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Banking Basics
O You can take charge of your financial future!
O Why keep your money in a bank?O Safety
O Select an FDIC-insured financial institutionO Calculate your insurance coverage with the Electronic
Deposit Insurance Estimator (EDIE): www.myfdicinsurance.gov
O ConvenienceO CostO SecurityO Financial future
Reasons to Keep Money in a Bank
Insured Financial Institutions
O Banks and Thrifts:O Are subject to federal and state lawsO Make loans, pay checks, accept deposits, and
provide other financial services
O Credit Unions:O In addition to the above:
OAre non-profit financial institutionsORequire a membership to open an account
Bank vs. Check-Cashing Services
Check-Cashing Services
Check-cashing fees:4 x $5 = $20 a month
$20 x 12 = $240 a year
Money order fees:5 x $1 = $5 a month$5 x 12 = $60 a year
Total: $300
Bank
Monthly fee:$5 a month
$5 x 12 = $60
Box of checks: $12
Total: $72
Savings: $228
Additional Benefits of a Bank
O Internet banking access 24 hours, 7 days a week
O Good credentials for loan applications with responsible use
O No worries about cash being lost or stolen
Open & Maintain a Bank Account
1. Open the account 2. Make deposits and withdrawals3. Record interest and fees4. Keep track of your balance
Open a Bank Account
O Complete account verification process
O Photo Identification
O Your Social Security Number or Individual Taxpayer Identification Number
O Ask about “second chance” checking programs if you are unable to open an account
Types of Deposit Accounts
O Examples include: O Checking account–to pay bills and buy goods O Savings account–to save money and earn interest
O You may have transaction and monthly fees.
O The bank will send you periodic statements.
Deposit
O Deposit: money you add to your accountO Deposit slip: tells the bank how much money you
are adding to your account
Note: You may not have immediate use of deposited funds until the bank ensures there are funds at the originating bank.
Balance
O The amount of money you have in your bank account
What is your balance?
Description +/- Balance
Opening Balance
+$100 $100
Withdrawal
O Taking money out of your account using checks, withdrawal slip, or ATM
Always know how much is in your account!
Description +/- Balance
Opening Balance
+$100 $100
Withdrawal -$20 $80
Fees
O Examples include:O Monthly maintenance feesO Penalty feesO Overdraft fees
O What is an overdraft?O When you do not have enough money in your
account to cover a transaction and you have pre-authorized the financial institution to pay it anyway
O Overdraft Protection offered at your financial institutionO Can save you money on returned item and merchant
fees should you make an honest mistake in your checkbook or have an unexpected emergency
Basics of Overdraft
Basics of Overdraft
O FeesO Per item AND per day at some financial
institutions when your account is overdrawnO Usually does not cost you unless you use it
O Ways to avoid overdraft feesO Always familiarize yourself with the financial
institution’s ODP program before requesting ODP
O Keep track of your account balance and only use funds available
O If you need to use your ODP for an emergency, do one cash withdrawal and pay for items with cash. This will help you avoid a fee for each item you pay.
Balance After Fees Charged
Description +/- Balance
Opening Balance
+$100 $100
Withdrawal -$20 $80
Fees -$4 $76
Interest
O A percentage of your balance that the bank pays you for keeping your money at that bank
Description +/- Balance
Opening Balance +$100 $100
Withdrawal -$20 $80
Fees -$4 $76
Interest +$1 $77
Non-Deposit Accounts
O Includes stocks, bonds, and mutual funds
O Not FDIC-insured; therefore, you may risk losing your investment.
O Speak with a Certified Financial Planner to help you decide how to invest your money.
Filling Out A Deposit SlipAccount Number
Name, Date, and Signature for cash received
Deposit Amounts
Print Name
Filling Out A Withdrawal Slip
Account Number
SSN, Name, and Signature
Date
Amount of Withdrawal
Writing A Check
Account Number
Fraction Code Routing Number
Drawee Bank
Maker Information
Routing Number
Check Numbers Must Match
Check Numbers Must Match
Signature
Micro Printing
Balancing Your Check Book
Checking Account Statement
1. Bank Name: The name of your institution and its location.
2. Personal Information: Your name and address.
3. Account Information: The type of account and the account number.
4. Statement Period: The dates that the statement covers.
5. Activity Summary: An overview of your credits and debits as well as the balance remaining at the end of the period.
6. Transaction Summary: A detailed listing of your credits and debits. Note that the dates for the checks you have written are those on which the bank processed them, not when you wrote them.
Reconciling our Account
O Balancing: Keeping you checkbook register up to date and maintaining totals.
O Reconciling: Finding and correcting any differences between the statement balance and your check register balance.
Thank You for Banking with FSNB
