Personal Finance Unit 5: Your Money - Banking: Keeping it Safe and Secure

Automatic payments,

Automatic payments, utility companies, loan payments, and other businesses use an automatic payment system with bills paid through direct withdrawal

Bank Statements

Bank Statements Each month you will receive a bank statement from your bank detailing all transactions for a month. You will find info about your bank, when the statement and ended, a summary of account activity, types of transactions that took place, amount of money that went into/out of your account.

Commercial banks

Commercial banks For-profit companies owned by shareholders Managed by a paid board of directors elected by the bank's shareholders Offer services to anyone Owned by shareholders, customers do not have ownership, unless they own stock Profit benefits a small group of stockholders Accounts are federally insured up to 250000.

Commercial banks:

Commercial banks: for-profit institutions that offer a full range of financial services, including checking, savings, and lending

Comparing Financial Institutions, consider these factors:

Comparing Financial Institutions, consider these factors: Where can you get the highest rate of interest, where can you obtain a checking account with low or no fees, will you be able to borrow money from the institution with a credit card or another type of loan, when you need it, do you need an institution that offers free financial advice, is it insured, does the institution have convenient locations, does it have online banking services, does it have any special banking services that you might need?

Credit unions

Credit unions Nonprofit owned and controlled by their own customers, who are known as members Managed by a member and volunteer board of directors, who are elected by other members Offer services to special groups of people and maybe the employer to the church group. Must qualify of membership Owned by each credit union member, who has an equal vote Profits are returned to members in the form of lower fees and loan rates and higher interest on deposits Also insured federally insured up to 250000.

Cyberbanking

Cyberbanking, Banking through online services, the same thing as electronic banking

Direct deposits,

Direct deposits, earnings automatically deposited into bank accounts

Why is Reconciling Important?

Does it Balance? Why Reconciling is Important Lets you check for mistakes and checks you wrote, but did not enter, gives you a chance to subtract other charges that may have added, lets you add any interest that your checking account may have earned. Not all checks you have written will show up on your statement, not all checks written will always be shown, they may not have been cleared by your bank

Electronic funds transfer

Electronic funds transfer, the electronic exchange of money from one account to another through computer-based systems.

Financial Services:

Financial Services: Online banking, online brokerage, checking accounts, savings account, certificates of deposit, individual retirement accounts, savings bonds, credit cards, check cards, gift cards, payroll cards, commercial prepaid cards, auto loans, boat loans, RV loans, etc

How Thieves Steal Your Identity...

How Thieves Steal Your Identity Stealing, purse, wallet, bank statement, pre-approved credit card forms in the mail. Diverting mail - complete change of address form Dumpster diving, digging through garbage Skimming, attach a device to credit card readers

Identity Theft

Identity Theft Occurs when someone wrongfully acquires and uses a consumerś personal info and uses it

Money market account

Money market account Good interest Some check writing insured Minimum balance No interest and there is a penalty if below

Mutual savings bank

Mutual savings bank, specialize in savings accounts and mortgage loans nonprofit financial institutions that are owned by their members and organized for the benefit, offer the full range of services

Non-Deposit Type Institutions

Non-Deposit Type Institutions: Life insurance companies, these institutions also offer savings Investment companies, these companies combine your money with that of other investors in order to buy stock. Finance companies, specialize in making loans to consumers and small businesses, often to people who cannot borrow elsewhere Mortgage companies, specialize in loans for the purchase of homes

Pawn shop

Pawn shop, charge very high interest for loans based on the value of tangible assets

Payment services

Payment services - the transfer of money from your account to businesses or individuals for payments.

Phishing

Phishing, email pretending to be someone to get your personal information.

Point of the sale transaction

Point of the sale transaction, acceptance of cards at retail stores and other businesses payment of goods and services.

Pretexting

Pretexting, use false pretenses to get your info from banks, phone co, etc

When You Open a Savings Account...

When You Open a Savings Account... You need money in the account You can add or take out money at any time The bank is allowed to use your money to invest and earn profit You are paid a small amount of interest in depositing your money Your money is insured against loss

CD

Certificate of deposit The guaranteed rate of return for the time frame of CD insured Minimum requirement Possible penalty if early withdrawal

Check cashing outlets

Check cashing outlets, charge high fees, sometimes 2 or 3% just to have a paycheck or government check cashed.

Check differeal services

Check differel services, allow consumers to get a cash advance on their next paycheck, however, these short term loans are very expensive. A $200, two-week advance may cost over $30 ( with annual costs exceeding $900)

Preventing Identity Theft

Preventing Identity Theft Never give out your account info of social security number via the phone Log off websites once the transaction is done Purchase anti-virus, encryption, and firewall software Password protect your computer and phone Create strong passwords and change them often, do not store them. Use a combo of letters, numbers, and symbols. Select good security questions, with answers only you can answer Never conduct personal business on public wifi or computers Check credit reports at least once a year. Keep a copy of your credit card numbers #s and company phone #s in a safe place. Shred all documents that contain personal info or keep in a safe place Make sure youŕe using a secured site Search your name occasionally to see if your name picture or other information is being used. Don't fall for the internet of email scams

Rapid refund tax services

Rapid refund tax services, provide instant refunds when you pay to have your federal tax return prepared, however this instant refund is a loan with interest rates as high as 120%.

Recognizing Identity Theft

Recognizing Identity Theft New accounts or charges you didn't make Calls from a collection agency Being denied credit, when you believe there is no reason to be denied Missing bill/statement Incorrect information on your credit report

Regular savings advantages/dis:

Regular savings advantages/dis: Low minimum balance Easy withdrawal insured Low interest earned

Rent to own programs

Rent to own programs, opportunities to get home entertainment systems of appliances for a small weekly fee, however, the amount paid for the item usually far exceeds the cost if the item were bought in credit.

Savings and loan associations:

Savings and loan associations: traditionally specialized in savings accounts and mortgage loans, today the also offer many of the same services as commercial banks.

Spyware

Spyware, software on your personal computer that tracks you, redirects you sends popups, hacking, breaking into your computer and stealing your info

Stop payment order

Stop payment order, a notification from account holder not to honor a specific check written from their account.

FDIC

The Federal deposit insurance corporation was created by the federal government in 1933 to protect deposits in banks All federally chartered banks must participate The FDIC also administers the savings association insurance fund

The rate of return

The rate of return is the % increase in the value of your savings from earned interest

To reconcile your account

To reconcile your account is to bring your check register into an agreement with the bank statement for your account. Reconciling a Checking Account Compare check register to a bank statement Obtain the current balance from your bank statement Add any deposits that you have recorded in your check register but are not this statement Subtract any outstanding checks Compare results with the current balance in your check register The balance in your check register should be adjusted to include, deductions for service fees, additions fo, direct deposits and interest

US savings bonds

US savings bonds Good interest rate Low minimum Free from local and state taxes Lower rate of return when crashed in before the bond reaches the maturity date

What if identity theft Happens to You?

What if identity theft Happens to You? Act immediately to prevent further spending Keep a detailed record of all correspondence and phone records Contact the bank, your credit card company, and the three major bureaus and request ¨fraud allert¨