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Selecting a Financial Institution:
Checking and Savings Accounts

Objectives for this Lesson:

* Include in partcipant's packet.

**Instructors need to visit or research at least three local financial institutions and gather materials (brochures, electronic files or applications) that include details on services provide, hours available, membership requirements, etc. You also will need to gather information from at least three institutions that explain their checking and savings accounts options, including fees and disclosures associated with accounts. This information is often available on-line.

Resources for this Lesson:
Key Points For Educator: What to Say For Learner:
Slide #1: Selecting A Financial Institution:
Checking and Savings Accounts Introduce yourself Participant Introductions
Slide #2: Objectives:
  • Identify Types of Financial Institutions
  • Learn the Benefits and Uses of Checking Accounts
  • Discover Options for Savings Accounts

Explain: By the end of this lesson, you will be able to determine the types of financial institutions, learn the benefits and uses of a checking account and discover your options for opening a savings account.

Question: With what financial institutions are you familiar?

Instructor Note: Create a list of the institutions listed by participants.

 Discussion: Participants share financial institutions with which they are familiar, as instructor creates a list.
Slide #3: Financial Institutions:
  • Banks
  • Credit Unions
  • Savings & Loan Associations

Explain: A financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial supervision of a government authority. Examples of institutions include banks, credit unions or savings and loan associations.

Question: Why would you keep your money in a financial institution?

 Discussion: Participants share why one would keep money in a financial institution.
Slide #4: Advantages:
Financial Institutions Provide:
  • Safety
  • Convenience
  • Lower Costs

Explain: Reasons to keep your money in a financial institution include:

  • Safety of your money from theft or other loss
  • Convenience, as you can get your money quickly and easily.
  • The cost is probably lower than using other businesses to cash your checks.

Question: There are lots of people who work in financial institutions. To whom do we talk when we need help?

Instructor Note: Create a list of those the participants list.

Discussion: Participants answer, as instructor creates a list.
Slide #5: Who To Talk To?
  • Branch Manager
  • Customer Service Representative
  • Account Officer
  • Loan Officer
  • Teller
 Explain: Here are the employees that most of us come into contact with:
  • Branch Manager - Supervises the bank operations.
  • Customer service representative or account officer - Helps you open an account and answers general questions.
  • Loan Officer - Takes loan applications and helps you through that process.
  • Teller - The main contact at the bank; takes deposits and cashes checks.
  
Slide #6: Services Provided
  • Automated Teller Machines (ATM)
  • Cashier's Check
  • Certified Check
  • Checking Account
 Explain: Financial institutions provide numerous services. Basic services include:
  • Automated Teller Machines (ATM) - An easy way to deposit or withdraw money 24 hours a day.
  • Cashier's Check - A check guaranteed not to bounce, made out to an institution.
  • Certified Check - A check guaranteed not to bounce.
  • Checking Account - An account that lets you write checks to pay bills.
Question: Can you think of any other services a financial institution provides? 		Discussion: Students share other services institutions provide.
Slide #7: Services Provided (cont.)
  • Debit Card
  • Deposit
  • Loans
  • On-Line Banking
 Explain: There are many other services provided by financial institutions. Let's discuss a few more.
  • Debit Card - Also called a check card. Card use directly withdraws money from your account.
  • Deposit - Putting money into your account. One type of deposit is a direct account deposit. Your money (e.g., paycheck) is directly deposited into your account. It's generally faster and easier.
  • Loans - Available from your financial institution. There are different types, and they will have fees and interest charges.
  • On-line Banking - Allows you to conduct your financial transactions by using a computer and the Internet.
Slide #8: Services Provided (cont.)
  • Non-deposit Products
  • Savings Accounts
  • Telephone Banking
  • Wire Transactions
  • Withdrawal
  • Fees
  • Non-deposit Products - Many banks also offer non-deposit products and services not insured by the FDIC. Stocks, bonds and mutual funds are examples.
  • Savings Accounts - Interest is earned on the money deposited in the account.
  • Telephone Banking - A telephone service that allows you to check account balances, transfer money between accounts, and obtain account history of deposits and withdraws.
  • Wire Transfer - A method of electronically transferring money from one bank to another.
  • Withdrawal - The process of taking money out of your account.
  • Fees - All financial institutions charge fees for their services. Fees and services vary.

Instructor Note: Distribute Choosing A Financial Institution Work Sheet and information from at least three institutions for the participants to compare. Discuss the criteria on the worksheet that should be used when comparing institutions.

Explain: Remember, financial institutions offer more services than check-cashing. When looking for a financial institution, use the Choosing A Financial Institution Work Sheet to help you choose a financial institution that is right for you.

Activity: Choosing A Financial Institution Work Sheet and gathered information on financial institutions. Students will compare the different institutions and determine what advantages and disadvantages each offer using this work sheet.
  • Practice Self-Control.
 Practicing self-control can sometimes be a slow process. It is important that you decide what you are willing to give up, and then set some goals for yourself. If you are not willing to give up your eBay shopping today, then consider giving up a movie one or two nights a month. Set a goal to only go to the theatre one time each month rather than every weekend.
  • Start Today!
 Finally, don't wait until tomorrow to start spending your money more wisely. Start today!
Explain: Taking control of your spending leaks requires determination and a commitment. This contract helps you identify where your spending leaks are and allows you to put your goals in writing. Completing this contract will help you stick to your goals and help you to control your spending leaks. Practice it daily. Do something every day to reach your goal.
Good money management means getting the most for your money. Look at your spending leaks today. Are you getting the most for your money?		 Activity: Contract Plan to Reduce Spending Work Sheet
Slide #9: Checking Accounts
  • They allow you to write checks to pay bills and buy goods.
  • The financial institution takes money from your account and pays the person or agency named on the check.
  • You can deposit and withdraw money from your account.
  • The financial institution sends you a monthly statement.
  • Checking accounts help you track your income and expenses.
 Transition Statement: Let's talk about two of the major services financial institutions provide: checking and savings accounts.
Question: Beginning with checking accounts, what do you know about checking accounts?

Explain: Checking accounts are a great way to manage your money.

Instructor Note: Highlight the four points on slide #3. Bullet points will appear on slide with a second mouse click.

 Discussion: Participants share what they know about checking accounts
Slide #10: Checking Account Benefits
  • Convenience
  • Cost Savings
  • Record Keeping
  • Safety
 Instructor Note: Highlight the points on Slide #4.
  • Convenience - Quick and easy access to money that takes the place of carrying cash.
  • Cost Savings- Check-cashing is usually free.
  • Record Keeping -Tracks your checks and provides records of when they are cashed.
  • Safety - Large amounts of money are kept safely in a financial institution and insured.
Slide #11: Choosing an Account
Compare your Options
  • Read the Materials & Disclosures.
  • Determine Account Names and Fees Included.
  • Ask Questions.
  • Find the Account That Best Meets Your Needs.
 Explain: When choosing a checking account, the first thing you need to do is compare your options. To determine what you need in a checking account, familiarize yourself with the different options available and the fees involved.
  • Before making a decision, take the time to read the materials and disclosures.
Activity: Distribute at least three examples of Checking Account materials that include disclosures and fees.
  • Keep in mind that banks sometimes refer to these accounts and fees by different names.
  • The financial institution can explain all possible fees and charges.
  • Understand which checking accounts best fit your needs.
 Activity: Gathered information on Checking Accounts. Students will view examples of at least three checking account options. A comparison is done later in this lesson
Slide #12: Checking Accounts
Convenience Considerations:
1. How many checks do you think you will write every month?
2. Do you want a bank that is close to your home or work?
3. What are the bank's hours of operation?
4. Will you use the ATM often?		 Explain: These questions might help you determine your needs.

Instructor Note: Read the questions for convenience and cost (Slides #6 – #9) considerations. Encourage questions and comments as you highlight each question. 		Participants consider the questions, ask questions and share comments as each consideration is discussed.
Slide #13: Checking Accounts
Convenience Considerations:
5. Does the bank have ATMs close to where you live or work?
6. How often do you plan to visit the bank to use teller services?
7. What other bank services are important to you?
Slide #14: Checking Accounts
Cost Considerations:
1. How much money will you keep in the account?
2. Will you be charged for writing extra checks?
3. Are you willing to pay a monthly fee?
4. If so, how much? 		Explain: Cost considerations also are important.
Slide #15: Checking Accounts
Cost Considerations:
5. Will you be charged to use your bank's ATM?
6. Will you be charged for using other banks' ATMs?
7. Will you be charged for using teller services?
8. Are there ways to avoid paying fees?
 Instructor Note: After highlighting all the questions, distribute Choosing a Checking Account Work Sheet. Using the checking account information from at least three financial institutions distributed earlier, compare the options using this worksheet.

Explain: This work sheet will help you choose the checking account hat is right for you. Compare your needs with what each account has to offer. 		Activity: Choosing A Checking Account Work Sheet. Students will compare the three checking account options and determine which account best meets their needs.
Slide #16: Opening an Account
Financial Institutions Need:
  1. Picture Identification
  2. Social Security Number
  3. Deposit
Financial Institutions Will:
  1. Perform an Account Verification
  2. Complete a Signature Card
 Explain: Once you select a checking account that meets your needs, there are a few things the financial institution will need to open your account.

Instructor Note: Highlight the needs of financial institutions (Slide #10).

Explain: With this information, a financial institution will begin the process with these two steps.

Instructor Note: Highlight the two steps financial institutions take (Slide #10).
Slide #17: Writing Checks
  • Do you have the money?
  • Record Each Check in your Check Register
  • Use Black or Blue Ink
  • Write Clearly
 Explain: Opening a checking account allows you to use checks. There are a few steps to remember when writing checks:
  • Before writing a check, make sure you have enough money in your account. It is important to record every deposit and withdrawal in your check register, so you can rely on the amount shown.
Instructor Note: Highlight points on Slide #11.

Explain: Let's take a few minutes and discuss the steps taken when writing a check.
Activity: Distribute Writing a Check Work Sheet and Practice Checks Work Sheet. Highlight the six areas to complete when writing a check (listed in the worksheet). Provide the following two examples on the board for participants to use as practice in writing checks.

ABC Grocery Store - $39.46 - Food Purchases
ABC Bank - $678.52 - Mortgage Payment 		Activity: Participants will view the Writing a Check Work Sheet while areas are explained. Participants will practice writing two checks.
Slide #18: Adding Money to Accounts
  • Direct Deposit
  • Deposit Slips
 Explain: To add money to your account, you need to make a deposit. There are two types of deposits:
  • Direct deposit from your employer or a government agency to your account.
  • Personal deposit you make to your account.
When you make a personal deposit, you will have to complete a deposit slip.
Activity: Distribute the Practice Deposit Slip Work Sheet.

Explain: Deposit slips are fairly simple. You include the date and, if you will receive cash back, a signature. You then indicate the type of deposit (check, cash or coin) and amount on the right-hand side of the slip, and total your deposit. 		Activity: Participants view the Practice Deposit Slip as it is explained.
Activity: Let's practice using these two examples.

Example #1 Deposit:
$237.98 - Check #333

Example #2 Deposit:
$50.00 - Check #455
$32.80 - Cash
 Activity: Participants practice completing two deposit slips using the two examples.
Slide #19: Check Register
  • Check Number
  • Date
  • Description of Transaction
  • Payment/Debit (-)
  • Fee
  • Deposit/Credit (+)
  • $ Balance
 Explain: Any time you write a check or make a deposit, it is very important to record this information in your check register.
Activity: Distribute the Check Register Work Sheet and the Practice Check Register. Highlight the seven steps listed on the work sheet. Request that participants practice completing the blank check register using the four examples above for checks and deposits. Activity: Participants will view the Check Register Work Sheet as steps are highlighted. Participants will practice completing a check register using the examples provided for checks and deposits.
Slide #20: Monthly Statements
Include these Transactions:
  • Checks written that have been cashed in the last month.
  • Withdrawals and deposits made in the last month.
  • Any fees charged.
  • Statement balance.
 Explain: Each month you will be receiving your checking account statement. The statement will include a listing of all transactions that occurred within that month.
Activity: Distribute the Checking Account Statement Work Sheet.

Instructor Note: Highlight transactions on Slide #13.

Explain: When you get your monthly bank statement, there usually will be a difference between the statement balance and your check register balance. 		Activity: Distribute Checking Account Statement Work Sheet.
Slide #21: Reconciling Accounts
Differences Can Be:
  • Checks Not Cashed
  • Deposits Not Cleared
 Explain: Reconciling your account means finding those differences which are usually checks that have not been cashed or deposits that have not cleared your account as of the statement cutoff date.

Balancing your checkbook refers to keeping your check register updated. Reconciling your checkbook is just another way of making sure you know how much is in your account. This work sheet can help you.
Activity: Distribute the Reconciling Your Account Work Sheet and the blank Reconciling Your Checking Account Work Sheet. Discuss the four steps explained on the first work sheet, which explains the process of reconciling an account. Activity: Discuss the four steps on the Reconciling an Account Work Sheet. Use the Reconciling Your Checking Account Work Sheet at home to balance personal accounts.
Slide #22: Account Errors
Letters should include:
  • Your name
  • Your account number
  • Explanation of error
  • Dollar amount of error
  • Date error occurred
Notice must be received no later than 60 days after the date of the statement with an error. 		Explain: If you find an error on a statement, you should call, write or go to your bank to have the error corrected. After reporting the error, it is a good idea to follow up by writing a letter.

Instructor Note: Highlight slide #15.
Slide #23: Bouncing A Check
  • Might cost a fee ($10 -$30)
  • Additional checks written may not be paid.
  • Negative activity reported, making it difficult to cash checks or open accounts.
  • Account may be closed.
  • Additional consequences, determined by each state.
 Explain: It is important to keep a correct balance in your checkbook. If you write a check without enough money in your account to pay the check, there are several consequences.

Instructor Note: Highlight Slide #16.

Explain: Additional consequences might include jail time determined by each state.
Question: Do you have any questions about checking accounts?

Transition Statement: Financial institutions not only offer many options for checking accounts, they also have a variety of savings accounts available. 		Participant questions.
Question: What are some advantages of having a savings account?

Explain: There are many advantages of opening a savings account. Savings accounts allow you to set aside funds for emergencies, large purchases and future plans. They are also a safe way to invest your money and earn a small amount of interest. 		Discussion: Participants share advantages of having a savings account.
Slide #24: Savings Accounts
  • Savings Accounts Earn Interest
  • The amount of interest earned depends on the Annual Percentage Yield (APY)
 Explain: Savings accounts are an important part of your financial planning. Savings accounts earn interest on the money you have in the account. The amount of interest depends on the annual percentage yield (APY). APY is the amount of interest you will earn on a yearly basis expressed as a percentage. The APY includes the effect of compounding (For more information about compounding interest refer to the Building Savings: How Your Money Can Grow section of Money Management).
Slide #25: Types of Savings Accounts
  • Statement Savings Account
  • Passbook Savings Account
  • Club Account
  • Money Market Account
  • Certificate of Deposit (CDs)
 Explain: There are at least five types of savings accounts. It is a good idea to compare the characteristics of the different accounts. For example, banks might require you to have a certain balance to open an account, earn interest or avoid fees. This might be called a minimum balance.
Question: These are at least five types of savings accounts. What do you know about these, beginning with statement savings accounts?

Instructor Note: Highlight the main differences between the savings accounts:
  • Statement savings and passbook savings accounts are similar. They both earn interest. The difference is in the recordkeeping. With a statement savings account, you receive a quarterly statement. With a passbook savings account, all transactions are recorded in a passbook. You take your passbook to the bank when making transactions and the teller updates your account information.
  • Club accounts are for saving for a specific purpose, such as a vacation or a holiday. They usually require regular deposits.
  • CDs and Money Market accounts generally earn higher interest rates and require higher minimum balances. CDs are held for a fixed term. Money market accounts do not have fixed terms. You can make deposits and withdrawals.
Explain: As you can see, it is important that you choose the right type of account when you start saving.

When looking for an account, use this work sheet to help you determine which account is best for you. You will need information from financial institutions to compare the different types of accounts. 		Discussion: Participants share what they know about each of the savings accounts. Instructor highlights any of the main differences the participants do not discuss.
Instructor Note: Distribute Choosing A Savings Account Work Sheet and information from at least three savings products. Activity: Choosing A Savings Account Work Sheet. Compare the different savings products provided.
Slide #26: Summary
  • Identified Types of Financial Institutions
  • Learned the Benefits and Uses of Checking Accounts
  • Discovered Options for Savings Accounts
 Lesson Summary: Congratulations! You have completed Checking and Savings Accounts in this Money Management series of classes.

We've identified types of financial institutions, learned the benefits and uses of checking accounts, and discovered options for savings accounts.
Question: Are there any questions? Participant questions.

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