P E R S O N A L F I N A N C I A L M A N A G E M E N T P R O G R A M Banking and Financial Services.

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P E R S O N A L F I N A N C I A L M A N A G E M E N T P R O G R A M

Banking and Financial Services

B A N K I N G A N D F I N A N C I A L S E R V I C E S 2

Credit Unions and BanksCredit Unions and Banks

•Credit Unions: Not for Profit

•Banks: For Profit

•Credit Unions: Not for Profit

•Banks: For Profit

Savings and Checking AccountsSavings and Checking Accounts

•Individual– Only one person’s name is on the

account, only one may write checks•Joint

– More than one person’s name is on the account, both may write checks

•Interest or Non-Interest– Some accounts pay interest on the

balance

•Individual– Only one person’s name is on the

account, only one may write checks•Joint

– More than one person’s name is on the account, both may write checks

•Interest or Non-Interest– Some accounts pay interest on the

balance

What Is a Check?What Is a Check?

• A guarantee of the money it represents

• A legal document

• A widely accepted form of payment

• Questions to ask:– Minimum Balance? – Monthly Service

– Per Check Fee? – ATM Fees?

– Interest? – Overdraft Protection?

– Is the account insured?

Check, Debit and ATM CardsCheck, Debit and ATM Cards

•Use for Withdrawals, Deposits, Inquiries and Purchases

•Looks like a credit card

•Money comes right out of your accounts

•Can be used like a check

•Use “PIN”, Personal Identification Number

•May be fees, especially with ATM cards

•Use for Withdrawals, Deposits, Inquiries and Purchases

•Looks like a credit card

•Money comes right out of your accounts

•Can be used like a check

•Use “PIN”, Personal Identification Number

•May be fees, especially with ATM cards

Protect Your Plastic!Protect Your Plastic!

•Limit ATM use to machines enclosed and well lit

•Go to the ATM with friends at popular times

•Sign the back of your ATM card right away

•Memorize your PIN

•Don’t let anyone watch you enter PIN

•Put money away safely

•Keep track of all of your transactions

•Limit ATM use to machines enclosed and well lit

•Go to the ATM with friends at popular times

•Sign the back of your ATM card right away

•Memorize your PIN

•Don’t let anyone watch you enter PIN

•Put money away safely

•Keep track of all of your transactions

Other Banking Products and ServicesOther Banking Products and Services

•Credit Cards

•Loans (Personal, Auto, Home Mortgage)

•Life Insurance and Investments (NOT insured!)

•Money Orders, Cashier’s Checks, Notary Services, Wire Transfers, Safety Deposit Boxes

•Education

•Online Banking

•Credit Cards

•Loans (Personal, Auto, Home Mortgage)

•Life Insurance and Investments (NOT insured!)

•Money Orders, Cashier’s Checks, Notary Services, Wire Transfers, Safety Deposit Boxes

•Education

•Online Banking

Online BankingOnline Banking

•Consider:―Availability―Delays―Fees―Security

• Features Include:―Account access and

transfers―Apply for and/or

purchase products or services

―On-line bill paying services

―Links to personal finance software

Finding the Best FitFinding the Best Fit

•Convenience

•Range of Products and Services

•Minimum Deposit Requirements

•Limits on Withdrawals

•Interest

•Insurance

•Convenience

•Range of Products and Services

•Minimum Deposit Requirements

•Limits on Withdrawals

•Interest

•Insurance

The Cost of Financial ServicesThe Cost of Financial Services

•Service charges

•Check order costs

•Costs per check

•Overdraft Protection

•Service charges

•Check order costs

•Costs per check

•Overdraft Protection

FeesFees

•Non-sufficient fund check fees (NSF)

•Returned check fees

•Monthly service fees

•Fees for research assistance

•ATM use fees

•STOP payment fees

•Non-sufficient fund check fees (NSF)

•Returned check fees

•Monthly service fees

•Fees for research assistance

•ATM use fees

•STOP payment fees

Managing Your MoneyManaging Your Money

•Controlling the Cash Flow– On-line Banking

•Use a system to track transactions

•Record Confirmation Numbers

– ATMs

•Keep track of all transactions in your register

•Money taken out of the ATM DOES affect your accounts!

•Keep your receipts until transactions clear

•Controlling the Cash Flow– On-line Banking

•Use a system to track transactions

•Record Confirmation Numbers

– ATMs

•Keep track of all transactions in your register

•Money taken out of the ATM DOES affect your accounts!

•Keep your receipts until transactions clear

Keeping the Checkbook in Check…Coming Attractions

•Completing the Check

•Common Errors

•Completing the Register

•Expensive Mistakes

•Completing the Deposit Slip

•Types of Endorsements

•Funds Availability

•Clearing Procedures

•Completing the Check

•Common Errors

•Completing the Register

•Expensive Mistakes

•Completing the Deposit Slip

•Types of Endorsements

•Funds Availability

•Clearing Procedures

Sample CheckSample Check

Check Writing ErrorsCheck Writing Errors

•Illegibility

•Empty spaces

•Only filling in numbers

•Not signing check

•Not signing name as it appears

•Illegibility

•Empty spaces

•Only filling in numbers

•Not signing check

•Not signing name as it appears

Check Writing ErrorsCheck Writing Errors

•Not lining through after dollar

amount

•Initializing errors

– Void the check!

•Writing in pencil/erasable ink

•Not lining through after dollar

amount

•Initializing errors

– Void the check!

•Writing in pencil/erasable ink

Check RegisterCheck Register

Expensive MistakesExpensive Mistakes

•Not subtracting ATM fees or service charges

•Post-dating checks

•Splitting check pads between joint account holders

•Writing checks before money is in the bank

•Not subtracting ATM fees or service charges

•Post-dating checks

•Splitting check pads between joint account holders

•Writing checks before money is in the bank

Expensive MistakesExpensive Mistakes

•Not balancing monthly statement

•Not recording checks written in the register

•Addition/subtraction errors

•Not subtracting automatic deductions e.g., loan payments, insurance premiums, car payments, etc.

•Not balancing monthly statement

•Not recording checks written in the register

•Addition/subtraction errors

•Not subtracting automatic deductions e.g., loan payments, insurance premiums, car payments, etc.

Deposit Slip (front)Deposit Slip (front)

Deposit Slip

(back)

Deposit Slip

(back)

EndorsementsEndorsements

•Blank– Jane R. Smith

•Restrictive– for deposit only

Jane R. Smith•Special

– Jane R. SmithPay to the order of Robert L. Jones

•Blank– Jane R. Smith

•Restrictive– for deposit only

Jane R. Smith•Special

– Jane R. SmithPay to the order of Robert L. Jones

Funds AvailabilityFunds Availability

•First business day after deposit

–Cash

–First $100 of check

–Government, cashier, and certified checks

–Same bank checks

•First business day after deposit

–Cash

–First $100 of check

–Government, cashier, and certified checks

–Same bank checks

Funds AvailabilityFunds Availability

•Second business day after deposit–Local bank checks

•Fifth business day after deposit–Out-of-town checks

•Second business day after deposit–Local bank checks

•Fifth business day after deposit–Out-of-town checks

Clearing Procedures: Check 21Clearing Procedures: Check 21

•Bank clears checks electronically

•Banks not required to return paper checks to you

•Banks use “Substitute Checks”

•Less “Float Time”

•Bank clears checks electronically

•Banks not required to return paper checks to you

•Banks use “Substitute Checks”

•Less “Float Time”

Alternatives to Checking AccountsAlternatives to Checking Accounts

•Debit cards

•Money orders to pay bills

•Payday loans

Disadvantages are additional costs

•Debit cards

•Money orders to pay bills

•Payday loans

Disadvantages are additional costs

Couples & Money ManagementCouples & Money Management

•Who has primary responsibility?

•Separate checking accounts

•Splitting check pads

•Do what works

•Who has primary responsibility?

•Separate checking accounts

•Splitting check pads

•Do what works

Changing Financial InstitutionsChanging Financial Institutions

•Most retailers prefer or require local accounts

•Open up new account after you transfer

•Transfer DDS and automatic withdrawals

•Most retailers prefer or require local accounts

•Open up new account after you transfer

•Transfer DDS and automatic withdrawals

Consequences of Checking Account Mismanagement

•Embarrassment

•Hefty service charges

•Inability to have a checking account due to unsatisfactory history

•Embarrassment

•Hefty service charges

•Inability to have a checking account due to unsatisfactory history

Military ConsequencesMilitary Consequences

•Punishable under UCMJ Articles 123A & 134

– Maximum punishment ranging from dishonorable discharge to five years confinement at hard labor

•Other than Honorable (OTH) discharge

•A consideration when recommending for retention, duty assignments, and security clearances

•Punishable under UCMJ Articles 123A & 134

– Maximum punishment ranging from dishonorable discharge to five years confinement at hard labor

•Other than Honorable (OTH) discharge

•A consideration when recommending for retention, duty assignments, and security clearances

Impact on Credit RatingImpact on Credit Rating

•May be reported to Credit Reporting Agency (CRA)

•Impact on future credit purchases

•May be reported to Credit Reporting Agency (CRA)

•Impact on future credit purchases

Where to ComplainWhere to Complain

•Customer service representative

•Branch manager

•Bank president

•Federal and State Resources

•Customer service representative

•Branch manager

•Bank president

•Federal and State Resources

Financial Services

Resource handout

Other Sources of HelpOther Sources of Help

•Command Financial Specialist

•Fleet and Family Support Center

•Navy Legal Services Office

•Armed Forces Disciplinary Control Board

•Navy-Marine Corps Relief Society

•Command Financial Specialist

•Fleet and Family Support Center

•Navy Legal Services Office

•Armed Forces Disciplinary Control Board

•Navy-Marine Corps Relief Society

SummarySummary

•Credit Unions and Banks

•Products and Services

•ATM/Debit/Check Card Management

•Checking Account Management

•Sources of Help