Banking basics class-en-medikab

Editor's Notes

• #3: The MoneyWI$E program was created by the national non-profit organization Consumer Action with a grant from Capital One. The MoneyWI$E program includes educational materials on credit and personal finances in Chinese, English, Korean, Spanish and Vietnamese. Tips for leading the class: - Speak to your audience, not at them. - Make eye contact. - Pause when you ask questions. - Call on people to answer general questions, but don’t single people out when asking personal questions.
• #4: Hand out folders to participants. Emphasize that the seminar is not graded and is not a competition. Encourage participants to ask questions. Make sure that your students know that you are there for general information purposes only and that you are not a financial advisor. If personal questions persist, let your students know that you or agency staff can provide them with a list of resources at the end of class that will help them answer those questions.
• #5: Review these learning goals for the seminar. This is a good time to ask participants what they want to get out of the seminar. Write down their ideas on the easel pad or white board. This process helps participants focus and helps you to better understand the needs of your audience.
• #6: Ask participants to take a look at their folders and make sure they have all the materials needed.
• #7: Ask participants what some of the advantages are to having a bank account. Write down key concepts and ideas on the easel pad or board. As the leader, your role is to listen attentively and pull out the general information that can be used by the entire class. Be supportive, encouraging and tolerant.
• #8: Review these advantages of having a bank account, pointing out items on the list that participants had identified during the discussion of the last slide. You can make the point that alternative financial services (such as check cashers and payday lenders) charge high fees and don’t offer the same service to customers as banks and credit unions. Remind participants that accounts are insured up to $250,000 by the FDIC (banks) or the National Credit Union Share Insurance Fund (credit unions). You can verify whether an institution is FDIC-insured by searching for it on the FDIC’s website or calling the FDIC’s Division of Compliance and Consumer Affairs at 877-275-3342.
• #9: Encourage participants to brainstorm even if they are not sure of the differences between banks and credit unions.
• #10: During this discussion, use examples of well-known banks to illustrate your explanation.
• #11: During this discussion, use examples of some local credit unions to illustrate your explanation.
• #12: Ask participants this question to generate discussion of account verification services.
• #13: You may want to note that there is a possibility that banks and credit unions will check the ChexSystems database when you apply for a savings account as well.
• #14: ChexSystems can be reached at 800-428-9623 or on the Internet (www.consumerdebit.com) When you order a copy of your ChexSystems report, it includes instructions on how to dispute inaccurate information.
• #16: Emphasize that while accurate information stays on your ChexSystems report for five years, this doesn’t always mean that it is impossible for you to open a new checking account. Encourage participants to inquire at different banks and credit unions as requirements vary.
• #17: In this exercise you will review the sample ChexSystems report with workshop participants. The different elements of the report can get confusing, so be sure to go slowly and define your terms along the way. Ask participants if there is anything they don’t understand.
• #18: Ask this question to get participants talking about the different features of checking accounts.
• #19: ATM – Automated Teller Machine Online banking requires you to register your account for online access using a username and password. Mobile banking is possible with a data-ready device (smart phone, personal digital assistant (PDA), droid or iPhone). In most cases, you can check your balance, pay bills and transfer money by calling your financial institution.
• #20: Possible from anywhere you have Internet access. All major consumer financial institutions offer online banking and bill payment. After logging on, you can add payee information for any bill you want to pay via online banking. You also can see balances and activity for all your accounts, and transfer money between those accounts with a few clicks. Convenient means no trips to the post office or mailbox to mail bill payments, no need to visit a bank teller as long as deposits are made electronically, and the ability to pay bills and view activity just about any time and anywhere (for example, no need to worry about bills going unpaid while you are traveling!). Fees on e-accounts (where all or most deposits and other transactions are made electronically) are generally low or nonexistent. You don’t have to wait for your monthly statement to see if a check has cleared, a deposit has been processed, or what your balance is. You can cut out postage costs for mailing bill payments and reduce the number of checks you have to buy. For non-direct deposited checks (a gift, payment for something you sold, reimbursement from a friend or family member, etc.), you’ll still have to make a trip to the ATM to make the deposit. You’ll also have to visit the ATM to withdraw cash as needed unless you can request cash back when you pay with your debit card at a grocery store or other business.
• #21: If the financial institution is new to you, and particularly if it has no brick-and-mortar (physical) locations, you should confirm with the FDIC (Federal Deposit Insurance Corporation) at www.fdic.gov that your deposits with the institution are insured (up to $250,000). (Search by name, city, state or ZIP code.) Banks chartered overseas may not be FDIC-insured. Account passwords should be at least eight characters long and use numbers and symbols as well as letters. Don’t give out your logon name or password or keep them where someone could find them. Watch out for email messages that pretend to be from your bank and ask for sensitive information such as an account number, birth date, Social Security number or password. Your financial institution will never ask for this information via email. Also, beware of clicking on a link in such an email. Often, these links lead to copycat websites that lure you into giving your personal information. Before conducting a transaction, always type in the correct website address for your bank yourself (rather than using a link in an email). Don’t conduct online banking using unsecured and unencrypted Wi-Fi—this puts your information out there for someone to grab. Learn how to protect yourself on Wi-Fi at Lifehacker.com and OnGuardOnline.com. Monitor your account activity regularly—even daily. If you see anything suspicious, contact the financial institution immediately.
• #22: Discuss each of these features and types of checking accounts (described in the Basic Banking Leader’s Guide). Involve participants by asking them if they know what each kind of account or feature is. Free accounts may be available if you use direct deposit to receive your paycheck or benefits check. This means you will not receive a paper check, but the money will go automatically into your account. Some banks also offer free accounts if you use an ATM machine for all deposits and withdrawals. For those who receive government benefits, electronic transfer accounts may be found at www.eta-find.gov/. Some financial institutions offer basic checking accounts with no (or very low) minimum balance requirements—which means you won’t get hit with a monthly fee if your account dips too low. These accounts sometimes have limited check writing privileges. Some banks voluntarily offer similar accounts. Ask local banks if they have these accounts.
• #23: During the discussion of this slide, be sure to clarify the ways in which a debit card (or “check card”) is different from a credit card or an ATM card. Even though a debit card has the Visa or MasterCard logo on it, money is immediately taken out of the accountholder’s account. You are not using credit, and you will not receive a bill later. Debit/check cards are convenient, but they do not help you to build a credit history. While both debit cards and ATM cards can be used at automated teller machines (ATMs), you might not be able to use an ATM card (without the Visa or MasterCard logo) to make purchases at businesses.
• #24: Stress that debit cards are like cash because you don’t always need a PIN to use them.
• #25: Ask participants to take out the check writing activity sheet from their folders. In this activity, participants practice writing a check and then entering it into a sample checkbook register. Give participants five to 10 minutes to complete the worksheet. When participants have written the check to Peter Perkins and deducted it in the checkbook register, the new balance will be $1,343.87. A teacher’s key to this exercise can be found in the MoneyWI$E Banking Basics Lesson Plan.
• #26: This is the “classroom discussion question” at the bottom of the check writing activity worksheet. Ask participants to share their suggestions with the class.
• #27: Discuss how important is is to write down all transactions that you make: checks you write, ATM withdrawals and purchases and “cash back” using your debit card. This can help you avoid “bounced check fees” (NSF fees) This also helps with tracking spending and sticking to a budget: you have a record of how much you spend each month on rent, bills and anything else you pay for with checks or your ATM card. Let participants know that the MoneyWI$E series also features “Manage Your Money Wisely: Tracking Your Money,” a fact sheet on budgeting and money management. If possible, bring some of these brochures with you.
• #28: Let participants brainstorm for a few minutes.
• #29: You may want to point out that while some checking accounts accumulate interest like savings accounts do, most do not. Interest bearing checking accounts may have higher maintenance fees. Explain that the annual percentage rate, or APR, can be the amount you pay (such as for a mortgage), or the amount paid to you (such as in your savings account).
• #30: Move to the next slide for an example to make the concept of simple interest clearer.
• #31: Make the point that while compounding interest helps your money grow, you can save the most money by making regular deposits into your savings account so that it grows with the power of compound interest. Example: Add $10 per month to the initial $100 deposit for 10 years, and the account would be worth $1,373.06 after 10 years. (Calculated at http://www.moneychimp.com/calculator/compound_interest_calculator.htm)
• #32: This slide concludes the first half of the Banking Basics seminar. If you will be covering the second half of the lesson today, have participants return from their break in 15 minutes. If you will be covering the second half on a different day, write the date and time on the easel pad or white board and encourage participants to attend.
• #33: Ask if anyone can answer this question.
• #34: Review these key points about CDs.
• #35: Allow the class to brainstorm.
• #36: Review these suggestions for things that might be kept in a safe deposit box.
• #37: No notes for this slide.
• #38: No notes for this slide.
• #39: Questions to consider when opening an account.
• #40: Point out that the “Choosing a bank or credit union account” worksheet is in participants’ folders. Emphasize that participants can use the worksheet as a guide to help them find the best deal when they are applying for new accounts.
• #41: Ask this question to prepare participants for the experience of going to a bank or credit union to open a new account. You might want to suggest that they call first in case the institution has any peculiar ID requirements.
• #42: No notes for this slide.
• #43: In this exercise, participants will go through the process of filling out a sample savings account application. Make it clear that while this sample application is realistic, it is not real. Let participants know that you will be discussing each section of the application with them; they are to fill out the application as you explain each section. Be sure to ask if there are any terms or directions they don’t understand.
• #44: Ownership: Review what the terms “sole owner,” “joint owner” and “primary owner” mean: - If the account is in one person’s name, check “Sole Owner.” - If it is a joint account, check “Joint Owner.” - The “Primary Owner” is the first owner listed on the account. - The primary owner will receive an annual statement of interest (1099-INT) for tax purposes. - A copy of the 1099-INT form will be given to the Internal Revenue Service (IRS). W-9 Certification: - Because the money in the account will be earning taxable income, you will be asked for “W-9 Certification,” or “Request for Taxpayer Identification Number and Certification,” a requirement of the IRS. - “Backup withholding” is an IRS requirement for people who have underpaid or been negligent in paying their taxes. - When you file your taxes, you get the excess back. There is a penalty if you lie to a bank or other company about whether you are subject to backup withholding. Review the different ATM card options with the group: - Optional means that you do not have to have the service unless you want to. - Savings account holders can request an ATM or debit card so that they can access their money at an ATM. - It is not necessary to have an ATM or debit card: savings account holders can also go into a branch of their bank and use one of the bank’s withdrawal or deposit slips to make a withdrawal or deposit. - If you already had a checking account at “MoneyWI$E Bank,” you could ask that it be linked to your new savings account. That way, you could use your existing ATM or debit card to access the new account. ATM Fees: - A “foreign bank” is not in another country—it is any bank that is not affiliated with “MoneyWI$E Bank.” - When customers of one bank use another bank’s ATM, usually they are charged twice, once by their bank and once by the foreign bank. - These two fees can add up to $4 or more on a single withdrawal.
• #45: Emphasize the importance of recording bank fees and ATM and debit card transactions, in addition to checks, in your checkbook register. This keeps you up to date on how much money you have available.
• #46: Take some suggestions from participants before moving on to the the next slide.
• #47: Discuss these ways to save on account costs (continued on the next slide). Encourage participants to bring up any other suggestions they have for ways to save on costs. - Combining balances in your checking and savings accounts can help you to meet the minimum balance requirement and avoid monthly fees. - Save on ATM fees by using your own bank’s machines or those owned by banks that don’t charge fees to non-customers. Emphasize the importance of avoiding ATM fees. These days, if you withdraw $20.00 from another bank’s ATM, your bank or credit union may charge you $2.00 or more per foreign ATM transaction, and the foreign bank may charge you $1.50 or more. You may be left with only $16.50 or less. If you can’t avoid a fee, take out larger sums less frequently to avoid repeat fees on numerous smaller withdrawal. As an alternative to using another bank’s ATM, advise participants to get money back at the supermarket or drug store when using their debit card. -Use direct deposit for your paycheck or government benefits check. The money is sent to your account electronically. Direct deposit is faster, safer and more convenient and may make you eligible for a free account.
• #48: -If you don’t get free checks with your account, investigate check-printing prices from mail-order companies—they may be lower than those charged by your bank or credit union. (Let participants know some names of alternative check-printing companies; they are listed in the Banking Basics Leader’s Guide.) -Ask the bank or credit union to reverse the occasional late fee or bounced check fee.
• #49: If you give your permission (opt in), your bank will in most cases, but not all, cover your transaction for a flat fee of about $20-30 for each overdrawn item. For example, if you make a purchase with your debit card for $150 but only have $100 in your account, your account will be overdrawn by $50 and your bank or credit union will charge you a fee. If you then make an ATM withdrawal for $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, if the fee your bank/credit union charges for its standard overdraft practices is $30, you will pay a total of $60 in fees. You could be charged multiple fees in one day. When you use your ATM or debit card and you don’t have enough money in your account to cover the transactions, your transactions will be declined. This may be frustrating, but if you don’t opt in you will avoid being charged a fee when this happens. In other words, you won’t spend money you don’t have and you won’t encounter any overdraft fees. TIP: If you write a check when you don’t have enough money in your account, or if you schedule a recurring bill payment, and you don’t have enough money in your account, your financial institution can pay it for you WITHOUT YOUR PERMISSION and charge you for each item it paid. Your opt in is ONLY REQUIRED for your financial institution to pay overdrafts on debit and ATM card transactions. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.
• #50: Your bank or credit union may offer a line of credit or a link to your savings account to cover transactions when you overdraw your account. Banks/credit unions typically charge a fee each time you overdraw your account, but these overdraft protection plans may be less expensive than their standard overdraft practices.
• #51: Point out that the best way to catch bank errors and to clear up errors if they do occur is to keep your checkbook balanced and review bank statements as soon as you receive them.
• #52: Review these basics of how to effectively resolve errors or problems with banks or credit unions. - Contact your bank or credit union as soon as possible. You may be limited to 60 days from the date the mistake appeared in your statement. - Rehearse what you want to say before you call. This will help you present your issue effectively and keep you on point. - When you talk to a customer service representative at your bank or credit union, ask for the person’s name and write it down. Write down the dates and times of all conversations with bank employees. This will help you resolve your issue and, if necessary, make follow-up calls. - During the conversation, offer a solution and ask the representative to correct the problem by a certain date. - Summarize your discussion with the representative in a letter and send it to the bank by registered mail, receipt requested, or by email. Attach documentation of your issue or problem. (Make copies for the bank—do not give away your originals.) The letter shows you took timely action. Emphasize that writing a letter is a good way to get results if you have an issue with any company. Point out that participants can seek writing help from friends or family if they are worried about their writing skills.
• #53: Let participants know that this regulatory information is included in their “You Can Bank On It” brochure. --Banks with “national” in the name or N.A. after the name, and federal savings and loans and savings banks, are regulated by the Comptroller of the Currency, U.S. Department of the Treasury, 800-613-6743 (www.helpwithmybank.gov). --State-chartered banks are regulated by state banking authorities. To find your state agency, look in the government section of your white pages directory or on the Internet (http://consumeraction.gov/caw_state_resrouces.shtml). --Federally chartered credit unions are regulated by the National Credit Union Administration, 800-755-1030, www.ncua.gov. --If you don’t think your bank falls into any of these categories, contact the FDIC at 877-275-3342, which co-regulates any bank that is covered by FDIC insurance.
• #54: Hand out evaluation forms. Make sure students know that it is important to you to get their feedback in order to become a better teacher. Encourage them to fill out the evaluation form completely. Thank participants for taking time to talk with and listen to you; make sure you reinforce that you hope they found this experience as valuable as you did.