Building Bucks

1. Building Bucks Basic Financial Services

2. Financial Institutions • 3 Main Types • Banks • Credit Unions • Savings and Loan Associations (S&L) • Advantages • Convenient access to your money • Security • Saves money • Access to knowledgeable people • Building block of credit • Earn interest

3. Types of Saving • Regular Savings Account • Interest paid monthly • May require a minimum deposit • Certificates of Deposit (CDs) • Money must remain in account for a term • Higher interest rate than a savings account • Electronic Transfer Account • Direct deposits for government payments • Money Market Account • Limited check writing and withdrawals • Pay higher interest than regular savings accounts • Interest rate may change • U.S. Government Securities • Often offers highest return with lowest risk

4. Choosing a Savings Account • How much will my savings earn? • How easy is it for me to access my money? • What’s the minimum amount needed to open the account? • Is there a minimum balance to keep the account open? • Does the account have a maturity date? • Is the account “liquid” or “long-term”?

5. Checking Account Basics Advantages Disadvantages Cost of over-drafting account can be costly Greater responsibility for record keeping Minimum balance or fee requirements • Convenient—money available • Safer than carrying cash • Proof of payment • Easier budgeting

6. Choosing a Checking Account • What types of checking accounts are available? • Is a minimum balance needed on an account and is it able to earn interest? • Does the account have ATM or Debit cards available? • Are overdraft protection plans available? • What are account disclosures?

7. Maintaining a Checking Account • Record all transactions in your register • Checks • Debits • ATMs • Keep a running balance of your account • Balance your checkbook with your monthly statement • Subtract checks and ATM withdrawals from your checkbook right away

8. Overdrafts • “Overdrafting” or “Bouncing a check” • Spending more than you have using a check • “Overdrafting” with ATM or Debit Card Use • Spending more than you have using your card • Your ATM/Debit Card is not a Credit Card • Standard overdraft practices • Transaction covered for a flat fee-$20/$30 each time you overdraw

9. Overdraft Protection • Overdraft protection • Offered by some financial institutions • Moves money from savings to checking in cases of overspending • Options Include • Transfer from savings, line of credit, tied to a credit card • New Rules: • Rather than auto enrollment in overdraft plans customers must “opt in” to this coverage for ATM/debit card use

10. Savings and Checking Accounts • Opening an account • Identification • Social Security number • Money to put in the account • Using an ATM • Deposit money • Withdraw money • Check your balance • Transfer money between accounts

11. Savings and Checking Accounts • Direct Deposit and Electronic Transfer Account • Automatically deposit checks directly into a savings or checking account • Pre-Authorized Transactions • Scheduled payments automatically pulled from your account • Online banking • Manage all accounts with a secure website

12. Go Direct • All federal benefit payments are moving to electronic payments by March 1, 2013. • Direct deposit to a bank or credit union account or • Direct Express® card account (default) • Prepaid debit card • Make purchases, pay bills and get cash back • No bank account required • No sign-up fees or monthly account fees, but… • See: Fee_Schedule.pdf. • Optional text message notifications and alerts.

13. Looking Ahead • Electronic Wallet (smart phone transactions) • Continued movement from paper • Fewer paper checks or statements • Electronic monitoring and management • Shifting fees – al la cart – need to watch • Blurring of banked and under-banked • Retail financial services at stores • Convenience services – check cashing, bill payment—more popular and competitive