Financial Services

Basic Banking Services - Activity 2• Services that might be of personal benefit • The impact of state and federal regulations upon the security of a bank 5... ELECTRONIC BANK SERVICESOnl

• Activity 1………….Why Do You Need A Bank?

Basic Banking Services - Activity 1

ACTIVITY 1

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 2

SAFETY OF FINANCIAL INSTITUTIONS COMMERCIAL BANKS CREDIT UNIONS

Slide 1 – Safety of Financial Institutions Lesson Reference: Basic Banking Services, Activity 1 – Overhead 3

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THE EARNED INCOME TAX CREDIT

The Earned Income Tax Credit (EITC) is a federal income tax credit for

low-income 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 2 – EITC Lesson Reference: Basic Banking Services, Activity 1 – Handout 2

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Basic Banking Services - Activity 2

• Services that might be of personal benefit

• The impact of state and federal regulations upon the security of a bank

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REMITTANCE OPTIONS

TO SEND AND RECEIVE MONEY

1 Money Transfer Organizations

7 Stored Value Cards

Slide 1 – Remittance Options Lesson Reference: Basic Banking Services, Activity 2 - Overhead 1

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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 3 - Electronic Bank Services Lesson Reference: Basic Banking Services, Activity 2 – Overhead 3

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BANK CARD TYPES

Slide 4 - Bank Card Types Lesson Reference: Basic Banking Services, Activity 2 – Overhead 4

• 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.

• Bank cards with preset, limited value

• Used to pay for goods and services.

• Alternative to cash.

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ELECTRONIC BANK SERVICES

• Direct Deposit

• Transfers between Accounts

• Transfers to a Third Party

REGULATION OF ELECTRONIC

BANKING SERVICES

Electronic Fund Transfer Act

Protects consumers using any type of electronic banking from loss and protects their privacy.

Customers are responsible to report any errors.

Slide 6 - Regulation of Electronic Banking Lesson Reference: Basic Banking Services, Activity 2 – Overhead 5

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Basic Banking Services - Activity 3

ACTIVITY 3

The ABCs of a Checking Account

Overview

• Purposes of a checking account

• Shopping for and comparing checking accounts

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Slide 1 - Checking Account Terms Lesson Reference: Basic Banking Services, Activity 3 – Handout 1

CHECKING ACCOUNT TERMS

• Overdraft

• Overdraft Protection

• Payee

• Reconciling a Bank Statement

• Transaction Limits

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Slide 2 - Shopping Around Lesson Reference: Basic Banking Services, Activity 3 - Handout 2

CHECKING

ACCOUNT)

SERVICES Location of bank Location of ATMs Banking hours Minimum balance required Minimum transactions or limits Interest-bearing accounts?

Other

COSTS Non-primary bank ATM transactions In-branch transaction fees

Per-check fees Other checking fees Overdraft protection Printing of checks 14

Basic Banking Services - Activity 4

• The Signature Authorization Card

• The PATRIOT Act 15

Slide 1 – Opening a Checking Account Lesson Reference: Basic Banking Services, Activity 4 – Handout 1

OPENING A CHECKING ACCOUNT

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Slide 2 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2

Primary ID*

• Photo Driver’s License issued within the U.S or Canada

• State Non-Driver Photo ID

• Photo Learner’s Permit

* Financial institutions' ID requirements may differ; check with the institution first before applying for an account.

COMMONLY ACCEPTED FORMS OF ID

• Naturalization Certificate

• Employee Photo ID (from a recognizable employer)

• Photo Trade License (barber, plumber, electrician, etc.)

• Student Photo ID (college/trade school)

• Medicare Card (must be 65 or older)

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Slide 3 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2

* Financial institutions' ID requirements may differ; check with the institution first before applying for an account.

COMMONLY ACCEPTED FORMS OF ID

• Foreign Driver’s License

• State/Local Gun Permit

• Utility Bill (Name and address

of individual account should

be listed)

• Current Bank Statement

• National Credit Card

• Bank-issued Debit or Check Card

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THE PATRIOT ACT

Congress passed the PATRIOT Act in response to the terrorist

attacks of September 11, 2001 Financial institutions are now

required to collect certain information when a new account is

opened

Slide 4 – The PATRIOT Act Lesson Reference: Basic Banking Services, Activity 4 – Overhead 1

1 The customer must provide identification that includes

name, date of birth, address, and identification number.

2 The institution must maintain a copy of the information used

to verify the person’s identity.

3 The institution must determine whether the applicant

appears on the lists of known or suspected terrorists or terrorist organizations.

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Slide 5 – Signature Authorization Card Lesson Reference: Basic Banking Services, Activity 4 – Handout 3

SIGNATURE AUTHORIZATION CARD

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Basic Banking Services - Activity 5

ACTIVITY 5

How to Write a Check

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Slide 1 - Writing a Check Lesson Reference: Basic Banking Services, Activity 5 – Handout 1

WRITING A CHECK

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Basic Banking Services - Activity 6

ACTIVITY 6

Maintaining a Checking Account

Overview

• Check 21

• Keeping a check register

• Making a deposit into a checking account

• Reconciling a bank statement

• Maintaining a checking account

• Avoiding Overdrafts 23

Slide 1 – Check 21 Lesson Reference: Basic Banking Services, Activity 6 – Handout 1

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

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KEEPING A CHECK REGISTER

Slide 2 - Keeping a Check Register Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

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Slide 3 - Making a Deposit - Endorsing a Check Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

MAKING A DEPOSIT - ENDORSING A CHECK

Restrictive Endorsement (most secure)

Blank Endorsement

(least secure) Endorsement to a third party

The Back Side of a Check

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Slide 4 - Making a Deposit - Completing a Deposit Slip Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

MAKING A DEPOSIT - COMPLETING A DEPOSIT SLIP

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Slide 5 - Reconciling a Bank Statement Lesson Reference: Basic Banking Services, Activity 6 – Handout 2

RECONCILING A BANK STATEMENT

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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.

Slide 6 – Overdrafts and Bounced Checks Lesson Reference: Basic Banking Services, Activity 6 – Overhead 1

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Basic Banking Services - Activity 7

ACTIVITY 7

The ABCs of a Savings Account

Overview

• Purpose of a savings account

• Shopping for a savings account

• Applying for a savings account

• Monthly bank statement checkup

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SHOPPING FOR A SAVINGS ACCOUNT

Factors to consider:

• Safety

• Risk

• Liquidity

• Minimum Account Balance Requirements

• Fees and Service Charges

OPENING A SAVINGS ACCOUNT

Slide 3 – Opening a Savings Account Lesson Reference: Basic Banking Services, Activity 7 – Overhead 3

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Slide 4 – Bank Statement Lesson Reference: Basic Banking Services, Activity 7 – Overhead 4

BANK STATEMENT

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