Transcript Name all of the Banks in the area

Girl stop sign. Lol.
Sun trust
 BB&T
 James River


Make a smart decision on selecting the
right bank.
Name all of the Banks in the area
Banking
Selecting a Bank
Checking account
Savings account
Debit card
Simple Interest
Compound Interest
Other Bank Accounts
Government Agencies
Compare financial institutions in terms of
personal banking needs.
2. Pick one
1.
Select a Savings account, checking
account, interest rate, and/or credit card.
 You can also receive a bank loan or online
services.

Banking



Bank accounts can be
opened by anyone depositing
money into a saving or
checking account. Must
meet minimum balance
requirements.
Most credit unions require
their members to have an
association with them.
For example, a credit union
might only serve those in a
certain profession, or those
living in a certain area.
Banking

In order to have an account
you must present one of the
following:



DL
SS
Birth Certificate



$$$
Signature
Deposit slip




The minimum opening balance is the initial dollar
amount set by the bank that is required to open
a account.
An overdraft fee is a fee that an account holder
pays when withdrawals from a bank account
exceed the available balance causing the account
to have a negative balance.
A fixed interest rate is an interest rate that does
not change for the life time of the account.
A variable interest rate is an interest rate that
can change over the life time of the account.
Banking

ATM◦ Withdrawal from checking account
◦ Easy and convenient
◦ Easy banking

Penalties
◦ Most banks charge hefty fees for using ATMs
belonging to other banks. This fee often applies
twice: your bank will charge you a fee, and the
bank that owns the ATM you used will also
charge a fee.
Banking




Jack plans on using
network ATMs about
4 times per month.
What would be Jack’s
total estimated
annual fees for a
checking account with
direct paycheck
deposit, one overdraft
per year, and no
2nd copies of
statements?
72+32 =
$104
Banking
Checking account
Summarize the process of opening a checking account and making transactions.
Reconcile a checking account given a sample bank statement.
X____________________
Endorse here
Checking Account

Open a checking
account

◦ Must have an
appropriate amount
of money to open the
account.
◦ Sign a register slip
 Recognize signatures
on checks
 Electronic signatures
◦ Select personal
checks to write from
account
Checking Account
When you have that
account open
◦ Make purchases
◦ Deposit cash into the
account
◦ Transfer money in
and out of the
account with online
banking
◦ Sign deposit slips


To reconcile an
account is to
check it against
another set of
records for
agreement.
A check register is
a booklet used to
record account
transactions.

The closing balance
is the balance, after
deductions, in an
account at the end
of a predetermined
period of time.
Checking Account

Money through
checking account

◦ Write a check
◦ Debit card
◦ ATM withdrawals

Is all of this safer
than carrying cash?
◦ Stop, hold, theft,
stolen, lose
Checking Account
Balance or
Reconcile
checkbooks
◦ Look for errors
◦ Look at discrepancies
between online
statement and
checkbook balance
◦ Keep records
Check #
Date
02/03
02/05
Descriptio Payment/ Fee (-)
n of
Debit (-)
Transactio
n
Deposit
Deposit Paycheck
Blue Sky
$455.00
Apartments
Deposit/
Credit (+)
$900.00
$390.36
Balance
$900.00
$1,290.36
201
02/05
202
02/07
Renter’s
Insurance
$125.40
$709.96
203
02/18
Online
Clothing
Purchase
Deposit Paycheck
$155.44
$554.52
02/19
Checking Account
$835.36
$390.36
$944.88

“Balance Brought
forward”

◦ At the end of the month
balances are renewed at
the beginning of each
month

“Outstanding Checks”
◦ Check that didn’t run
through
 No one cashed it
 No one signed the
check
 Bank didn’t accept the
check
Checking Account
Roberta's monthly
bank statement says
that she has a
balance of 386.29,
but Roberta's check
register says that her
balance is 370.77.
Savings account
1.
2.
Summarize the process of opening a savings account and making transactions.
Make inferences into how saving money contributes to financial well-being.

Savings Account:
◦ Savings
◦ Premium Money
Market
◦ Certificates of Deposit
(CDs)
◦ Individual Retirement
Account (IRA)
◦ Health Savings
Account
Savings Account

https://www.pnc.co
m/webapp/unsec/Bl
ank.do?siteArea=/p
nccorp/pnc/home/p
ersonal/savings/sav
ings+overview

a savings account requires a
specific minimum balance.
If your account has a
minimum balance, you must
keep at least that much
money in the account at all
times to avoid being
assessed fees.
 If you keep less money than
the minimum balance in the
account, you will be charged
money on a regular basis
(usually every month) and
will ultimately lose money
rather than gain it.

Savings Account

Open at a bank
◦ Have the right amount
of money
◦ Right Identification




SS card
DL
Passport
Birth Certificate
◦ Look for best
investments
Savings Account

“interest Rate” - the
fee charged by the
bank for the use of
the money when
taking out a loan. It is
also the fee you are
paid by the bank for
letting the bank use
your money.



Once you have a savings
account is can be considered
an emergency fund.
Bank pay you of interest
allowing for them to use your
money to lend to others.

The more money you keep in
your account, the more
money you can add to your
account through interest.

The interest rate depends on
the bank you choose as well
as the type of savings
account you open.
An interest rate of 1% can
earn you $10 per year a
$1,000 savings account.
Savings Account

Transactions
Recorded in a savings
account

Increasing your
savings account
◦ Deposit
◦ Direct Deposit

Deductions
◦ ATM FEES
◦ Withdrawals
Savings Account
What was Art’s total deposit?
a.
b.
c.
d.
$1,701.23
$1,545.83
$1,856.63
$1516.35
Savings Account

You have decided
both to open a
savings account and
to purchase a vehicle.

You would like a
savings account with
the highest interest
rate and a vehicle
loan with a low
interest rate.

Which bank would
you choose?
Savings Account
Using a Debit Card

How to use it
◦ Like a check it
transfers money from
your checking
account or savings.
◦ Doesn’t create a debt
or loan
◦ IF there is Not
enough money in the
bank then the
transaction will not
happen.

Why might you not
notice overdraft
charges until they
have been
accumulating for a
while?
◦ Protection plan
◦ Transaction is not
stopped or cancelled
◦ Takes a while for the
transaction to go
through
Using a Debit Card

Overdraft
occurs when
withdrawals
from a bank
account
exceed the
available
balance
which gives
the account a
negative
balance.
Using a Debit Card

Debit Card uses
◦ ATM
 Withdrawal cash
 Deposit a check
 Manage accounts
◦ Purchases
 Debit from checking
account
 Use it as a credit (it
just takes longer to
withdrawal from
account)
Using a Debit Card

Overdraft fee is a
fee that an account
holder pays when
withdrawals from a
bank account
exceed the
available balance
causing the account
to have a negative
balance.
Using a Debit Card

Faye’s bank charges
her a $2.25 service
fee every time she
uses an out-ofnetwork ATM. If Faye
uses an out-ofnetwork ATM twice a
week, how much
money does she pay
in service fees every
year?


$2.25 *2X *52weeks
=
$234
Using a Debit Card


Elizabeth has $252.00
in her account on
Sunday. Over the next
week, she makes the
following changes to
her balance via
deposits and
purchases:
On what day does
Elizabeth first get
charged an overdraft
fee?
Day
Debit ($) Credit ($)
Monday
114.60
150.00
Tuesday
79.68
---
Wednesd
ay
Thursday
161.39
---
57.40
---
Friday
22.85
75.00
Saturday
140.55
---
Using a Debit Card
Simple Interest
simple interest and how it relates to saving money
Calculate
Integrate simple interest into a money saving plan.

Principal- (Start)

Growth Rate- (from here for the
year) consistent in simple interest
Simple Interest

interest rate affect
money earned on a
savings account?
◦ Calculated money
investment
◦ Increase value in
account

When calculating
simple interest,
what must you do if
you want to invest
for months instead
of years?
◦ Divide by 12 months
Simple Interest

Simple interest
◦ 6% per year

I = P*r*t




I- interest earned
P- Principal/ initial
amount
R- growth rate
T- time in years
◦ Use a fraction for
months (1/12)

Simple Interest
($5,000) (0.06) (1)
= $300
Gina invests $1,677 in an
account paying 8.61% simple
interest annually. How much
interest has Gina gained after
six years?
a.
$668.65
b.
$240.65
c.
$866.34
d.
$2,543.34
Simple Interest
Maggie has $14,100 to invest,
and wishes to gain $4,000 in
interest over the next eight
years. Approximately what is the
minimum simple interest rate
Maggie needs to reach her goal?
a.
b.
c.
d.
2.89%
3.55%
4.95%
5.18%
I= P*r*t
http://youtu.be/mYKyZzchFJg
“hobbit” Troll Cave
Compound Interest



Interest rate is a
great way to save
money.
Each savings a
account can have an
interest in your
savings
The rate changes as
the money in your
account increases (so
does your %)




Find rate
Calculate the
numbers
Integrate into a
savings plan
http://au.pfinance.ya
hoo.com/tips-andtools/calculators/com
pound-interestcalculator/
Compound Interest


Principal- initial
amount
Growth rate-

Growth rate factor◦ sum of one plus the
decimal representation
of the growth rate.

Stated Rate
◦ the rate given before
the effect of compound
interest

Effective Rate
◦ The effective rate is the
rate after the effect of
compound interest.
Compound Interest


Online Content
Section you have to
use the Compound
interest Calculator.
Notice the change
in rates and how
long the interest
rate is available.

What is the percent
Change?

For monthly
changes is it more
or less?
Compound Interest





A= amount after t
years
P= principal amount
R= standard rate
N= number of times
principal is
compounded in a
given years
T= time
Compound Interest

A principal of $4,570
is placed in an
account that earns
4.5% interest. If the
interest is
compounded
annually, how much
money will be in the
account at the end of
5 years?


4,570 * 0.045 =
205.65


4775.65 * 0.045=
214.90


4990.55 * 0.045=
224.57

Year 5 = 5695.05
Compound interest

Money is invested
into an account
earning 4.25%
interest compounded
annually. If the
accumulated value
after 18 years will be
$25,000,
approximately how
much money is
presently in the
account?




Use the formula
A=P(1=r/n)/\ rt
=11, 820
http://www.mathsisfu
n.com/money/compo
und-interestcalculator.html
Compound interest
Other types of savings accounts
Benefits of online banking
Solve bank account transaction problems
Other Bank Accounts

Money Market
Account-
◦ a type of savings
account that pays
interest at a higher rate
than a regular savings
account.

Certificate of Deposit
◦ CD is an interest
bearing savings account
that requires the
account holder to
deposit funds in the
account for a specific
period of time.
Other Bank Accounts

CD rate (-)
◦ Higher minimum
balance
◦ Not liquid
◦ Cannot access
account until the
account matures.
◦ If you withdrawal you
lose a significant
amount of money

Online interest rates
◦ Smaller overhead
cost
◦ Don’t pay for a
building or similar
expenses
◦ Free to offer better
interest rates
Other Bank Accounts

Online Banking

Positives
◦ Check statements
anytime
◦ Eliminates paper
◦ No fees
◦ Transfer funds
◦ Manage budget

Main issues
◦ Security
◦ E-mail alerts
Other Bank Accounts


Some online banks
offer “online bill
pay.”
You can visit your
bank account online
and electronically
transfer funds to
pay your bills.

Rate the following
bank accounts from
most to least liquid:
1.
2.
3.
4.
Checking
Savings
Money market
CD
Other Bank Accounts

Greg invests $2,680
in a five-year CD
giving 7.0% interest,
and $3,060 in an
online savings
account giving 4.5%
interest. When the
CD funds, how much
more interest will it
have earned than the
savings account?

CD rate $2,680
◦
◦
◦
◦

Savings
◦
◦
◦
◦

5 year CD
7%
187.6 per year
938
$3,060
4.5%
137.7 per year
688.5
Difference = 249.5
Other Bank Accounts
Government Agencies
Regulating finance
Protect investors

FDIC

FED

NCUA

OCC

OTS
Government Agencies

“FDIC”- Federal
Deposit Insurance
Corporation
◦ Banks are member
FDIC
◦ The FDIC is a
government bureau
that insures the money
that customers deposit
in the bank, so your
money is safer in an
FDIC bank.



Savings account
Checking account
CDs

Places limit on insured
money (loan)

Insured banks pay a
premium on the
money insured.
Other Bank Accounts


“FDIC”- Federal
Deposit Insurance
Corporation
If the FDIC charges
Bank E 2.4 cents per
100 dollars insured,
how much must Bank
E pay to insure $4.8
million in deposits?


.024/100=
%0.00024

.024*4,800,000=

$1,152

https://www.fdic.gov
/edie/fdic_info.html#
03
Other Bank Accounts

In 2007, the FDIC’s
insurance limit was
$100,000 per
person per bank.
Approximately 62%
of Gil’s deposits
were insured by the
FDIC. Which of the
following was a
possible setup for
Gil’s deposits?

Savings account
and CD rate at bank
4

Money market and
Cd at bank 5

Savings and money
market account at
bank 6
Other Bank Accounts
Government Agencies


FDIC
Fed
◦ Federal Reserve System

NCUA
◦ National Credit Union
Administration

OCC
◦ Office of the Comptroller of the
Currency charters

OTS
◦ Office of Thrift Supervision
Government Agencies

All
companies
regulate
financial
market
except the
FCC

The FDIC provides
security and
insurance for your
deposits. If
misfortune befalls
your bank, it is the
FDIC's job to ensure
that you do not lose
the money that you
have deposited
there. A bank that is
not a member of the
FDIC lacks this
protection.

Federal Reserve is
controlled by the
government
Government Agencies

If the FDIC charges
Bank E 2.4 cents
per 100 dollars
insured, how much
must Bank E pay to
insure $4.8 million
in deposits?

.024 / 100

0.00024 *
4,800,000

1,152
Government Agencies

If the NCUA charges
6.3 cents per 100
dollars insured and
Credit Union L pays
$8,445 in NCUA
insurance
premiums,
approximately how
much is in Credit
Union L’s insured
deposits?


Answer this
question like a cross
fraction equation.
0.063 / $100 =
8445/X


8445*100 =
A /0.063

=13.4 million
Government Agencies
Topic Test