Benefits of Banks: Opening and Managing Savings and Checking Accounts Glow Foundation 2010
Benefits of Banks: Opening and Managing Savings and Checking Accounts Glow Foundation 2010.
Dec 16, 2015
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Benefits of Banks: Opening and Managing Savings and Checking
Accounts
Glow Foundation2010
Page 2
Icebreaker!
Page 3
Group Agreements
Page 4
Pre-Assessment
(30 minutes)
Page 5
What We Will Discuss Today
Benefits of Banking
Savings Accounts (Opening an Account, Interest,
Tips)
Checking Accounts (Parts of a Check, Filling out a
Check and Deposit Slip)
Using a Debit / ATM Card
Tracking Your Spending
Protect Yourself from Fraud!
Page 6
Benefits of a Bank
DISCUSSION:
1. Why would someone decide to open a bank account?
2. What are some benefits of a bank?
Page 7
Benefits of a Bank
1. Safety (theft, fire, etc.)
2. Convenience
3. Saves Money (avoids check cashing fees)
4. Security (FDIC insured)
5. Advice of Banking Professionals
Page 8
Savings Account Basics
What is a Savings Account?
Page 9
Savings Account BasicsRegular Savings Money Market Certificate of Deposit
(CDs)
Minimum Balance Usually a minimum balance of at least $1000
Deposit a certain amount of money – requires a minimum amount
Low Interest rates - variable
Usually pays more interest than regular savings (variable)
Higher interest rate than a regular savings account (usually fixed)
Limited number of withdrawals – sometimes charged a fee
Usually can make limited amount of withdrawals with checks - convenient
No withdrawals - will be penalized if you withdraw money before specified date
Readily accessible No minimum length of time to have money deposited
Requires money to be deposited for a certain amount of time
Insured Not always insured Insured
Page 10
Savings Account Basics
Financial Feud
Page 11
Savings Account Basics
What should you consider before opening up a savings account?
How Frequently Interest is Compounded (25)
Minimum Balance (15)
Service Fees (9)
Convenience (6)
Interest Rate (45)1
2
3
4
5
Page 12
Savings Account Basics
What is Compound Interest?
Quarter Amount in Account
Interest Total amount
1 $1000.00 1.25% ($1000*.0125) + 1000 = $1012.50
2 1012.50 1.25% (1012.50*.0125) + 1012.50 = 1025.16
3 1025.16 1.25% (1025.16*.0125) + 1025.16 = 1037.97
4 1037.97 1.25% (1037.97*.0125) + 1037.97 = 1050.94
Page 13
Saving Account Basics
Compare the Results:
Shoebox Saver Super Saver
Year 1 $1825 $1871 ($46 more!)
Year 5 $9125 $10,366 (+$1,241)
Year 10 $18,250 $23,677 (+$5,427)
Year 30 $54,750 $127,077 (+$72,327)
Each person saved $5 a day and the Super Saver earned 5% interest compounded daily.
Page 14
Savings Account Basics
Some tips to SAVE MORE MONEY:
Ask yourself, “Do I NEED this?” Pay YOURSELF first before you spend any money If you get money as a gift or a bonus, save a portion
of it Save spare change and deposit it Pay bills on time Avoid check cashing stores Take lunch with you instead of eating out Carry small amounts of cash with you Use direct deposit Others?
Page 15
Individual Development Account Matched Savings Account for your College Education -
for every $1 you save, receive $2 in matched funds up to $6,000!!
Enroll after the completion of Glow’s Financial Education Program
To be eligible, you must meet income restrictions, have a SSN or ITIN, be able to save a minimum of $20 a month.
Page 16
Checking Account Basics
What is a Checking Account?
Page 17
Checking Account Basics
Checking Accounts:
Keep your money safe and accessible Help control your spending Don’t pay interest May require you to keep a minimum
balance or do direct deposit (to avoid fees)
Checks function like cash
Page 18
Checking Account Basics
Handout:
The Parts of a Check
Page 19
Checking Account Basics
Handout:
How to Write a Check
Page 20
Checking Account Basics
Check-Writing Tips:
Always write in blue or black ink Write neatly Save your receipts and record your spending in
your register Initial your (small) mistakes / VOID checks with
large mistakes Avoid writing “bad” checks - you will get fined
and it’s against the law in some cases
Page 21
Checking Account Basics
Handout:
How to Endorse a Check
Page 22
Checking Account Basics
Handout:
How to Fill In a Deposit Slip
Page 23
ATM / Debit Cards
What’s the difference between an ATM and debit
card?
Page 24
ATM / Debit Cards
ATM Cards are used to: Deposit, withdraw, or transfer money
Debit cards can do this in addition to: Purchasing items Online banking – pay your bills, check account
balances
Page 25
ATM / Debit Cards
What information is on your ATM / debit card?
(If you have a debit card, you can examine it as we look at the parts of a debit card)
Page 26
ATM / Debit Cards
Using an ATM Machine
Page 27
ATM / Debit Cards
ATM / Debit Card Tips:
You may be charged a fee if you use an ATM that is operated by another bank
Know your balance available Be aware of what you’re buying - it’s easier to
spend more with plastic! Be careful with your Personal Identification
Number (PIN) – Never write it on your card Avoid magnets – they can de-magnetize your card Contact your bank if your card is lost or stolen!
Page 28
Tracking Your Spending
What are some ways to track your spending and control the
money you have?
Page 29
Tracking Your Spending
1. Save your receipts
2. Record transactions
3. Avoid over-spending
4. Review statements
5. Compare with the bank
Page 30
Tracking Your Spending
Handout:
Parts of a Check Register
Page 31
Tracking Your Spending
What happens if you spend more money than you have in your
account?
Page 32
Protect Yourself From Fraud
Breakout:
Being Safe at Home and Online
Page 33
Recap
Benefits of Banking
Savings Accounts (Opening an Account, Interest,
Tips)
Checking Accounts (Parts of a Check, Filling out a
Check and Deposit Slip)
Using a Debit / ATM Card
Tracking Your Spending
Protect Yourself from Fraud!
Page 34
Homework:
Save your receipts for one week
and bring it to the next session
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