• • • • • • • Activity 1………….Why Do You Need A Bank? Activity 2………The Many Services of a Bank Activity 3….The ABCs of a Checking Account Activity 4……….Opening a Checking Account Activity 5………………….How to Write a Check Activity 6… Maintaining a Checking Account Activity 7……The ABCs of a Savings Account ACTIVITY Why Do You Need a Bank? Overview • Purposes of banks • The differences between banks and credit unions • Safety of financial institutions • Banks as money management tools • The Earned Income Tax Credit Basic Banking Services - Activity SAFETY OF FINANCIAL INSTITUTIONS COMMERCIAL BANKS CREDIT UNIONS Slide – Safety of Financial Institutions Lesson Reference: Basic Banking Services, Activity – Overhead THE EARNED INCOME TAX CREDIT The Earned Income Tax Credit (EITC) is a federal income tax credit for lowincome workers The credit reduces the amount of tax an individual owes, and may be returned to the taxpayer in the form of a refund Some states offer additional forms of EITC Eligible workers must have an annual income and investment income that falls below a certain level In tax year 2005, for example, if you are married, have two or more children, and are filing your taxes jointly, your combined annual income must not exceed $37,263 You must have a Social Security Number to receive the EITC In tax year 2005, a family with two or more children could receive up to a $4,400 refund through the EITC.* Slide – EITC Lesson Reference: Basic Banking Services, Activity – Handout ACTIVITY The Many Services of a Bank Overview • • • • Financial services provided by a bank Bank employees Services that might be of personal benefit The impact of state and federal regulations upon the security of a bank Basic Banking Services - Activity REMITTANCE OPTIONS TO SEND AND RECEIVE MONEY Money Transfer Organizations Bank Transfers Hand Delivery Mail Hawala Post Offices Stored Value Cards Slide – Remittance Options Lesson Reference: Basic Banking Services, Activity - Overhead BANK OCCUPATIONS • • • • • Tellers Platform Bankers Mortgage Lenders Operations Manager Branch Manager Slide – Bank Occupations Lesson Reference: Basic Banking Services, Activity – Overhead ELECTRONIC BANK SERVICES Online banking is the fastest growing Internet activity in the U.S Types of Services • Bank Cards • Automated Services Protect Your Passwords! Slide - Electronic Bank Services Lesson Reference: Basic Banking Services, Activity – Overhead BANK CARD TYPES TYPE • Check Cards or ATM/Debit Cards DESCRIPTION • • Bank cards with preset, limited value • Used to pay for goods and services • Alternative to cash • Bank cards that allow for the payment of goods and services to be subtracted directly from a bank deposit account • Can be used with merchants that take major credit cards—known as point of sale (POS) transactions Slide - Bank Card Types Lesson Reference: Basic Banking Services, Activity – Overhead ELECTRONIC BANK SERVICES • • • • • • 10 Direct Deposit Transfers between Accounts Transfers to a Third Party Online Banking Bank by Phone ATM Slide – Electronic Bank Services Lesson Reference: Basic Banking Services, Activity – Handout SIGNATURE AUTHORIZATION CARD 20 Slide – Signature Authorization Card Lesson Reference: Basic Banking Services, Activity – Handout ACTIVITY How to Write a Check 21 Basic Banking Services - Activity WRITING A CHECK 22 Slide - Writing a Check Lesson Reference: Basic Banking Services, Activity – Handout ACTIVITY Maintaining a Checking Account Overview • • • • • • 23 Check 21 Keeping a check register Making a deposit into a checking account Reconciling a bank statement Maintaining a checking account Avoiding Overdrafts Basic Banking Services - Activity CHECK 21 Check 21 is a federal law that helps banks handle more checks electronically and that makes check processing faster and more efficient Under this law, a check deposited in a bank is typically “delivered” overnight to the paying bank and deducted from the checkwriter’s account on the next business day Money may be deducted from your checking account almost immediately 24 Slide – Check 21 Lesson Reference: Basic Banking Services, Activity – Handout KEEPING A CHECK REGISTER 25 Slide - Keeping a Check Register Lesson Reference: Basic Banking Services, Activity – Handout MAKING A DEPOSIT - ENDORSING A CHECK The Back Side of a Check Restrictive Endorsement (most secure) Blank Endorsement (least secure) 26 Endorsement to a third party Slide - Making a Deposit - Endorsing a Check Lesson Reference: Basic Banking Services, Activity – Handout MAKING A DEPOSIT COMPLETING A DEPOSIT SLIP 27 Slide - Making a Deposit - Completing a Deposit Slip Lesson Reference: Basic Banking Services, Activity – Handout RECONCILING A BANK STATEMENT 28 Slide - Reconciling a Bank Statement Lesson Reference: Basic Banking Services, Activity – Handout OVERDRAFTS AND BOUNCED CHECKS Overdrafts and bounced checks occur when you complete a financial transaction (e.g., write a check) 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 checking account 29 Slide – Overdrafts and Bounced Checks Lesson Reference: Basic Banking Services, Activity – Overhead ACTIVITY The ABCs of a Savings Account Overview • • • • 30 Purpose of a savings account Shopping for a savings account Applying for a savings account Monthly bank statement checkup Basic Banking Services - Activity REASONS TO SAVE • Emergencies • Future Purchases • Future Investments 31 Slide - Reasons to Save Lesson Reference: Basic Banking Services, Activity – Overhead SHOPPING FOR A SAVINGS ACCOUNT Factors to consider: • • • • • • • • • 32 Safety Risk Liquidity Minimum Account Balance Requirements Fees and Service Charges Interest Rate Returns (Earnings) Automatic Transfer Direct Deposit Slide - Shopping for a Savings Account Lesson Reference: Basic Banking Services, Activity – Overhead OPENING A SAVINGS ACCOUNT 33 Slide – Opening a Savings Account Lesson Reference: Basic Banking Services, Activity – Overhead BANK STATEMENT 34 Slide – Bank Statement Lesson Reference: Basic Banking Services, Activity – Overhead