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Question Name some good money habits related to managing checking and savings accounts. Some good habits include: Use a free, interest-earning checking account for your day-to-day spending needs. Use high-interest savings accounts for funds you will ill nott need d ffor six i months th tto about b t fi five years in the future. Use investments for needs that will not occur until five or more years in the future. 1 Some more good habits include: Maintain an emergency fund sufficient to cover three months of expenses. Buy certificates of deposit when saved funds will nott be date. b needed d d until til a specific ifi ffuture t d t Reconcile Size your account statements monthly. of institution Location Years in business of interest Availability A il bilit for f emergencies i Types of checking accounts Monthly service charges Insured Convenience for making deposits & withdrawals / cash machines Rates Personal services & community support Atmosphere Fees yp Types of loans offered transactions Direct deposits/withdrawals Checkless 2 Overdraft fees Stop-payment fees check charges ATM charges g Replacing a lost ATM card Account balance statement Debit card fees Closing an account within the first year Return Too many withdrawals from savings account transfers from savings to checking Using counter checks Visiting a safe deposit box too often Depositing bags of coins Teller assistance Getting a check certified Traveler’s checks fee Automatic What is monetary asset management? Monetary assets = Cash 3 The Three Tools of Monetary Asset Management: 1. Low-cost, interest-earning checking accounts 2. g savings g accounts Interest-earning 3. Money market accounts Who provides monetary asset management services? Financial Services Industry: Companies that provide monetary asset management and other services. 4 Commercial Banks Insured by Bank Insurance Fund (or BIF) of the FDIC Savings Banks (or S&Ls) Insured by Savings Association Insurance Fund (or SAIF) of the FDIC Mutual Credit Savings Banks (or MSB) Union (or CU) Insured by the National Credit Union Share Insurance Fund (or NCUSIF) 5 A finance professional discusses features of different kinds of depository institutions. Deposit Insurance is a real plus. The maximum insurance on all single-ownership (individual) accounts (held in your name only) is $100,000. The Th maximum i iinsurance on all ll jjoint i t accounts t (accounts held with other individuals) is $100,000. The maximum insurance on all retirement accounts is $200,000. A maximum of $100,000 in insurance per beneficiary is payable on “death accounts”. 6 A finance professional discusses the function of deposit insurance. Mutual Funds Stock Brokerage Firms Insurance Companies What financial service providers have you used and what have been your experiences? 7 Checking account Debit (or Check) Card Types of checking accounts: Interest-Earning Checking Account [or Negotiable Order of Withdrawal (NOW) Account] Tiered Interest Lifeline Cleared Banking Account – Check 21 Substitute Check Stop-Payment Order 8 Traveler’s Money Checks Orders Certified Check Cashier Cashier’ss Check Bank Endorsement Special Endorsement Restrictive Endorsement Automatic Funds Transfer Agreement Automatic Overdraft Loan Agreement Bounce Protection Agreement 9 Savings Time Account Deposits Statement Savings Account (or Passbook Savings Account): Permits funds. frequent deposits or withdrawals of Certificate of Deposit (or CD) Variable-Rate Certificates of Deposit (or Adjustable-Rate CDs) Brokered Certificates of Deposit p 10 How to save: “Pay Yourself First” Saving is not glamorous; slow and steady wins the race! Emergency fund Other savings goals can be broken down into short-term goals and monthly savings amounts. Amount of Money on Deposit Interest Rate Applied Annual Percentage Yield (APY) Frequency Grace of compounding Period 11 Money Super market account NOW Accounts Money market deposit accounts Money market mutual funds Individual Account Payable at Death Designation Joint Account Joint Tenancy with Right of Survivorship Tenancy in Common Tenancy by the Entirety 12 Electronic Funds Transfers (or EFTs) ATM Transaction Fee: Payments levied each time an ATM is used. Electronic Funds Transfer Act Disclosure Statement Periodic Fixing Statements errors Protection for lost cards Managing money and making financial decisions are different. People ascribe strong emotions to money. 13 Get to Know Yourself Focus on Commonalties Learn to Manage Financial Disagreements Use Be Positive “I” I Statements Honest and Talk Regularly Give an Allowance Encourage Work Teach Them to Make Good Choices through Increasingly Complex Activities Talk Be About Family Finances with Children a Role Model Negotiable Instruments Law Determines what is a legally binding “IOU” or promissory note Dated check with an order to pay a fixed sum of money Signed and dated contract to pay a dealer 14 Usury Truth in Lending Law Must inform borrowers and consumers of the exact cost of credit so they can compare costs Truth Laws Dictates the maximum interest rates allowable for various categories of loans in Savings Law Requires banks to quote the interest rates they pay on deposits 15 Fair Credit Billing Law Covers charges you did not make Covers charges made by someone not allowed to use your account Co ers incorrect charges Covers How to notify billing agent of incorrect bill: | Send in writing Fair Credit Reporting Law Consumer has a right to know credit report, credit rating and credit score Equal Credit Opportunity Law Prevents discrimination on the basis of the gender or marital status of a person applying for credit 16 Fair Debt Collection Practices Law Prohibits abusive, deceptive and unfair debtcollection practices Can only contact you between 8 a.m.- 9 p.m. Cannot talk to an anyone one abo aboutt your o r debt | Can find out where you are People slip up in building and maintaining good credit when they do the following: 1. Paying high fees unnecessarily. 2. Keeping most of your excess funds in you checking account where it earns you very little interest. 3. Failing to reconcile your accounts on a regular basis. Use a free, interest-earning checking account for your day-to-day spending needs. Use high-interest savings accounts for funds you will not need for six months to about five yyears in the future. Use investments for needs that will not occur until five or more years in the future. 17 Maintain an emergency fund sufficient to cover three months of expenses. Buy certificates of deposit when saved funds will not be needed until a specific future date. Reconcile R il your accountt statements t t t monthly. thl 18
