eisenhower high school september 15, 2013
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Eisenhower High School September 15, 2013. Banking Basics. Overview Choosing a Bank Understanding Debit Cards Tracking Your Account Balance Balancing Your Checkbook An Overdraft Scenario. Choosing a Bank. Research local bank websites. - PowerPoint PPT PresentationTRANSCRIPT
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Fifth Third Bank, Member FDIC.
Eisenhower High SchoolSeptember 15, 2013
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Fifth Third Bank, Member FDIC.
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Fifth Third Bank, Member FDIC.
Banking Basics
Overview • Choosing a Bank• Understanding Debit Cards• Tracking Your Account Balance• Balancing Your Checkbook• An Overdraft Scenario
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Fifth Third Bank, Member FDIC.
Choosing a Bank
• Research local bank websites. • Select a bank with the most ATMs in your proximity.• Look for banks that can make it even easier for you to
bank. - Online Banking - Online Bill Pay - Email Alerts - Mobile Banking - Free Checking - Savings Account - Lowest or Free Transaction Fees
• Ask parents and friends.
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Fifth Third Bank, Member FDIC.
Understanding Debit Cards
• Debit cards work like cash or a personal check. • Debit cards offer a quick way to pay for groceries, gas,
etc. • With debit cards, you pay now. With credit cards, you pay
later.
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Fifth Third Bank, Member FDIC.
Debit Card Advantages
• It’s easier to get than a credit card, since it is attached to your checking account.
• It’s more convenient; you don’t have to carry cash or a checkbook.
• You don’t pay interest charges, because the money comes directly out of your checking account.
• Purchase protection.
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Fifth Third Bank, Member FDIC.
Debit Card Tips
• Keep your debit card safe and secure. • Make sure you have enough money in your account to
cover purchases made with your debit card. • Keep track of all your debit card transactions. • Memorize your debit card PIN; don’t write it on your card
or keep it in your purse or wallet.
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Fifth Third Bank, Member FDIC.
Tracking Your Account Balance
• It’s important to keep track of your account balance because you could “bounce” a check and/or have an overdraft on your account. - What is overdraft? - What are insufficient funds? - What happens if a check is returned?
• Write down all your debit card purchases in your checkbook register.
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Fifth Third Bank, Member FDIC.
A Tale of Two Balances: What Is Your Actual Balance? Tracking balances can be tricky, especially if you use a debit card. Some merchants (gas stations, restaurants, etc.) only authorize a small portion of your total bill at first. Then, several days later, they authorize the rest. That delay can make your available balance look bigger than it really is.
$100.00
Gas - $20.00 Lunch - $7.00Tip - $1.00
Available Balance $92.00The Actual Balance: $72.00
(How can that be?)
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Fifth Third Bank, Member FDIC.
A Tale of Two Balances: What Is Your Actual Balance?
• The gas station only pre-authorized the debit card transaction for $1.00, rather than the full $20.00.• The café authorized the amount of the bill ($7.00), but did not include the $1.00 tip. • Therefore, while you only have $72.00 left in your account because you spent $28.00, your statement balance will show $92.00 until the purchases are posted to your account.
Gas - $1.00 Lunch - $7.00
Available Balance $92.00
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Fifth Third Bank, Member FDIC.
So, to Summarize:
It is up to YOU to keep a register of your account to know what the accurate balance is at any given time.
$100.00
Gas - $20.00 Lunch - $7.00Tip - $1.00
Actual Account Balance $72.00
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Fifth Third Bank, Member FDIC.
Balancing Your Checkbook
Five Reasons You Should Balance Your Checkbook 1. You might have made a mistake. 2. You forget to post a transaction in your checkbook register. 3. There may be a bank error. 4. There may be an unauthorized transaction (fraud). 5. If you only check your transactions online, you might forget
about checks you wrote, debit transactions, etc.
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Fifth Third Bank, Member FDIC.
How to Balance Your Checkbook
1. Ending balance from your bank statement.
2. Add total outstanding deposits. 3. Subtract total outstanding
checks/debits.4. New balance.
$ _______+ _______- _______ = _______
Deposits - Checks/Debits = Balance
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Fifth Third Bank, Member FDIC.
An Overdraft Scenario
Kara goes into the bank on 3/27 to deposit her paycheck. A Customer Service Representative (CSR) notices Kara’s account is overdrawn, which can cost $25+ for each overdraft. The CSR mentions this to Kara, and she wants to know why. Upon reviewing the statement, here is what we see:
03/25 $100.00 daily balance 03/26 $175.00 ck# 1102 (rent check) 03/26 $ 18.25 department store 03/26 $ 6.20 bookstore 03/26 $ 12.00 restaurant 03/26 $-111.45 daily balance 03/27 $-148.00 overdraft/return items fee 03/27 $-259.45 daily balance
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Fifth Third Bank, Member FDIC.
What Happened?
• Because the rent check was written on 3/21, Kara assumed it had already been deducted from her account when she called the bank for her balance on 3/25.
• Kara thought her rent check had already cleared when she got the balance on 3/25, so she continued to spend the $100 in her account.
• She didn’t keep track of all her checks written and debit purchases in her checkbook register, therefore she did not have up-to-date information about her account balance.
• Since she didn’t track her transactions with her checkbook register and did not go online to look at her account, Kara wound up with $148 in fees.
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Fifth Third Bank, Member FDIC.
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Fifth Third Bank, Member FDIC.