Basics of Banking in the U.S.

Welcome!

The Advantages of Having a Bank Account
The Different Types of Bank Accounts
How to Choose a Bank
How to Open a Bank Account
Checking Basics
ACTIVITY: Check Writing
Overdraft
Returned Checks
The Difference Between Debit vs. Credit
Wire Transfers
Electronic Banking
What to do: Lost Check Card, Checks, or Unauthorized transactions
Federal Protection on Bank Accounts
Establishing Credit
Identity Theft
Bank Scams
Banking Tips
Agenda

Management of finances and budgeting
Cash, check writing, debit card, credit card, online bill payment used to make purchases and pay for bills
Secure deposits of financial aid awards, loans, paychecks, & wired funds
Convenience of Visa and MasterCard
Some of the negative side of cash
Advantages of a Bank Account

Types of Bank Accounts
Checking Account
Convenient for day-to-day expenses
Checks, debit card
ATM (Automatic Teller Machine)
PIN (Personal identification number)
Withdrawal limit
Monthly statements, online / phone access
Savings Account
Interest
Transfer to checking

How to Choose a Bank
Look Around
Personal needs
“ Student” account
Compare Costs
Minimum original deposit
Minimum balance
Fees

Questions to Ask
Do you offer a student account?
If yes, what features are included in the student account?
Do I need a Social Security number to open an account? What else can I use?
What is the minimum amount I need to deposit to open up an account?
What is the minimum balance I need to keep in my account to avoid fees?
What ATM can I use besides your banks?
Are there ATM fees?
What other fees does the bank charge?
Are there ways to avoid or lower these fees?
Is there a maximum amount of checks you can write a month?
How long does the bank take to clear a check?
Where are your banks located?
Do you provide wire transfers?
What is the interest rate on the bank account?

How to Open an Account
Visit a local bank / local bank reps during international welcome week
Each bank has different requirements
Items to bring:
Social security card*
Passport
Funds to deposit
One other form of I.D.
Student I.D.
Driver’s License / State I.D.
Visa
*Some banks might not require a social security number to open an account, but can use another form of I.D. such as ITIN – Individual Taxpayer Identification Number, check with each bank.

Checking Basics
A Check Tells the Bank
How much of your money you want to transfer
When you want to transfer it
To whom you want it to pay to
Check Writing Tips
Use dark ink when writing checks; never use pencil or erasable ink
Write clearly
Always start at the far left, so extra numbers cannot be written in
Keep your checks in a safe place
Check Protection
Lost or stolen, contact bank
“ Stop” payment

How to Write a Check
Address: Your U.S. address should be pre-printed on your checks.
Date Line: Write the date that you write the check.
Payee Line: Write the name of the person or business to whom the check is for.
Amount Field: Starting at the far left box, write the amount of the check in numbers.
Dollars Line: Starting at the far left, write the dollar amount of the check in words and the cents as a fraction of 100. Draw a line in the remaining space.
Drawee Bank: The bank or financial institution should be pre-printed on the checks.
Memo Line: Write down the purpose of the payment.
Signature Line: Sign your name as it is printed on your checks.

How to Fill Out a Check Register
Check number or text for check/debit card transaction.
Date of the check or transaction.
The individual or business who the payment was for.
The amount of the payment/debit.
The amount of the deposit /credit.
The balance of your account. Subtract payment/debit amounts from the previous balance or add deposit/credit amounts to the previous balance.
6

Activity Time!

Overdraft
When a purchase or payment is made from a checking account when there isn't enough money in the account to cover the charge.
Banks usually will cover the amount, but will charge an overdraft or NSF (non-sufficient fund) fee around $20 - $30.
Each additional transaction made with insufficient funds, will be charged an additional fee.
For example, if you wrote two personal checks for $100, but you only had $75 in your account, you would then be charged two overdraft / NSF fees when the checks were processed. If the fee was $25, you would have an account balance of negative $175.

Overdraft
Bank overdraft protection plan
Opt in / opt out bank’s overdraft practices
Permission to apply the bank’s overdraft practices
Applies to everyday debit & ATM transactions
Doesn’t cover checks or automatic bill payments
Contact your bank to opt in /opt out
Opt out – debit card could be declined if out of money

Returned Checks
Checks that bank denies
Reasons vary
Not enough money in the account
A stop payment on the check
The check is too old to honor – 6 mo.
The check was improperly written
As a check writer this means that your bank will not pay the person or business you wrote the check to. Also, many times if the check was to a business, the business will charge you a return check fee in addition to the original amount owed.
If you received the check, a returned check is a check that you won’t get paid on. You can contact the person or business who you received the check from to see about arranging another form of payment.

Debit vs. Credit DEBIT CREDIT Requires PIN to be entered Requires signature Can get cash back N/A N/A Possible rewards from Visa/MasterCard Both transactions will be deducted exclusively from your checking account

Wire Transfers
Wire transfers are electronic funds transferred from one person or institution to another.
A wire transfer can be made from one bank account to another account, either within a single bank or across different banks.
Wire transfers can be completed at most banks and is done for a fee usually from both the sending and the receiving bank. However, if it is within the same bank, the fee may be waived depending on the bank.
The fee can vary from a set amount to a percentage.
You may send and receive transfers in U.S. dollars; although certain banks are able provide foreign money exchange services.
If you send money to other people on a regular basis, you can also set up repetitive wire transfers.

Electronic Banking
Convenient
Check your balance
View online statements
Pay bills
Transfer funds
Dispute an unauthorized charge
And more!

What to Do: Lost Debit Card, Checks, Unauthorized Transactions
Contact your bank as soon as possible by phone
Stop authorization of transactions and issue a new card and checks
The longer you wait to report lost debit card, the more money you might be responsible for.
If you report an ATM /debit card missing before it's used without your permission, the EFTA (Electronic Fund Transfer Act or Regulation E) says the card issuer cannot hold you responsible for any unauthorized transfers.
If unauthorized use occurs before you report it, your liability under federal law depends on how quickly you report the loss.

What to Do: Lost Debit Card, Checks, Unauthorized Transactions
For example, if you report the loss within two business days after you realize your card is missing, you will not be responsible for more than $50 for unauthorized use.
However, if you don't report the loss within two business days after you discover the loss, you could lose up to $500 because of an unauthorized transfer.
You also risk unlimited loss if you fail to report an unauthorized transfer within 60 days after your bank statement containing unauthorized use is mailed to you.
Additional information: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre04.shtm
www.fdic.gov/regulations/laws/rules/6500-3100.html

Federal Protection on Accounts
Federal Deposit Insurance Corporation (FDIC)
Created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s
Since the start, no depositor has lost a single cent of insured funds as a result of a bank failure.
Insures deposits in banks and thrift institutions for at least $250,000
Most banks are FDIC insured to stay competitive
Additional information: www.fdic.gov

Establishing Credit
Credit is linked to Social Security number
Credit score a number representing the “creditworthiness” of a person, the likelihood that he/she will pay her debt
No credit history = no credit score.
International students may have a difficulty obtaining credit card to start building credit
Ask bank about possible options – secure line of credit
More information: www.federalreserve.gov/creditreports/

Establishing Credit
Good credit can help students qualify for items such as:
Cell phone, renting an apartment, and more
Loans: personal, car, home
Credit score - Higher is better. Increases likelihood of approval and getting better interest rate and conditions. Information used:
the number and type of accounts you have (credit cards, auto loans, mortgages, etc.);
whether you pay your bills on time;
how much of your available credit you are currently using;
whether you have any collection actions against you;
the amount of your outstanding debt; and
the age of your accounts.

Identity Theft
Someone assumes your identity to perform fraud or other criminal acts
Variety of sources to get information:
Stealing your wallet
Going through trash
Accessing credit or bank accounts
Looking for social security number and other identifying information such as birthday, PIN, account numbers, etc…
Used to apply for credit cards, access accounts, etc..
Be cautious
Additional information:
www.ftc.gov/bcp/edu/microsites/idtheft/

Identity Theft Prevention Tips
Never throw away ATM receipts, credit statements, credit cards, or bank statements in a usable form. Tear or shred these items.
Never give your check card number over the telephone unless you make the call.
Carefully review your bank account / credit card statements frequently and notify your bank of discrepancies immediately.
Keep a list of telephone numbers to call to report the loss or theft of your wallet, credit cards, etc.
If you have a Social Security number, review a copy of your credit report at least once each year. Notify the credit bureau in writing of any questionable entries and follow through until they are explained or removed.

Bank Scams: “Phishing” Emails
Fictitious emails that seem to be from trusted companies, financial institutions —even government agencies — and they attempt to obtain confidential information from you.
Social Security number, PIN, passwords, account numbers and other info can be obtained by replying to the email or by linking you to a legitimate looking website to enter your personal information.

Bank Scams: “Phishing” Emails
Lessons:
Don’t give out personal information over the phone, through the mail, or online unless you initiate the contact or know the caller.
With e-mail, do not respond to any email asking you to “verify your account information.” Banks will never ask you to verify your PIN, Social Security number, or other private information via e-mail.
If you are ever in doubt about a message, contact the company, financial institution, or government agency.

Automated Voicemails or Real Phone Calls
Phone messages or calls saying something similar to your bank’s debit card has been locked. Then, press a number to reactivate account. Finally, enter bank account number and PIN.
Lesson:
Again, never give any number, punched in or otherwise, to someone over the phone. If you get one of these automated calls, hang up, call you bank and ask them if the calls are legitimate.

Bank Scams: Fake Checks
It may start with someone offering to buy something you advertised for sale, pay you to work at home, or give you an advance on a sweepstakes you supposedly won.
Stranger sends the victim a check and has the victim cash the check, then wire some of the money from the check in return.
The checks sent to victims are forgeries, but they’re so realistic that even bank tellers may be fooled.
By the time the checks bounce, the victims have already wired the money to the crooks. Because bank customers are responsible for the checks they deposit, the victims of these scams are left to repay the bank the money they withdrew against the bad check.

Bank Scams: Fake Checks
Lesson:
If someone you don’t know wants to pay you by check but wants you to wire money back, it’s a scam. Don’t ever agree to cash a check for someone and wire or send some of the cash back to the person.

Banking Tips: General
Whenever possible, keep an eye on your debit card when doing a transaction. Ensure that you get your card back after every purchase. If any activity during the transaction concerns you, call your bank.
Always check sales receipt for the correct purchase amount before you sign them, and keep copies of your receipt and ATM receipts. Always check your billing statement and verify the amounts of your purchases.

Banking Tips: General
Change your passwords and PINs regularly. Don’t write your PIN number on your card, or anywhere else that someone might see it or find it.
Remember to log-out every time you access your bank account online.
Don’t “save” your password on a shared computer, (example in the school computer lab).

Banking Tips: ATM
Do not give an ATM PIN number or online banking password to anyone, including close friends or roommates.
When using an ATM or making a payment, be aware of the behavior of those around you and report any suspicious acts to the bank.
Position yourself so that others cannot see you entering your PIN.
Remember there are several types of ATMs. Some require that your card be inserted for the entire transaction while other scan your card and return it immediately. Follow the instructions on the screen carefully, and do not walk away until you have completed your transaction and the screen indicates it is ready for a new customer.

Banking Tips: Checks
Secure and lock up all extra checks you are not using.
When a check book has been received in the mail, check for any tampering of the envelope, and that all the checks are in numerical order.
Do not give a check without an amount written in to anyone, signed or unsigned.
Know your banks policy when checks “clear”, meaning once you deposit the check, how long until you can actually use the money
Additional banking tips:
www.cnb.com/Business/checkingSavings/notice.asp

ASUU Personal Money Management Center
Want more information about banking, or other personal financial topics?
The PMMC is University resource to help you with your personal finances. You can schedule a meeting to discuss your financial concerns.

Schedule an appointment soon! It’s free for students!
Union, room 317
801.585.7379
Email: [email_address]
Website: asuupmmc.utah.edu
ASUU Personal Money Management Center

Workshop Conclusion
ANY QUESTIONS?
Please fill out the workshop evaluation form!
THANKS & GOOD LUCK EVERYONE!
Follow-up questions or feedback email: k.t.nguyen@utah.edu

Basics of Banking in the U.S.

by Kim Nguyen

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Basics of Banking in the U.S. Presentation Transcript