Glow Foundation 2010

Introduction to Glow Online Sessions

AndThe Benefits of Banks: Opening and Managing Savings and Checking

AccountsGlow Foundation

2010

Glow Online Curriculum Session I

What We Will Cover in this Session

Information about Glow Foundation

Benefits of Banking

Savings Accounts (Opening an Account, Interest,

Tips)

Checking Accounts (Parts of a Check, Filling out a

Check and Deposit Slip)

Using a Debit / ATM Card

Tracking Your Spending

Protect Yourself from Fraud!

What is Glow Foundation?

Glow Foundation is a non-profit organization that helps high potential, college ready students overcome financial barriers to attend and graduate from college

We provide students with:

How Can I Benefit from Participating?

Glow’s Goal is to Help You Understand How to FULLY FUND Your College Education.

By Participating in Online Program, You’ll Have a Stronger Understanding of:

Banking Services and Money Management Tools Interest, Credit, and Credit Cards The FAFSA and Financial Aid Process How to Evaluate Loan Options How to Analyze and Compare Financial Aid Award Letters Budgeting

What Are the Benefits of a Bank?

THINK IT OVER:

1. Why would someone decide to open a bank account?

2. What are some benefits of a bank?

Benefits of a Bank

DID YOU COME UP WITH SOME OF THESE?

1. Safety (of cash from theft, fire, etc.)

2. Convenience

3. Saves Money (avoids check cashing fees)

4. Security (FDIC insured)

5. Advice of Banking Professionals

Savings Account Basics

What is a Savings Account?

Savings Account BasicsRegular Savings Money Market Certificate of Deposit

(CDs)

Minimum Balance Usually a minimum balance of at least $1000

Deposit a certain amount of money – requires a minimum amount

Low Interest rates - variable

Usually pays more interest than regular savings (variable)

Higher interest rate than a regular savings account (usually fixed)

Limited number of withdrawals – sometimes charged a fee

Usually can make limited amount of withdrawals with checks - convenient

No withdrawals - will be penalized if you withdraw money before specified date

Readily accessible No minimum length of time to have money deposited

Requires money to be deposited for a certain amount of time

Insured Not always insured Insured


What should you consider before opening up a savings account?

How Frequently Interest is Compounded

Minimum Balance

Service Fees

Convenience

Interest Rate 1

2

3

4

5


What is Compound Interest? Also do a web search for definitions!

Quarter Amount in Account

Interest Total amount

1 $1000.00 1.25% ($1000*.0125) + 1000 = $1012.50

2 1012.50 1.25% (1012.50*.0125) + 1012.50 = 1025.16

3 1025.16 1.25% (1025.16*.0125) + 1025.16 = 1037.97

4 1037.97 1.25% (1037.97*.0125) + 1037.97 = 1050.94

Saving Account Basics

Compare the Results:

Shoebox Saver(No Account)

Super Saver (Savings Account)

Year 1 $1825 $1871 ($46 more!)

Year 5 $9125 $10,366 (+$1,241)

Year 10 $18,250 $23,677 (+$5,427)

Year 30 $54,750 $127,077 (+$72,327)

Each person saved $5 a day and the Super Saver earned 5% interest compounded daily.


Some tips to SAVE MORE MONEY:

Ask yourself, “Do I NEED this?” Pay YOURSELF first before you spend any money If you get money as a gift or a bonus, save a portion

of it Save spare change and deposit it Pay bills on time Avoid check cashing stores Take lunch with you instead of eating out Carry small amounts of cash with you Use direct deposit Others?

Checking Account Basics

Checking Accounts:

Keep your money safe and accessible Help control your spending Don’t pay interest May require you to keep a minimum

balance or do direct deposit (to avoid fees)

Checks function like cash


Check-Writing Tips:

Always write in blue or black ink Write neatly Save your receipts and record your spending in

your register Initial your (small) mistakes / VOID checks with

large mistakes Avoid writing “bad” checks - you will get fined

and it’s against the law in some cases


How to Endorse a Check: When depositing a

check, you need to approve the transaction by endorsing the

back of the check. Along with your signature, you’ll write

“For Deposit only” along with your bank account

ATM / Debit Cards

What’s the difference between an ATM and debit

card?

ATM / Debit Cards

ATM Cards are used to: Deposit, withdraw, or transfer money

Debit cards can do this in addition to: Purchasing items Online banking – pay your bills, check account

balances

ATM / Debit Cards

What information is on your ATM / debit card?

ATM / Debit Cards

ATM / Debit Card Tips:

You may be charged a fee if you use an ATM that is operated by another bank

Know your balance available Be aware of what you’re buying - it’s easier to

spend more with plastic! Be careful with your Personal Identification

Number (PIN) – Never write it on your card Avoid magnets – they can de-magnetize your card Contact your bank if your card is lost or stolen!


Think about ways to track your spending and control the

money you have.

To Track Your Spending

1. Save your receipts

2. Record transactions

3. Avoid over-spending

4. Review statements

5. Compare with the bank


► Overdraft Fees! Whenever you spend more money

than you have in your account, banks will charge

you a fee which ranges from $15-$35 per overdraft. It

is better to balance your checkbook, purchase what

you can afford and manage your money effectively.

What happens when you write a check for more than you have

in your checking account?

Protect Yourself From Fraud

Do some research:

What are ways to ensure that you are keeping credit cards,

checkbooks and financial data safe at home and online?

Recap

Benefits of Banking

Savings Accounts (Opening an Account, Interest,

Tips)

Checking Accounts

Using a Debit / ATM Card


Protect Yourself from Fraud!

Homework:

Save your receipts for one week

and have them ready for you next

online session

Questions?

Alana Okamoto

[email protected]

Glow Foundation 2010

Documents

Transcript of Glow Foundation 2010