1. Banking services & financial services

2. ALTERNATIVE FINANCIAL SERVICES
Cheque-Cashing Services
Cheque-Deferrals, Cash Advances, Payday Loans
Pawn Shops
Rapid Tax Refunds
Rent-to-Own
Other Financial Services
Display “Slide 2: Alternative Financial Services.” Ask participants whether they have used or are familiar with any of these services.
Review the definitions:
• Cheque-Cashing Services
To cash a paycheque or government cheque, these businesses charge a percentage of the amount of the cheque as a fee. For example, cashing a $200 paycheque could cost as much as $8 each week. In a year, that adds up to $416.
• Cheque-Deferrals, Cash Advances, Payday Loans
Whichever name is used, these are considered short-term, high-interest-rate loans. The customer writes a personal cheque, including a fee in the range of 4-8 percent (interest rate for 1-2 weeks). The lender cashes the cheque for the customer and agrees to hold the cheque until the next payday. Oftentimes, the borrower will need to take out additional loans to cover the fees and to make it through to the next payday. This can lead to a vicious cycle of debt that can be difficult to pay off.
• Pawn Shops
Here you can get loans at very high interest for the value of goods, including electronics and jewelry.
• Rapid Tax Refunds
To get your tax refund early from someone you pay to prepare and receive your tax return, you may have to pay a significant portion of your refund for the service.
• Rent-to-Own
Renting items such as home appliances or entertainment systems before buying them from the same business can add up to fees much higher than the cost of using credit to pay for the same items.
• Other Financial Services
Financial services can come in many other forms, as well — prepaid debit cards, title loans, and cheque-cashing services at the grocery store are just a few examples.
If participants have used any of these services, have they thought about how much they pay for them? If they use any unregulated services, have they thought about the potential risks? It is important to learn that these services come at a high price that makes it nearly impossible for their customers to build wealth. Ask them if they can think of other informal services that people in their community use. For example, they may have a neighbor who cashes cheques for a fee. 2
Slide 2 - Alternative Financial Services Lesson Reference: Introduction to Financial Services, Activity 1 – Handout 1

3. FORMAL FINANCIAL SERVICES INFORMAL FINANCIAL SERVICES
Accounts
Credit cards
Loans
Investment vehicles
Direct deposit
Wire transfers/ remittances
INFORMAL
FINANCIAL
SERVICES
Payday lenders
Cheque cashing services
Rent-to-own stores
Pawn shops
Title lenders
Loans from family/friends
Cultural savings clubs
Remittances offered through nonfinancial institutions
Write the terms “formal financial services” and “informal financial services” on the flipchart. Ask participants to describe the difference between formal and informal financial services. After a few examples have been discussed, display “Slide 1: Formal and Informal Financial Services.”
Explain to participants that alternative financial service providers, such as
payday lenders and cheque cashers, operate outside the system of federally
insured financial institutions.
These institutions can be much more expensive and are generally less regulated than traditional financial institutions.
Along those same lines, cultural savings clubs do not have the same
regulations to protect consumers as banks and credit unions, but are very
common in certain communities and have been beneficial to people. be
careful not to pass judgment on these types of services. Rather, explore them as another service that does not provide the same kind of protection as a financial institution. 3
Slide 1 – Formal and Informal Financial Services Lesson Reference: Introduction to Financial Services, Activity 2 – Overhead 1

4. Beware of these high-cost financial services
pawn shops charge very high interest for loans based on the value of tangible assets (such as jewelry or other valuable items).
rent-to-own programs offer an opportunity to obtain home
entertainment systems or appliances for a small weekly fee.
However, the amount paid for the item usually far exceeds the
cost if the item were bought on credit.
cheque-cashing outlets charge high fees (sometimes 2 or 3 percent) just to have a paycheque or government cheque cashed.

5. Payday loan services Paycheque advance
A small short-term loan intended to cover a borrower’s expenses until his or her next payday.
Rules that govern these services.
Ex. In Ontario, the lender cannot charge anymore than $21 for every $100
Rollover loans are not allowed.

6. cheque-deferral services allow consumers to get a cash advance
rapid-refund tax services provide “instant refunds” when you pay to have your federal tax return prepared. However, this “instant refund” is a loan with interest rates as high as 120 percent.
cheque-deferral services allow consumers to get a cash advance
on their next pay cheque. However, these short- term loans are very expensive.
A $200, two-week advance may cost over $30 (with annual costs exceeding $900).

7. Marketplace
/easy-loans-uneasy-money

8. HOW A BANK CAN SAVE YOU MONEY
Monthly Fees without a Bank Monthly Fees with a Bank*
$80 to cash paycheques
$4.16 on money orders and stamps to pay bills
$20 to send money to family with a wire transfer company
Monthly cost: $104.16
Annual cost: $1,249.92
$10 monthly base service charge
$0 to directly deposit paycheque
$0 to get cash from bank's ABMs or make debit card purchase
$0 to pay monthly bills using electronic bill payment
$5 to send money to family
Monthly cost: $15.00
Annual cost: $180.00
Display “Slide 2: How a Bank Can Save You Money.” Walk participants through the example to compare the costs between bank services and alternative financial services.
Go over the example “How a Bank Can Save You Money.” Ask participants to take a few minutes to think about the financial services they currently use. Give them time to list ways they could save money on the cost of financial services.
*Example assumes the bank account is on a basic service plan, incurring minimal account fees.
Now that participants realize how banks can save them money, ask them
whether there are other advantages to establishing a bank account. Write
their responses on a flipchart.
Annual Savings by Using a Bank: $1,069.92 8
Slide 2 – How a Bank Can Save You Money Lesson Reference: Introduction to Financial Services, Activity 2 – Handout 2

9. ADVANTAGES OF ESTABLISHING A BANKING RELATIONSHIP
Nearly everyone needs a bank account to help manage his or her day-to-day money.
Bank accounts can help you to:
• Pay bills
• Manage your money
• Receive money
• Send money to a friend or family member
• Keep your money secure
• Start building wealth
• Earn interest
Use “Slide 3: Advantages of Establishing a Banking Relationship” as a closure and summarize some key reasons why using a bank can be beneficial. 9
Slide 3 – Advantages of a Banking Relationship Lesson Reference: Introduction to Financial Services, Activity 2 – Overhead 2

10. TRADITIONAL SERVICES OF BANKS EXPANDED SERVICES OF BANKS
Chequing Accounts
Savings Accounts
GICs (Guaranteed
Investment Certificates)
Canada Savings Bonds
Loans
Car
Home (mortgages and home equity loans)
Personal
Safe Deposit Boxes
EXPANDED
SERVICES
OF BANKS
Insurance Sales
Small Business Advising and Loans
Investments
Credit Cards
Remittances
Ask if anyone believes that banks have changed over the years in the services they provide. If yes, in what ways have they changed? Responses will vary.
Use “Slide 2: Expanded Services of Banks,” to explain that while
banks once were very basic and traditional in their financial functions (accept money and make loans), they now have an expanded and varied list of services. 10
Slide 2 - Expanded Services of Banks Lesson Reference: Introduction to Financial Services, Activity 3 – Overhead 2

11. AUTOMATED BANK SERVICES
• Direct Deposit
• Transfers between Accounts
• Transfers to a Third Party
• Online Banking
• Bank by Phone
• ABM
Review slide terms:
Direct Deposit
• Payments from third party into bank accounts for paycheques, Old Age Security, Canada Pension, etc.
Transfers between Accounts
• Automatic transfer of money from one account to another, such as from a chequing account to a savings account.
• Occur on a designated date of month.
Transfers to a Third Party
• Automatic payments of variety of bills directly from a bank account, such as automatically paying rent or monthly auto loan payment.
• Account holder receives confirmation.
Online Banking
• Requires computer and Internet access.
• Security = Username + Password.
• Available in real time.
• Allows customers to complete most regular bank transactions.
• Can be used to pay utility and other bills (bill payment).
Bank by Phone
• Provides electronic account access.
• Keypad or voice-activated.
• Requires a Personal Identification Number (PIN) or password access.
• Includes various options.
• Allows review of regular bank transactions.
• Allows one to speak to a bank customer service representative.
• Can be used to pay bills.
ABM
• Automated Banking Machine
• Allows one to obtain cash and conduct banking transactions.
• Allows regular review of bank transactions.
• Requires a Personal Identification Number (PIN). 11
Slide 5 – Automated Bank Services Lesson Reference: Basic Banking Services, Activity 2 – Handout 3

12. AUTOMATED BANK SERVICES
• Direct Deposit
• Transfers between Accounts
• Transfers to a Third Party
• Online Banking
• Bank by Phone
• ABM
Review slide terms:
Direct Deposit
• Payments from third party into bank accounts for paycheques, Old Age Security, Canada Pension, etc.
Transfers between Accounts
• Automatic transfer of money from one account to another, such as from a chequing account to a savings account.
• Occur on a designated date of month.
Transfers to a Third Party
• Automatic payments of variety of bills directly from a bank account, such as automatically paying rent or monthly auto loan payment.
• Account holder receives confirmation.
Online Banking
• Requires computer and Internet access.
• Security = Username + Password.
• Available in real time.
• Allows customers to complete most regular bank transactions.
• Can be used to pay utility and other bills (bill payment).
Bank by Phone
• Provides electronic account access.
• Keypad or voice-activated.
• Requires a Personal Identification Number (PIN) or password access.
• Includes various options.
• Allows review of regular bank transactions.
• Allows one to speak to a bank customer service representative.
• Can be used to pay bills.
ABM
• Automated Banking Machine
• Allows one to obtain cash and conduct banking transactions.
• Allows regular review of bank transactions.
• Requires a Personal Identification Number (PIN). 12
Slide 5 – Automated Bank Services Lesson Reference: Basic Banking Services, Activity 2 – Handout 3

13. COMMONLY ACCEPTED FORMS OF ID
Primary ID*
Driver’s Licence issued in Canada
Canadian passport
Certificate of Canadian Citizenship
Permanent Resident card or Citizenship and Immigration Canada Form IMM 1000, IMM 1442, or IMM 5292
Birth certificate issued in Canada
Social Insurance card
Old Age Security card
Certificate of Indian Status
Provincial health insurance card (except Ontario, Manitoba, and PEI)
Provincial ID card, bearing the individual’s photograph and signature, issued by authorities such as Insurance Corporation of British Columbia, Alberta Registries, Service New Brunswick, etc.
• A major topic to emphasize is proper identification. Acceptable identification may vary among financial institutions, but to open an account, generally you must present two pieces of identification, with one piece bearing a photo.
Review this slide and emphasize that this is a list of commonly accepted forms of primary ID, and that secondary ID is required (reviewed on next slide).
* Financial institutions' ID requirements may differ; check with the institution first before applying for an account. 13
Slide 2 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2

14. COMMONLY ACCEPTED FORMS OF ID
Secondary ID*
Employee photo ID card
Canadian University/ College photo ID card
Canadian bank or ABM/debit card
Canadian credit card
Canadian National Institute for the Blind (CNIB) client card
Foreign passport
•Review this list of commonly accepted forms of secondary ID.
• Be prepared. Call ahead to find out exactly what you will need to open an account and what hours the bank is open.
* Financial institutions' ID requirements may differ; check with the institution first before applying for an account. 14
Slide 3 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2

15. WRITING A CHEQUE
Consider providing copies of this handout, which can be found in the Citi Financial Education Curriculum:
“Basic Banking Services”, p. 49.
Display “Slide 1: Writing a Cheque.”
• Stress that actual cheques should always be written in ink.
• Talk about the process of voiding cheques when one makes a mistake using a pen.
• Include an explanation of transit, cheque, and account numbers listed on the cheque.
CHEQUE NUMBER: The number used to identify a specific cheque within the sequence of the register. Usually three or four digits.
DATE: Include the year, month, and day you are writing the cheque. The new cheque standard requires the date to be entered in one of three pre-printed formats: YYYYMMDD, MMDDYYYY, or DDMMYYYY.
PAYEE: Write the name of the person or business on the line, “Pay to the order of.”
AMOUNT IN NUMBERS: Write the amount of the cheque in numbers. Begin close to the left of the section to prevent anyone from adding additional numbers.
AMOUNT IN WORDS: Write the amount of the cheque in words.
MEMO: Use to note the reason for the cheque. If you are paying a bill, you can also use this space to supply information requested by the company.
SIGNATURE: Sign all cheques the way you sign the signature card.
TRANSIT NUMBER: The hyphenated number that identifies your bank branch and institution number.
ACCOUNT NUMBER: The number used to identify your unique account within a bank.
• Stop frequently and ask if there are any questions. Don’t move forward until you are sure everyone understands the sample cheque. 15
Slide 1 - Writing a Cheque Lesson Reference: Basic Banking Services, Activity 5 – Handout 1

16. OVERDRAFTS AND BOUNCED CHEQUES
Overdrafts and bounced cheques occur when you complete a financial transaction (e.g., write a cheque) for more than what is available in the account. Your financial institution may pay the amount and charge you a fee, known as an “overdraft fee” or a “nonsufficient funds fee.”
Tip: Avoid overdraft or non-sufficient funds fees by making a habit of monitoring the balance in your chequing account.
Display “Slide 5: Overdrafts and Bounced Cheques.” Discuss this
slide, emphasizing the importance of maintaining a chequing account in
order to avoid fees and the possibility of the bank or credit union closing the account. This could make it difficult to open another account in the future.
Example:
A $10 cheque made out to a grocery store bounces and a $30 overdraft fee is charged to cover the cost of the cheque. The total for the amount of the cheque plus the fee is $40. 16
Slide 5 – Overdrafts and Bounced Cheques Lesson Reference: Basic Banking Services, Activity 6 – Overhead 1

17. Basic Banking Services - Activity 7
The ABCs of a Savings Account
Overview
Purpose of a savings account
Shopping for a savings account
Applying for a savings account
Monthly bank statement checkup
Review the topics for discussion in this activity:
• Purpose of a Savings Account
• Shopping for a Savings Account
• Savings Account Application
• Monthly Bank Statement Checkup
Using the flipchart or a blank transparency, ask the participants to share why they save. Write down their reasons. Responses will vary. 17
Basic Banking Services - Activity 7

18. REASONS TO SAVE Emergencies Future Purchases Future Investments 18
Use “Slide 1: Reasons to Save” to summarize the specific reasons that individuals have just provided.
• Refer to the class list. Ask participants to work with you to classify each of their reasons under one of the slide’s headings.
• Be sure everyone understands that saving means not spending — putting aside some amount of current income for future use.
Move forward by asking participants to help you brainstorm different places
where people keep their savings.
• Record the responses. These may include places such as a box, sock,
bottom of a drawer, etc.
• Remind everyone that when saving, people hope that small amounts will grow to a much larger amount.
• Refer to the previously brainstormed list of places where people save and ask the participants to choose which of the areas represent places where their money will actually grow to a larger amount.
• This should be a simple process of showing individuals that saving in a sock or some other hiding place at home does not allow their money to grow.
Remind everyone that one of the simplest ways to save is to have a savings
account at a local bank or other financial institution. 18
Slide 1 - Reasons to Save Lesson Reference: Basic Banking Services, Activity 7 – Overhead 1

19. SHOPPING FOR A SAVINGS ACCOUNT Factors to consider: Safety Risk
Liquidity
Minimum Account Balance Requirements
Fees and Service Charges
Interest Rate
Returns (Earnings)
Automatic Transfer
Direct Deposit
Ask if anyone can tell why a person should save his or her money in a
savings account. These responses should open the discussion for the next
segment on shopping for a savings account.
Ask for a show of hands of participants who have a savings account. If
individuals do not raise their hands, don’t pursue.
Use the flipchart, board, or blank transparency to ask participants what they are looking for when they go “shopping” for a savings account. Record the responses.
Use “Slide 2: Shopping for a Savings Account” to summarize their
earlier individual brainstorming responses. Provide a brief description of each item on the slide. (See Glossary for definitions.) 19
Slide 2 - Shopping for a Savings Account Lesson Reference: Basic Banking Services, Activity 7 – Overhead 2

20. handout
Keeping a running balance
Reading a bank statement

21. Reconciling a chequing account
step 1: Obtain the current balance from your bank statement.
step 2: Add any deposits that you have recorded in your cheque register but that are not on this statement.

22. step 3: Subtract any outstanding cheques (cheques you have written but that have not yet cleared the banking system).
step 4: Compare the result with the current balance in your cheque register.

23. Handout