UNIT 4 Finance

Checking Accounts

A checking account is a service provided by a financial institution that allows account holders to deposit and withdraw money from a federally protected account. This account allows the use of a debit card and/or checks, and there are generally no restrictions on the number of deposits and withdrawals that can be made. The rules and regulations of the account will vary from institution to institution, some may impose balance requirements while other do not, but generally, each financial institution will have three to four different types of checking accounts. Some will have more, some will have less.

Stop payment free

Checking accounts When you ask a bank to stop a payment on a check drawn on your account

Check fees

Checking accounts When you purchase your own checks pre-printed with your name and address

Insufficient funds or overdraft fees

Checking accounts When you write a check you don't have enough money in your account to cover

Annual fees

Credit cards Charged by some credit card companies for yearly use of their cards

Over-limit fees

Credit cards Going over your spending limit

Point of sales fees

Debit cards When you use your debit card as a debit card at gas stations or grocery stores.

Going Green

Decrease dependence on your incoming 'snail mail' means you have less to go through when you check your mailbox every day. When you get important documents in paper form, you may need to shred information so potential harm is diminished if someone is able to find slivers of information about you. When everything is digital you have far fewer worries over the loss of your information to potential identity thieves. Oh, and you also save the environment!

Protect Yourself Online

It is important to be careful when banking online. You do not want your safety or privacy to be breached. It is important to clear your cookies after each banking session, if you are at a public computer. Additionally, you need to make sure that your password is long enough to prevent it from easily being hacked. Never give your online account information to someone who is not an authorized signer on your account. Check your credit report regularly. These steps should protect your from identity theft.

View Your Transactions

Online banking allows you to access your account history and transactions from anywhere. This is the quickest way to check and see if a transaction has cleared your account. This can help you to find out the amount of a transaction after you have lost your receipt. It also allows you to find out about unauthorized transactions more quickly. This can help you to resolve the issues more quickly.

Transfer Money Between Accounts

Online banking also allows you to transfer money between accounts much more quickly. It is more convenient than using the automated phone service, and can save you a trip to the bank. When you apply or set up your online banking, be sure that all of the accounts you have at the bank are listed. This will make it easier to transfer money and make loan payments online.

ATM or Debit fees

Saving and checking account accessed by a debit card By your bank when you use an ATM machine. May be waived if you use your bank's own machines

Returned check fee

Savings account If a check is deposited into your account and returned for insufficient funds.

Withdrawal fees

Savings accounts Exceeding the amount of allowed withdrawals for a month

Savings Accounts

Savings accounts are meant to help you save money, hence the name. Therefore, they come with limits, balance requirements, and excessive withdrawal penalties (often could be limits of 4-5 withdrawals per month). These restrictions will vary from institution to institution, as well as, from banks to credit unions. There is also a difference between regular savings accounts and money market accounts based on balance and withdrawal allowance. It is a wiser practice to direct deposit into your checking and then transfer money you do not need into your savings as transfers into savings don't have a limit. Banks want to see a constant savings practice to prove your credit worthiness when it comes time for some kind of loan.

Monthly service fees

Savings and Checking Accounts If you don't meet certain qualifications, such as maintaining a monthly minimum balance or limits on amount of checks you can use.

Third-party ATM fees

Savings and checking accounts If you use another bank's ATM, a charge assessed by that bank.

High Yield Checking

Type of checking account You actually get some kind of interest! Your rate is often tied to your balance but usually comes with a monthly charge. Only people who keep a large balance should even think of using this as it makes little sense if your fees out-weight your interest!

Free Checking

Type of checking account No fees! Usually has some limitations such as a minimum balance or must have a direct deposit.

Regular Checking

Type of checking account Often pay a monthly or yearly charge for having an account. SHOP AROUND! DON'T GET THIS!

Pay Your Bills Online

You can use online banking to pay your bills. This will eliminate the need for stamps and protect yourself from the check being lost in the mail. Most banks will have a section in which you set up payees. You will need to fill out the information once, and then you can simply choose that profile every time you pay a bill online. If your bank will not pay bills online you may consider paying online through the company. Be careful since some of these companies may charge a convenience fee.