Transcript The New Corporate Colors Collection

Personal Finance
Theme 3
Banking & Checking
Advantages of a Bank
Account Include:
•Your money is safe.
•Each account is insured.
•Canceled checks are
proof that you paid a bill.
Banks vs. Credit Unions
•A credit union is a nonprofit cooperative financial
institution owned and
controlled by its members.
•A bank is a for-profit
company that makes
money from charging fees
and lending money.
Savings Accounts & Interest
•A Savings Account – is a
bank account that earns
interest.
•Accounts are started by
making a deposit – an
addition to the balance
on your bank account.
Savings Accounts & Interest
•With a checking account
paychecks can be direct
deposited – an electronic
addition to your checking
account.
Savings Accounts & Interest
•When money is needed a
withdrawal – (a deduction
from a bank account
balance) can be made.
Savings Accounts & Interest
•In a savings account, your
money works for you by
earning interest – income
earned on a deposit or
payment owed on a loan.
Savings Accounts & Interest
•There are two types of
interest:
–Simple interest means that
you only earn interest on
your initial deposit.
–Compound interest allows
you to earn interest not
only on your initial deposit,
but also on the interest you
earn as you go along.
Savings Accounts & Interest
•Any bank account that you
put your money into should
be FDIC insured.
•The Federal Depositors
Insurance Corporation
(FDIC)– federal insurance on
bank account balances up
to $250,000.00.
Savings Accounts & Interest
•Any credit union account
that you put your money into
should be NCUA insured.
•The National Credit Union
Administration – federal
insurance up to $250,000.00.
Bank Offerings
•A certificate of deposit, or
CD, is a kind of savings
account in which you
leave your money on
deposit for a set period of
time in order to earn
interest.
Bank Offerings
•You can use your debit card
– purchase amount is
deducted from checking
account ( in two ways:
1. At an ATM or a point-ofsale (POS) terminal with your
personal identification
number, or PIN (A 4 digit
passcode).
Bank Offerings
2. At stores and
restaurants that accept
credit cards, without
providing your PIN. You
will be asked to sign a
receipt.
Bank Offerings
•Banks also issue credit
cards – a card that’s
purchase amounts
become a loan.
Bank Offerings
Checking accounts – a
bank deposit against which
checks can be drawn by
the depositor.
Bank Offerings
Some checking accounts
require a minimum daily
balance - when a checking
account balance gets
below this level, fees are
charged .
Writing Checks
Before writing a check, use
your check register – (a
customer’s account of all
transactions on a checking
account ) to record the:
Date
Check Number
Writing Checks
 Write the name of the party
who will receive the check.
 Exact amount of the check.
Writing a Check
Writing a Check
 Once a check has cleared
the bank it becomes a
canceled check.
Writing a Check
 Before deposit, a check
must be endorsed.
1. Blank Endorsement - signing
the back of a check in such a way
that it can be cashed by anyone.
Writing a Check
2. Restrictive Endorsement signing the back of a check in such
a way that it can only be used for a
specific purpose
 If you write a check that
sends the daily balance
below zero, you can be
charged for an overdraft.
Bank Statement
Your bank statement – (bank’s
monthly summary of deposits,
withdrawals, charges, and current
balance that it is transferred to
another person) will list:
 Deposits, Interest, Fees
 Checks you have written
 ATM withdrawals
 Debit card charges