Personal Finance: Chapter 2 Packet Questions

Make a cash deposit at your bank

Deposit a check at your bank

Use an ATM to deposit your money

Make a mobile deposit

Use Direct Deposit

Transfer money from another account

ATM withdrawal using a debit card

Visit a bank teller to make a withdrawal

Make a purchase using a debit card

Write a check

Use online bill pay

Transfer money to another account

1. Community banks typically have LOWER fees and charges when compared to a national bank

2. Community banks typically give back and support the local community

True

1. What type of fees are there with this account?

2. Is there a fee for using an ATM? If so, how much?

3. Is there a minimum balance requirement with this account?

4. Do you offer online banking or mobile banking?

• Keeping your money safe

• More options for paying

• Easier to deal with checks

• Makes paying bills easier

• Makes a paper trail to track your money

• Ability to get cash from an ATM

• It covers up to $250,000 per person and makes sure your money is insured

• If the bank goes under, you are insured on every account up to $250,000

• Check for errors

• Check your transactions

Ending Balance = Previous Balance - Deposits + Withdrawals

• Savings accounts:

  • Earns interest

• Checking account:

  • Easy Access

  • Might have fees

  • Used with debit cards

• The younger you start, the more interest you will save/earn

He won’t earn as much interest throughout the years

Have a mobile app, make electronic deposits, and link other accounts for transfers

• Minimum balance fees, transaction fees, maximum withdrawal fees, and maintenance fees

• Should never have to pay a fee

• you can typically make a deposit into an online savings account by depositing a check online, through a mobile banking app, or by using an ATM in your online bank's network

• No physical location (all online)

• allows you to accumulate interest on funds you've saved for future needs.

• A place to hold your money

Time deposit account that pays a fixed interest rate over a period of time (30 days to years)

• You deposit money into a account while earning interest

• Overdraft: $25

• Maintenance: $5

• Out-of-Network: $1.77

• Open a checking and savings account at the same bank

• Chose a different bank (without a monthly fee)

• Keep a minimum balance

$2.50

happens when savings account holders withdraw over the federal limit, which is six free withdrawals and transfers per month.

charged when a payment or withdrawal from your bank account exceeds the available balance and your bank covers the transaction as part of an overdraft protection service

False

May be a way to avoid the payment recipient from knowing your low bank balance

• Charged when checks or electronic payments cause your account to go below $0

• This is only charged if no other account protections are in place

• The average fee is around $25.

• All transactions will be declined

• A service that automatically transfers money from a linked savings account when a transaction would cause your account balance to go below $0

• Transactions are approved and money is transferred from your linked account

• There is sometimes a fee but it will typically be smaller than other options

• Charged when any transaction causes your checking account balance to go below $0

• Transaction to be approved and your account will go into negative territory

• The average fee is around $30 per transaction

• Many banks have a limit on the number of these transactions that you can be charged per day

• You can opt out of this outcome

lets you know when your bank account balance drops to a predetermined amount, which could be $20, $500 or another selected amount

lets you know when your paycheck hits your account, which can help in scheduling bill payments and budgeting.

one that notifies consumers when there’s a change in their account status that’s unusual

goals you would like to achieve within two months

goals you would like to achieve from within two months to three years

goals you would like to achieve three or more years out

20%

• 401ks

• 549 Account

Gives your money time to grow

False

50%- Essentials  30%- The “fun bucket”  20%- Financial Goals

It doesn’t work well with higher income earners

As soon as you receive your paycheck, put a fixed amount or percentage of your money directly into your savings.

Your money will be transferred automatically and guarantees you will be contributing to your savings.

Deposit money into your savings account before spending on anything else.

So they are able to control where there money goes each month

If you lose your job you still want to be able to pay expense while unemployed

So you aren’t tempted to touch it

Pay $500 deductible after a car accident

32%

People will spend more money when paying with credit cards because they think of it at as a steal or bargain. They will pay it off later

• People living Paycheck to Paycheck don’t have a good financial plan or ways to manage their money. Holidays make more people live paycheck to paycheck

• Spending your whole paycheck on necessities causing them to live paycheck to paycheck

• The price of the products goes up and you get them same product for more money.

  • 1950: have $5- buy 3 burgers

  • 2020: have $5- buy 1 burger

They don’t increase at the same rate

Investing your savings/money

• Turn card on/off or report lost

• Manage balance or fraud alerts

• Deposit checks

Apple Watch app integration

• Easier bill payments. You can send payments using your bank’s online banking platform

• 24/7 account access. Whether you’re on vacation or it’s the middle of the night, you can manage your banking

• Simpler fund transfers. It’s easy to move funds between your accounts, such as from checking to savings, using online banking.

• Better access to bank records. Whether you need banking records for tax purposes or personal records, you can download statements and transaction records to print them at home.

• Improved visibility of account balances and transactions. Knowing your account balances is always a few clicks away.

• Ability to sync your accounts with your apps. Online banking allows you to transfer information from your accounts to Quicken, Microsoft Money, Microsoft Excel, and other applications.

• Use of mobile apps. Many banks allow you to use your mobile devices for online personal banking.

Bill pay is a service offered by many banks and credit unions that lets you set up automatic payments for bills. If you juggle rent or a mortgage, cable and electricity bills, credit card payments and more, online bill pay can save time and help you avoid late fees

So you don’t have to worry about missing a payment

Landlord, Water company, Electric company, Credit card, Car payments

A payment made that is put into a bank account electronically

Account number, bank routing number, or a voided check

• Not having to go to the bank

• Saving time and paper

• Getting immediate access

With a public network, you can’t be totally sure who sees what you send online unless each page you visit is encrypted.

If they see a purchase or transfer they didn’t make, customers can protect their account against further fraudulent activity by reaching out to the bank immediately.

Cash, paper, and coin currency aren't used for financial transactions. Instead, all transactions are electronic, using debit or credit cards or payment services like PayPal, Zelle, Venmo, and Apple Pay.

• Exposes your personal information to a possible data breach

• The more information you have floating around online, the more likely it is to wind up in malicious hands

• the poor and unbanked will likely have an even harder time in a cashless society. If smartphone purchases become the standard way to transact, for example, those who can't afford smartphones will be left behind.

• They might not have access to a bank account/debit card