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Banking

Banking. Money. Barter Trade item for item May not account for true value Currency Paper money and coins used for financial transactions Smaller payments usually Checks Larger payments Money transfers from bank to PAYEE. Banks. How do banks earn their money? Interest! Service fees

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Banking

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  1. Banking

  2. Money • Barter • Trade item for item • May not account for true value • Currency • Paper money and coins used for financial transactions • Smaller payments usually • Checks • Larger payments • Money transfers from bank to PAYEE

  3. Banks • How do banks earn their money? • Interest! • Service fees • Banks provide security • Protect your purchasing power • More you can buy for your money • Banks are regulated • Own money put into it • Reserves

  4. Banking • Deposits are insured • FDIC – Federal Deposit Insurance Corporation • $100,000 max • Money lent to borrowers • People: houses, cars, etc. • Business: start-up, buildings, equipment. • Credit is verified to ensure payback

  5. Checks • Safety • Only the payee can cash • Payer not responsible if cashed illegally • Banks responsible if cashed illegally • Banks request ID to cash a check • If lost, can stop payment • Convenience • Recorded transaction

  6. Checking accounts • Interest and non-interest bearing checking accounts • Joint and individual accounts • Various plans • Based on checks • Based on use (electronic) • Fees • Maintenance fees (per month) • Service charges (per check)

  7. Opening Checking Accounts • Must be 18 • Minimum deposit • Identification • Complete signature card • Sometimes credit check • SS# • Proof of address

  8. Writing a check • Write in nonerasable ink • Fill in every line – date, payee, aount of check –words and numbers, signature • Write checks sequentially • Keep documents in safe place • Notify bank immediately if checks stolen

  9. Important Check Terms • Check register • Record all transactions • Maintain an account balance • Overdrawing • Endorsements • Third party checks • Deposits/deposit forms • Check clearing process

  10. How can I be overdrawn when I still have checks left???

  11. New Age Banking • Electronic Funds Transfer (EFT) • Direct deposit • Debit cards • ATM cards • Bill payments • Pay by phone • Automatic withdrawals • Online banking

  12. ATM’s • ATM cards • Pin number • Deposits • Withdrawals • Costs • Use responsibly

  13. Caution! • Keep your card in a safe place • Memorize your ID • Never give it out • Never say it out loud • Keep all receipts! • Record transactions • Notify bank immediately if card lost

  14. EFTA • Requires banks to inform customers of fees • Requires banks to provide receipts • Requires consumers to use EFT’s responsibly • Report lost cards • Immediately – lose $50 max • After two days – lose $500 max • After 60 days – lose everything

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