Banking: 101 1

Checking Account What is a Checking Account? An account where money is deposited and kept for day-to-day expenses Also called demand deposit because the money can be withdrawn on demand How can money be withdrawn from a checking account? In person Check Card ATM Card Cash back at stores Checks Direct Payment Checks 2

Canceled vs. Stop Payment What is a canceled check? What is a canceled check? A canceled check is a check that bears the bank’s stamp. You can use your canceled checks as proof of purchase or of payment if a Dispute arises. What is a stop payment order? What is a stop payment order? A stop payment order is a request that the bank not cash a specific check. The usual reason for stopping payment is that the check has been lost or stolen. Most banks charge a fee for this service. 2

Bouncing a Check A check written for more money than your account contains is called an overdraft. A financial institution receiving an overdraft usually stamps the check with the words “not sufficient funds” NSF and returns the check to the payee or at the payee’s institution. The check is considered “bounced.” The bank and the place where the check was written will both charge a fee. 10 WARNING: You are floating a check when you realize your account contains insufficient funds but you write a check anyway hoping that a deposit will clear before the check is cashed. WARNING: You are floating a check when you realize your account contains insufficient funds but you write a check anyway hoping that a deposit will clear before the check is cashed.

Online Bill Pay The bank pays your bills for you The bank pays your bills for you  Anyone, anytime, anywhere in the U.S. Set up recurring payments to be automatically made Set up recurring payments to be automatically made Receive reminders when bills are due Receive reminders when bills are due Sign up for E-Billing to get bills electronically delivered Sign up for E-Billing to get bills electronically delivered Keep all bill payment history in the same place Keep all bill payment history in the same place 12

Online Banking Available 24/7 with an Internet connection Available 24/7 with an Internet connection Access and manage your bank accounts and credit cards Access and manage your bank accounts and credit cards Keep an eye on recent transactions Keep an eye on recent transactions Transfer funds between accounts Transfer funds between accounts View current and past statements View current and past statements View check and deposit slip copies View check and deposit slip copies Download transactions into money management documents Download transactions into money management documents 11

Additional Services Wire Transfers Direct Deposits (paycheck to bank) Certificates of Deposit (investments) Safe Deposit Boxes (for jewelry, collectibles, birth & marriage certificates—not for cash) Foreign Currency Exchange 20

Money Orders Money orders are sold by banks to people who do not wish to use cash or do not have a checking account. A money order is like a check, except that it can never bounce. There is a charge for purchasing a money order. You can get these through post office and local merchants. 20

Other Types of Checks A certified check is a personal check that the bank guarantees or certifies to be good. A certified check is a personal check that the bank guarantees or certifies to be good. Sometimes a payee might want you to get your personal check certified to reduce the risk of accepting your check in payment. Sometimes a payee might want you to get your personal check certified to reduce the risk of accepting your check in payment. A cashier’s check also called a A cashier’s check also called a bank draft is a check written by a bank on its own funds. You can pay for a cashier’s check through a withdrawal for your savings or checking account, or in cash. 20

Bank Fees Bank charge fees to their customers to help cover their operating costs. For example, when a bank grants you a loan, it charges you a loan fee. When the bank acts as a trustee, it charges a fee for this service. Banks also charge non-customers for services such as check cashing. Banks make a lot of money from fees. Overdrafts, NSF checks, balances that fall below the stated minimum, cashiers and certified checks, travelers’ checks, use of other banks’ ATM’s, online bill payment and monthly account servicing. Shop around to find the bank that offers you the best services that you will use at free or the lowest prices. 20

Making a Deposit 1.Your account number 2.Today’s date 3.CASH = Total currency and coin that is to be deposited 1.Your account number 2.Today’s date 3.CASH = Total currency and coin that is to be deposited 1.List deposited checks separately 2.Total Deposit = Cash + Checks 3.Indicate if you want cash back 4.Net Deposit = Total Deposit – Cash back 1.List deposited checks separately 2.Total Deposit = Cash + Checks 3.Indicate if you want cash back 4.Net Deposit = Total Deposit – Cash back 3

Writing a Check 1. Check number 2. Today’s date 3. Payee 4. Amount of the check in numbers **Write as close as possible to **Write as close as possible to the dollar sign so that additional the dollar sign so that additional numbers cannot be added. numbers cannot be added. 1. Check number 2. Today’s date 3. Payee 4. Amount of the check in numbers **Write as close as possible to **Write as close as possible to the dollar sign so that additional the dollar sign so that additional numbers cannot be added. numbers cannot be added. 5. Amount of the check in words **Start at the left edge of the **Start at the left edge of the line directly below “pay to the line directly below “pay to the order of.” Draw a line between order of.” Draw a line between the amount and the word “dollars.” the amount and the word “dollars.” 6.Your signature 7. Reminder of what the check paid 8. Your account number 5. Amount of the check in words **Start at the left edge of the **Start at the left edge of the line directly below “pay to the line directly below “pay to the order of.” Draw a line between order of.” Draw a line between the amount and the word “dollars.” the amount and the word “dollars.” 6.Your signature 7. Reminder of what the check paid 8. Your account number **Never use pencil 10

Debit Cards Money comes from checking account Money comes from checking account Also called ATM or Electronic Funds Transfer (ETF) Also called ATM or Electronic Funds Transfer (ETF) Make purchases anywhere that accepts Visa® or Mastercard® Make purchases anywhere that accepts Visa® or Mastercard® Get cash at ATMs all over the world Get cash at ATMs all over the world Make Internet and telephone purchases Make Internet and telephone purchases Get cash back at participating stores Get cash back at participating stores Money comes from checking account Money comes from checking account Also called ATM or Electronic Funds Transfer (ETF) Also called ATM or Electronic Funds Transfer (ETF) Make purchases anywhere that accepts Visa® or Mastercard® Make purchases anywhere that accepts Visa® or Mastercard® Get cash at ATMs all over the world Get cash at ATMs all over the world Make Internet and telephone purchases Make Internet and telephone purchases Get cash back at participating stores Get cash back at participating stores 5

Check Cards Enter PIN Enter PIN  Swipe card  Choose debit  Enter your PIN Sign the Receipt Sign the Receipt Swipe card Swipe card Choose credit Choose credit Sign the receipt Sign the receipt Two ways to make purchases: 6

ATM & PIN What is an ATM? What is an ATM?  Automated Teller Machine  Make transactions without human interaction  Withdrawals, deposits, money transfers, balance inquiries, and check imaging What is a PIN? What is a PIN?  Personal Identification Number  4-digit number used to access various accounts  Able to change PIN at most ATMs 7

Using the ATM Available 24/7 Available 24/7 ATM transactions are usually free at your bank’s ATMs ATM transactions are usually free at your bank’s ATMs Service fees for non- customers at most ATMs Service fees for non- customers at most ATMs Watch for higher ATM fees at some places Watch for higher ATM fees at some places  Convenience Stores  Casinos ATMs show the available balance which may be different from your actual balance ATMs show the available balance which may be different from your actual balance Be sure to record all transactions, withdrawals, and fees in account register Be sure to record all transactions, withdrawals, and fees in account register 8

Card & Pin Safety Card Safety Card Safety Always sign the back Always sign the back Never let anyone use card Never let anyone use card Be sure to get it back after each use Be sure to get it back after each use Keep receipts of all transactions Keep receipts of all transactions Do not carry extra credit cards or SSN card in wallet Do not carry extra credit cards or SSN card in wallet Immediately report lost or stolen cards Immediately report lost or stolen cards Pin Safety Pin Safety Never tell anyone your PIN Guard PIN at ATMS and cash registers Guard PIN at ATMS and cash registers Never write PIN anywhere in purse or wallet Never write PIN anywhere in purse or wallet Banks never ask for check card PIN Banks never ask for check card PIN 9

Account Register 1. Check number or transaction type 2. Date the transaction was made 3. Payee and memo 4. Amount of the transaction **New Balance = Previous Balance – Amount of Transaction **New Balance = Previous Balance – Amount of Transaction 5. Amount of the deposit **New Balance = Previous Balance + Amount of Deposit **Record all transactions when made 4

Savings and Money Market Accounts What is a Savings Account? What is a Savings Account?  Interest-bearing account  Used to save money  Minimum balance required  Limited number of withdrawals What is a Money Market Deposit Account? What is a Money Market Deposit Account?  Interest-bearing account  Limited check writing  Requires a higher minimum balance  Most banks charge fees on these accounts if the balance goes below a specified level 13

Sample Bank Service Rates