be used for savings tools, investment tools, and credit accounts Online banking is also known as internet banking.

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 32 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Online Banking Safety Tips The Uniform Resource Locator (URL) should end with an “s,” Or, have a closed pad lock in the bottom right hand corner of the website Do not authorize online bill paying through an account, go directly to the company’s website Passwords should be combinations of letters, numbers, and characters Change passwords at least once per month Make sure to log out from online bill paying sites immediately Never enter an online banking site on a wireless network away from home; use a wireless network at home only if it is thoroughly protected What features offered by depository institutions would you use? ?

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 33 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Researching Depository Institutions What services does the depository institution offer? What features of these services are offered? Does the depository institution offer high interest rates on interest-earning accounts and low interest rates on credit accounts? Where is the depository institution located? Is the depository institution insured against loss?

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 34 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Summary What is a depository institution? How do depository institutions differ from one another? How should an individual choose a depository institution? Businesses which offer multiple services in banking and finance Location Services offered Interest rates offered Features offered Research depository institutions and choose the one(s) that best fits needs and helps reach personal financial goals Type

© Family Economics & Financial Education – October 2010 – The Essentials to Take Charge of Your Finances – Depository Institution Essentials – Slide 35 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona G1 Summary Depository institutions offer many services to customers. What are these services? Depository institutions offer features to their services. What are these features? Find the depository institution that best fits your needs and helps you reach financial goals! Savings tools Electronic banking- Investment tools Credit Safe-deposit boxes Financial counseling Debit cards ATMs Direct deposit Direct payment Online banking