Fall 2010

Financial Literacy Education II: Bank Services

Fall 2010

Online Version for Program Course Credit 2010-11

Page 2

Goals for This Meeting

Budgeting

Benefits of Banking

Savings Accounts (Opening an Account, Interest, Tips)

Checking Accounts (Parts of a Check, Filling out a Check,

Check Register)

Using a Debit/ATM Card and ATM Machine

Avoiding Bank Fees

Online Banking

Page 3

Group Agreements

Commitment to Glow Foundation’s program

Be prompt and prepared for all Glow sessions (including

HW items)

Reach out for help when needed

Respond promptly to emails or phone calls

Share the information learned with family and peers

Be respectful (one mic)/confidentiality

Accountable for myself and the group success

What is said in Glow stays in Glow

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Benefits of a Bank

Spend 2 minutes writing the answers to the following:

1. Why would someone decide to open a bank account?

2. What are some benefits of a bank?

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Benefits of a Bank

1. Safety

2. Convenience

3. Saves Money

4. Security (FDIC insured)

5. Advice of Banking Professionals

6. Bill Payment Services

Page 6

Savings Account Basics

What is a Savings Account?

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Savings Account Basics

Regular Savings Money Market Certificate of Deposit (CDs)

MinimumBalance

Usually a minimum balance

Usually a minimum balance of at least $1000

Requires a minimum amount – depends on the bank

InterestRate

Low interest rates (variable)

Usually pays more interest than regular savings (variable)

Higher interest rate than a regular savings account (usually fixed)

Withdrawals/

Accessibility

Sometimes a limited number of withdrawals – sometimes charged a fee

Usually can make limited amount of withdrawals with checks

No withdrawals - will be penalized if you withdraw money before specified date

Insured Yes Not always Yes

Types of Savings Accounts

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Money Saving Tips

How can you save more money NOW?

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Money Saving Tips

1. Use coupons/buy things on sale

2. Use direct deposit

3. Carry your savings goals in your wallet

4. Buy used items (e.g. books, DVDs, etc.)

5. Use a rewards card

6. Bring a lunch instead of eating out

7. Ask yourself “Is this something I need?”

8. Store your change in a jar

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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.

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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

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Checking Account Basics

What is a Checking Account?

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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

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Undocumented Students

Forms of ID that can be used to open a bank account (need 2 forms of ID- at least 1 government issued)

Non U.S. Passport Consular ID (Matricula Consular) Employee Photo ID Student Photo ID (college/trade school) Foreign Driver's License, Birth certificate

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Checking Account Basics

Handout:

Parts of a Check

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Checking Account Basics

Handout:

How to Write a Check

Page 17

Tracking Your Spending

Handout:

Parts of a Check Register

Page 18

Checking Account Basics

Handout:

How to Endorse a Check

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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

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ATM/Debit Cards

What’s the difference between an ATM and debit

card?

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ATM/Debit Cards

ATM Cards are used to: Deposit, withdraw, or transfer money

Debit cards can do this in addition to: Purchasing items

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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)

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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 available balance 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!

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Common Bank Fees

1. Overdraft Fee

2. Extended Overdrawn Balance Charge (EOBC)

3. Foreign ATM Fee

4. Monthly Service Charge

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Online Banking

Online Banking Allows You to:

Direct DepositTransfer Money Between Your AccountsTransfer Money to a Third PartyMake Regular Transactions/Automatic Bill PayAccess Online Banking AssistanceAccess Budgeting and Money Management Tools

Page 26

Recap

Budgeting

Benefits of Banking

Savings Accounts (Opening an Account, Interest, Tips)

Checking Accounts (Parts of a Check, Filling out a Check,

Check Register)

Using a Debit/ATM Card and ATM Machine

Avoiding Bank Fees

Online Banking

Page 27

Homework:

Do some research around credit and

credit cards including watching

commercials –

What are the key things to know

before getting a credit card?

(15-30 minutes)