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Updated Sessions 16, 17 & 18
Transcript of Updated Sessions 16, 17 & 18
To open an account you will need:
How to use a savings account
You can make a deposit 4 different ways:
Can withdraw 2 different ways:
1. Go to a teller at a bank and fill out a withdrawal slip
2. Withdraw it from an ATM
How to Fill out a Deposit Slip
Things to consider about Savings Accounts
When choosing a savings account, you will need to consider the different locations a bank has, hours of operation, fees, minimum required balances, accessibility of money, interest rates and how often interest is paid.
Financial Literacy Section 2
Sessions 16, 17 & 18
A Photo Id
Social security number
Proof of address (usually a bill or piece of mail or your ID will work)
Initial deposit money
Using My Account
Why should I open a checking account?
Keeps money safe
Things to consider about Checking Accounts
There are several types of checking accounts and you should consider the locations a bank offers, hours of operation, age restrictions, convenience of accounts, fees on the account, opening and minimum required balances.
How to use a Checking Account
Check: Sign the back and bring into branch.
Bank may hold amount for the check until it clears.
Use direct deposit
Use debit card to access money from the checking account at an ATM
Make sure you record activity to keep track of your account balance.
Different Components to Writing a Check
Handout 3a & 3b-Visuals 1a - 1j
Always use a pen (permanent ink)
Draw a wavy line through blank spaces so no one can change the information.
If you need to rewrite a check write a big X and write "void" on it and tear it up or shred your voided check.
It is illegal to post date a check (write a check for a later date)
Never give someone a check you have signed but not filled out the dollar amount
Always use a legible signature since its harder to forge.
Automatic Teller Machines (ATMs)
Direct Deposit: funds deposited into account directly without paper money changing hands.
Pay By Phone
E-Banking allows you to:
1. Have access to your bank account information 24/7
2. See if checks and deposits have cleared
3. Print copies of checks that have cleared
4. Transfer funds yourself between accounts
5. Pay bills
6. Request stop payments
7. Search history of transactions by type, amount or date.
E-Banking is a broad term that describes various forms of electronic fund transfers using computers and electronic technology as substitutes for checks and other paper transactions.
The E-Banking Experience
The E-Banking Experience
Handouts 3a & 3b
1. When comparing Lisa's e-statement to her checkbook register, did Lisa record all of the transactions in her checkbook register that appear on her statement?
2. What was Lisa's checking account balance on her e-statement and in her checkbook register?
5. Was Lisa charged any service fees for her checking account?
6. Give an example of when a check was directly debited from Lisa's checking account
7. When looking at Lisa's e-statement, did she have any money transferred into or out of her account?
8. Did Lisa record her gym membership in her checkbook register?
What is Credit?
Credit is a financial tool that provides the opportunity to get something now and pay for it later.
You can borrow money from a lender with the promise to pay it back, usually with interest, based on a signed, legal and binding contract.
Reasons for Credit
Convenience: The ability to make hotel reservations or purchase new things online or over the phone.
Accessing emergency funds for unforeseen expenses
Consolidating bills into one payment
Having a record of purchases
To establish a credit history so one can qualify for large forms of in the future
Having the use of things now that one could not otherwise afford (e.g. a car or house)
Safety--Not having to carry large amounts of cash
Disadvantages of Credit
Temptation to overspend
Damage to credit history not used responsibly
Debt commits more income you haven't yet earned.
Fees (annual fee, finance charge, penalty fees, origination fee = fee for setting up loan.
Credit card can be lost (subject to fraud.)
What is a credit score?
How to Protect a Credit Card
-Never lend it to anyone
-Never leave receipts lying around
-Keep the card in sight during the transaction and make sure you get the correct card back.
- Sign the card in ink as soon as you get it.
Warning signs of Credit Trouble:
Being able to pay only the minimum due each month.
Needing to use credit cards to pay for daily expenses.
Borrowing more $ to pay existing debts
Unable to pay my bills on time
Applying for new credit cards while having balances on existing cards
Being contacted by collectors or collection agencies
Spending up to the credit limit
Having no savings for emergencies
Not knowing how much is owed and being afraid to open monthly statement
Feeling uncomfortable or stressed about the amount of money that is owed.
When should you charge?
Activity 1- Handouts 1a and 1b
What affects credit card costs?
Handout 4a & ab
Ways to minimize credit costs:
1. Shop for the lowest annual percentage rate (APR)
2. Borrow only the amount that can be realistically repaid
3. Pay more than the minimum monthly payment
4. Pay cash whenever possible
5. Take out a loan for the shortest time possible
6. Pay bills on time
Steps to Obtaining Credit:
The lender determines if they should give you money based on these things:
Trustworthiness to to repay debt (e.g. pay bills on time, have ever filed for bankruptcy, live within one's means, ever used credit before?)
Income and assets to use if debt is not repaid (e.g. what do you own, owe and what money do you have other than wages)
Ability to repay debt (e.g. salary, occupation, job security, other sources of income.)
Consequences of Bad Debt
Negatively impact the chances to qualify for future credit
Negatively impact finding a place to live
Be an employer's deciding factor for turning an individual down for a job or advancement (some employers run credit checks for certain jobs
Result in bankruptcy
Your money can earn interest
Helps develop financial goals
Eliminates check cashing fees
Can be a reference for future landlords, utility companies, loan application, etc.
Eliminates check cashing fees
Won't need to carry around large amount of cash
A way to pay bills
Checks are a good record of payment and can help keep track of spending habits
Depositing a paycheck by direct deposit can eliminate trips to the bank
Interest can be earned on some checking accounts
Tips for Check Writing:
3. Did Lisa record ATM fees in her checkbook?
4. Name one transaction Lisa did not record in her checkbook register when she use her debit card.
1. Go to a branch and give money to a teller
2. Deposit money into a ATM
3. Drop money into a financial institutions box
4. Mail the deposit money
-Cut up old cards
-Carry only 1-2 cards
-Keep a list of all credit card #'s in a safe place with the expiration date, phone number and address of credit card company.
-Give card numbers over the phone ONLY with companies that are highly reputable.
-Report lost or stolen cards immediately.
-Be sure purchases over the internet are private (look for the key sign.)
This presentation is intended only for the supervised educational purposes of participants in the PREP program and may not be suitable for any other purpose.
Ohio PREP Region 9
Personal Computer Banking
Point-of-Sale Transactions (POS)
Electronic Check Conversion
Pre-Authorized Payments: Money is withdrawn on a specific day that you authorize and deposited in another account.