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Activity Activity Activity Activity Activity Activity Activity
1………….Why Do You Need A Bank? 2………The Many Services of a Bank 3….The ABCs of a Checking Account 4……….Opening a Checking Account 5………………….How to Write a Check 6…..Maintaining a Checking Account 7……The ABCs of a Savings Account
Why Do You Need a Bank?
Overview • Purposes of banks • The differences between banks and credit unions • Safety of financial institutions • Banks as money management tools • The Earned Income Tax Credit
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Basic Banking Services - Activity 1
ACTIVITY 1
SAFETY OF FINANCIAL INSTITUTIONS COMMERCIAL BANKS CREDIT UNIONS
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Slide 1 – Safety of Financial Institutions Lesson Reference: Basic Banking Services, Activity 1 – Overhead 3
THE EARNED INCOME TAX CREDIT
The Earned Income Tax Credit (EITC) is a federal income tax credit for lowincome workers. The credit reduces the amount of tax an individual owes, and may be returned to the taxpayer in the form of a refund. Some states offer additional forms of EITC. Eligible workers must have an annual income and investment income that falls below a certain level. In tax year 2005, for example, if you are married, have two or more children, and are filing your taxes jointly, your combined annual income must not exceed $37,263. You must have a Social Security Number to receive the EITC. In tax year 2005, a family with two or more children could receive up to a $4,400 refund through the EITC.*
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Slide 2 – EITC Lesson Reference: Basic Banking Services, Activity 1 – Handout 2
The Many Services of a Bank
Overview • • • • Financial services provided by a bank Bank employees Services that might be of personal benefit The impact of state and federal regulations upon the security of a bank
ACTIVITY 2
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Basic Banking Services - Activity 2
REMITTANCE OPTIONS TO SEND AND RECEIVE MONEY
1. Money Transfer Organizations 2. Bank Transfers 3. Hand Delivery 4. Mail 5. Hawala 6. Post Offices 7. Stored Value Cards
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Slide 1 – Remittance Options Lesson Reference: Basic Banking Services, Activity 2 - Overhead 1
BANK OCCUPATIONS
• Tellers • Platform Bankers
• Mortgage Lenders • Operations Manager • Branch Manager
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Slide 2 – Bank Occupations Lesson Reference: Basic Banking Services, Activity 2 – Overhead 2
ELECTRONIC BANK SERVICES
Online banking is the fastest growing Internet activity in the U.S.
Types of Services • Bank Cards • Automated Services Protect Your Passwords!
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Slide 3 - Electronic Bank Services Lesson Reference: Basic Banking Services, Activity 2 – Overhead 3
BANK CARD TYPES
TYPE • Check Cards or ATM/Debit Cards DESCRIPTION
• Bank cards that allow for the payment of goods and services to be subtracted directly from a bank deposit account. • Can be used with merchants that take major credit cards—known as point of sale (POS) transactions. • Bank cards with preset, limited value. • Used to pay for goods and services. • Alternative to cash.
• Stored Value Cards
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Slide 4 - Bank Card Types Lesson Reference: Basic Banking Services, Activity 2 – Overhead 4
ELECTRONIC BANK SERVICES
• Direct Deposit • Transfers between Accounts
• • • •
Transfers to a Third Party Online Banking Bank by Phone ATM
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Slide 5 – Electronic Bank Services Lesson Reference: Basic Banking Services, Activity 2 – Handout 3
REGULATION OF ELECTRONIC BANKING SERVICES
Electronic Fund Transfer Act
Protects consumers using any type of electronic banking from loss and protects their privacy. Banks must: • Offer consumers a record or receipt for all computer transactions. • Investigate errors and report to consumer within ten days of error notification. Customers are responsible to report any errors.
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Slide 6 - Regulation of Electronic Banking Lesson Reference: Basic Banking Services, Activity 2 – Overhead 5
The ABCs of a Checking Account
Overview • Purposes of a checking account • Shopping for and comparing checking accounts
ACTIVITY 3
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Basic Banking Services - Activity 3
CHECKING ACCOUNT TERMS
• Bank Statement • Cancelled Check • Check • Check Register/Ledger • Endorsement • Fee • Interest • Minimum Balance • Outstanding Transactions • Overdraft • Overdraft Protection • Payee • Reconciling a Bank Statement • Transaction Limits
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Slide 1 - Checking Account Terms Lesson Reference: Basic Banking Services, Activity 3 – Handout 1
SHOPPING AROUND
(THINGS TO ASK ABOUT WHEN OPENING A CHECKING ACCOUNT)
SERVICES Location of bank Location of ATMs Banking hours Minimum balance required Minimum transactions or limits Interest-bearing accounts? Other COSTS Non-primary bank ATM transactions In-branch transaction fees Per-check fees Other checking fees Overdraft protection Printing of checks
Slide 2 - Shopping Around Lesson Reference: Basic Banking Services, Activity 3 - Handout 2
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Opening a Checking Account
Overview • • • • •
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ACTIVITY 4
Checking Account Application Process The Application Acceptable Forms of ID The Signature Authorization Card The PATRIOT Act
Basic Banking Services - Activity 4
OPENING A CHECKING ACCOUNT
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Slide 1 – Opening a Checking Account Lesson Reference: Basic Banking Services, Activity 4 – Handout 1
COMMONLY ACCEPTED FORMS OF ID
Primary ID*
• Photo Driver’s License issued within the U.S. or Canada
• State Non-Driver Photo ID • Photo Learner’s Permit • Government Photo ID • U.S. Passport • Non-U.S. Passport • Resident Registration Card • Mexican Consular ID (Matricula Consular)
* Financial institutions' ID requirements may differ; check with the institution first before applying for an account.
• Naturalization Certificate
• Employee Photo ID (from a recognizable employer) • Photo Trade License (barber, plumber, electrician, etc.) • Student Photo ID (college/trade school) • Medicare Card (must be 65 or older)
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Slide 2 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2
COMMONLY ACCEPTED FORMS OF ID
Secondary ID*
• Foreign Driver’s License • Pay Stub • Car Registration • Mortgage Statement • Letter of Introduction from Bank, Embassy, or well-known Employer • Welfare Card • Supplemental Health Insurance Card
• State/Local Gun Permit
• Utility Bill (Name and address of individual account should be listed) • Current Bank Statement • National Credit Card • Bank-issued Debit or Check Card
* Financial institutions' ID requirements may differ; check with the institution first before applying for an account.
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Slide 3 - Commonly Accepted Forms of ID Lesson Reference: Basic Banking Services, Activity 4 – Handout 2
THE PATRIOT ACT
Congress passed the PATRIOT Act in response to the terrorist attacks of September 11, 2001. Financial institutions are now required to collect certain information when a new account is opened. The customer must provide identification that includes name, date of birth, address, and identification number. 2. The institution must maintain a copy of the information used to verify the person’s identity. 3. The institution must determine whether the applicant appears on the lists of known or suspected terrorists or terrorist organizations.
1.
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Slide 4 – The PATRIOT Act Lesson Reference: Basic Banking Services, Activity 4 – Overhead 1
SIGNATURE AUTHORIZATION CARD
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Slide 5 – Signature Authorization Card Lesson Reference: Basic Banking Services, Activity 4 – Handout 3
ACTIVITY 5
How to Write a Check
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Basic Banking Services - Activity 5
WRITING A CHECK
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Slide 1 - Writing a Check Lesson Reference: Basic Banking Services, Activity 5 – Handout 1
Maintaining a Checking Account
Overview • • • • • •
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ACTIVITY 6
Check 21 Keeping a check register Making a deposit into a checking account Reconciling a bank statement Maintaining a checking account Avoiding Overdrafts
Basic Banking Services - Activity 6
CHECK 21
Check 21 is a federal law that helps banks handle more checks electronically and that makes check processing faster and more efficient. Under this law, a check deposited in a bank is typically ―delivered‖ overnight to the paying bank and deducted from the checkwriter’s account on the next business day. Money may be deducted from your checking account almost immediately.
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Slide 1 – Check 21 Lesson Reference: Basic Banking Services, Activity 6 – Handout 1
KEEPING A CHECK REGISTER
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Slide 2 - Keeping a Check Register Lesson Reference: Basic Banking Services, Activity 6 – Handout 2
MAKING A DEPOSIT - ENDORSING A CHECK
The Back Side of a Check
Restrictive Endorsement (most secure)
Blank Endorsement (least secure)
Endorsement to a third party
Slide 3 - Making a Deposit - Endorsing a Check Lesson Reference: Basic Banking Services, Activity 6 – Handout 2
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MAKING A DEPOSIT COMPLETING A DEPOSIT SLIP
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Slide 4 - Making a Deposit - Completing a Deposit Slip Lesson Reference: Basic Banking Services, Activity 6 – Handout 2
RECONCILING A BANK STATEMENT
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Slide 5 - Reconciling a Bank Statement Lesson Reference: Basic Banking Services, Activity 6 – Handout 2
OVERDRAFTS AND BOUNCED CHECKS
Overdrafts and bounced checks occur when you complete a financial transaction (e.g., write a check) for more than what is available in the account. Your financial institution may pay the amount and charge you a fee, known as an ―overdraft fee‖ or a ―nonsufficient funds fee.‖
Tip: Avoid overdraft or non-sufficient funds fees by making a
habit of monitoring the balance in your checking account.
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Slide 6 – Overdrafts and Bounced Checks Lesson Reference: Basic Banking Services, Activity 6 – Overhead 1
The ABCs of a Savings Account
Overview
• • • • Purpose of a savings account Shopping for a savings account Applying for a savings account Monthly bank statement checkup
ACTIVITY 7
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Basic Banking Services - Activity 7
REASONS TO SAVE
• Emergencies
• Future Purchases
• Future Investments
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Slide 1 - Reasons to Save Lesson Reference: Basic Banking Services, Activity 7 – Overhead 1
SHOPPING FOR A SAVINGS ACCOUNT
Factors to consider:
• • • • • • • • •
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Safety Risk Liquidity Minimum Account Balance Requirements Fees and Service Charges Interest Rate Returns (Earnings) Automatic Transfer Direct Deposit
Slide 2 - Shopping for a Savings Account Lesson Reference: Basic Banking Services, Activity 7 – Overhead 2
OPENING A SAVINGS ACCOUNT
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Slide 3 – Opening a Savings Account Lesson Reference: Basic Banking Services, Activity 7 – Overhead 3
BANK STATEMENT
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Slide 4 – Bank Statement Lesson Reference: Basic Banking Services, Activity 7 – Overhead 4