Financial Literacy Program 1 Banking Basics 2 DefinitionsTerms

Financial Literacy Program 1

Banking Basics 2

Definitions/Terms Transaction: anytime money is exchanged, spent or earned/deposited Debit: money owed or spent Credit: money earned or gained, deposited Balance: total or difference after debit and credit transactions are added and subtracted Register: sheet that helps keep records of financial activities 3

Definitions/Terms Statement: record that shows all transactions for one month Interest: money your account earns just for keeping money in your savings account Budget: a plan for saving and spending money 4

Types of Banking Accounts A checking account lets you deposit your checks and secure your money. A savings account will pay you a certain amount of interest depending on the bank’s interest rates. Automated services for direct deposits, and electronic bill paying, prevents unnecessary trips to the bank and prevents late payments Most banks offer debit card(s) linked to your checking account free of charge. 5

Banking Fees Monthly service fees may apply Minimum balance may be required Transaction restrictions Overdraft / Overdraft protection fee – if an overdraft is paid it will cost you. ATM fees may apply 6

Before you open an account: Shop for the best services and convenience Online Banking Physical location Overdraft protection plans Understand the terms of the account Minimum balance Cost for transactions 7

What banking activities do you have currently? Paycheck Phone and utilities Medical Debts Co-pays Tickets or court fees Savings Account Family expenses 8

What strategies do you use to address your banking needs? Keep Pay a register bills Phone, Make medical co-pays Purchases Coffee, sporting events, dinner, and hobby supplies 9

Online Banking is becoming more and more “paperless” More people use online banking to set up automatic bill pay and to check and track their spending from their computer (online banking) or phone (mobile banking). Online banking provides tools for planning and balancing your budget 10

When Opening an Account Valid photo ID: You may bring driver’s license, state issued identification, passport, or foreign government identification card. Taxpayer Information: You may bring your social security number or individual taxpayer identification number. Personal Information: Your address, phone number, date of birth, and mother’s maiden name. Deposit: Check or cash for your first deposit usually a minimum of $25 - $100 11

What to Expect? “In a typical account application process, the bank uses your name and Social Security number to conduct a routine financial background check. The very first step in this background check is usually taking a look at your Chex. Systems report. A bank may reject your application if there are negative hits that are recent, outstanding or seem to reflect bad financial habits. ” 12

Chex. Systems the "Other" Report Chex. Systems report reveals any bad consumer banking history such as outstanding overdrafts or bad checks you have written. Other information reported includes: Bounced The checks number of financial institution inquiries Instances Unpaid of check fraud and identity theft/fraud negative balances Excessive withdrawals 13

Chex. Systems the "Other" Report Like a credit report, you can request one free report each year. It's a good idea to review the information to make sure everything is correct. Information will remain on this report. Here is the information for you to contact Chexsystems: https: //www. chexsystems. com 14