LessonPPT Chapter 5 Checking Accounts

Personal
Finance

Chapter 5

© EMC Publishing, LLC

Financial Institutions
Basic Banking Concepts

• Why do I need a bank?

– Place to store your money and other

valuables safely

– Place to open a convenient

checking account

– Place to apply for loans

© EMC Publishing, LLC

Financial Institutions
Kinds of Financial Institutions
• Commercial banks
• Savings and loans (mutual savings banks)
• Credit unions
• Payday lenders and check

cashing companies

What do you think?

Discussion

© EMC Publishing, LLC© EMC Publishing, LLC

• Is using a payday lender a good idea?
• Why might someone have to use a

payday lender?

• Why might you need to use a check

cashing company?

© EMC Publishing, LLC

Which of the following is not a kind
of financial institution?

A.

Commercial bank

B.

Savings and loan

C.

Credit union

D.

Retail store

E.

Payday lender

© EMC Publishing, LLC

Which of the following is not a
kind of financial institution?

A.

Commercial bank

B.

Savings and loan

C.

Credit union

D.

Retail store

E.

Payday lender

Multiple Choice

Which of the following is not a kind of financial institution?

• Commercial bank

• Savings and loan

• Credit union

• Payday lender

• Retail store

© EMC Publishing, LLC

Financial Institutions
Kinds of Financial Transactions

• Deposit
• Withdrawal
• Debit
• Credit
• Transfer
• Loan
• ACH

Point of Sale (POS)

© EMC Publishing, LLC

Financial Institutions
Kinds of Checking Accounts
• Regular checking account

– Free
– Fee

• Interest-earning

checking account

© EMC Publishing, LLC

Financial Institutions
Check v. Debit

• Checks

delay called “float"

• Debit cards

immediate
Electronic Funds Transfer (EFT)

Note: Some stores now use EFT to take funds

immediately, even when using a check.

© EMC Publishing, LLC

Financial Institutions
ATM
• Automated teller

machine
– Fees?

What do you think?

Discussion

© EMC Publishing, LLC© EMC Publishing, LLC

• Why are more stores installing

point-of-sale devices that accept debit and
credit cards?

• Do we still need cash today?
• Will we become a cashless society soon?

Why or why not?

© EMC Publishing, LLC

Financial Institutions
Checking Account Fees
• Monthly fees
• ATM fees
• Online bill-paying fees
• Overdraft and NSF fees

– Overdraft protection

• Stop-payment fees

© EMC Publishing, LLC

Financial Institutions
Opening a Checking Account

• Research financial institutions for fees

© EMC Publishing, LLC

Financial Institutions
Opening a Checking Account
• Signature authorization form
• Social Security

card

• Driver’s license

© EMC Publishing, LLC

Financial Institutions
Checking Account Activity
• Writing a check

© EMC Publishing, LLC

Financial Institutions
Checking Account Activity
• Writing a check
• Making a deposit

© EMC Publishing, LLC

Financial Institutions
Checking Account Activity
• Writing a check
• Making a deposit
• Reconciling your account
(advance to see example)

© EMC Publishing, LLC

Reconciling
Account

Mark
checks that
have cleared
and deposits
that have been
recorded.

© EMC Publishing, LLC

Reconciling
Account

Record missing
checks.

© EMC Publishing, LLC

Which of the following is not a
possible fee involved in financial
transactions?

A.

Checking account fee

B.

NSF fee

C.

Online banking fee

D.

ATM fee

E.

Poll tax fee

© EMC Publishing, LLC

Which of the following is not a
possible fee involved in financial
transactions?

A.

Checking account fee

B.

NSF fee

C.

Online banking fee

D.

ATM fee

E.

Poll tax fee

© EMC Publishing, LLC

Financial Institutions
Online Banking

© EMC Publishing, LLC

Financial Institutions
Online Banking
• Be safe when using the Internet.

– Use secure sites (shttp or https) to send

financial information.

– Don’t use “hot spots” or WiFi to send

personal information.

© EMC Publishing, LLC

Financial Institutions
Online Banking

• Registration and PINs (improve safety)
• Money transfers

(are convenient)

• Bill pay feature

– One-time vs.

auto bill-pay

– Fee vs. free

What do you think?

Discussion

© EMC Publishing, LLC© EMC Publishing, LLC

• How many of you have used the Internet

to conduct a financial transaction?

• Do you think it is safe? Why or why not?
• What tips do you have for using the

Internet for financial transactions?

• https://youtu.be/VksG_1r-gH8()
• History of Banking
Introduction to the Financial System

• https://youtu.be/O5DaC1Ujrrg

• https://youtu.be/aJJoV0xSDqABanking explained

•

(How Banks Create Money)

●https://youtu.be/NqIuOOaUypM

(Getting Your First Credit Card)

0:00 Intro
0:34 How Credit Cards Work
1:10 Annual Fees
1:40 Annual Percentage Rate (APR)
2:07 Foreign Transaction Fees
2:23 Rewards
2:42 Issuing Banks
3:57 Application Process
5:12 Setting Up Your Card
5:38 Billing Cycle Explained
6:27 Credit Card Debt
6:44 Should You Carry a Balance?
7:00 Getting Denied for a Credit Card

●https://youtu.be/NskNfAlD3wU (7 Places Your Money Needs To Go (How To Save Money)

Credit Cards 101 (Credit Card Basics 1/3)
Credit Scores and Reports 101 (Credit Card and Loan Basics 2/3)
Credit Cards: Mistakes and Best Practices (Credit Card Basics 3/3)

●

17:29

2:33

© EMC Publishing, LLC

The End

FDIC

Federal Deposit Insurance Corporation: A federal guarantee of savings bank deposits up to $250,000.

NCUA

National Credit Union Association = protects credit unions the same way that the FDIC protects bank accounts.