Fifth Third Bank, Member FDIC.

Eisenhower High SchoolSeptember 15, 2013

Fifth Third Bank, Member FDIC.

Fifth Third Bank, Member FDIC.

Banking Basics

Overview • Choosing a Bank• Understanding Debit Cards• Tracking Your Account Balance• Balancing Your Checkbook• An Overdraft Scenario

Fifth Third Bank, Member FDIC.

Choosing a Bank

• Research local bank websites. • Select a bank with the most ATMs in your proximity.• Look for banks that can make it even easier for you to

bank. - Online Banking - Online Bill Pay - Email Alerts - Mobile Banking - Free Checking - Savings Account - Lowest or Free Transaction Fees

• Ask parents and friends.

Fifth Third Bank, Member FDIC.

Understanding Debit Cards

• Debit cards work like cash or a personal check. • Debit cards offer a quick way to pay for groceries, gas,

etc. • With debit cards, you pay now. With credit cards, you pay

later.

Fifth Third Bank, Member FDIC.

Debit Card Advantages

• It’s easier to get than a credit card, since it is attached to your checking account.

• It’s more convenient; you don’t have to carry cash or a checkbook.

• You don’t pay interest charges, because the money comes directly out of your checking account.

• Purchase protection.

Fifth Third Bank, Member FDIC.

Debit Card Tips

• Keep your debit card safe and secure. • Make sure you have enough money in your account to

cover purchases made with your debit card. • Keep track of all your debit card transactions. • Memorize your debit card PIN; don’t write it on your card

or keep it in your purse or wallet.

Fifth Third Bank, Member FDIC.

Tracking Your Account Balance

• It’s important to keep track of your account balance because you could “bounce” a check and/or have an overdraft on your account. - What is overdraft? - What are insufficient funds? - What happens if a check is returned?

• Write down all your debit card purchases in your checkbook register.

Fifth Third Bank, Member FDIC.

A Tale of Two Balances: What Is Your Actual Balance? Tracking balances can be tricky, especially if you use a debit card. Some merchants (gas stations, restaurants, etc.) only authorize a small portion of your total bill at first. Then, several days later, they authorize the rest. That delay can make your available balance look bigger than it really is.

$100.00

Gas - $20.00 Lunch - $7.00Tip - $1.00

Available Balance $92.00The Actual Balance: $72.00

(How can that be?)

Fifth Third Bank, Member FDIC.

A Tale of Two Balances: What Is Your Actual Balance?

• The gas station only pre-authorized the debit card transaction for $1.00, rather than the full $20.00.• The café authorized the amount of the bill ($7.00), but did not include the $1.00 tip. • Therefore, while you only have $72.00 left in your account because you spent $28.00, your statement balance will show $92.00 until the purchases are posted to your account.

Gas - $1.00 Lunch - $7.00

Available Balance $92.00

Fifth Third Bank, Member FDIC.

So, to Summarize:

It is up to YOU to keep a register of your account to know what the accurate balance is at any given time.

$100.00

Gas - $20.00 Lunch - $7.00Tip - $1.00

Actual Account Balance $72.00

Fifth Third Bank, Member FDIC.

Balancing Your Checkbook

Five Reasons You Should Balance Your Checkbook 1. You might have made a mistake. 2. You forget to post a transaction in your checkbook register. 3. There may be a bank error. 4. There may be an unauthorized transaction (fraud). 5. If you only check your transactions online, you might forget

about checks you wrote, debit transactions, etc.

Fifth Third Bank, Member FDIC.

How to Balance Your Checkbook

1. Ending balance from your bank statement.

2. Add total outstanding deposits. 3. Subtract total outstanding

checks/debits.4. New balance.

$ _______+ _______- _______ = _______

Deposits - Checks/Debits = Balance

Fifth Third Bank, Member FDIC.

An Overdraft Scenario

Kara goes into the bank on 3/27 to deposit her paycheck. A Customer Service Representative (CSR) notices Kara’s account is overdrawn, which can cost $25+ for each overdraft. The CSR mentions this to Kara, and she wants to know why. Upon reviewing the statement, here is what we see:

03/25 $100.00 daily balance 03/26 $175.00 ck# 1102 (rent check) 03/26 $ 18.25 department store 03/26 $ 6.20 bookstore 03/26 $ 12.00 restaurant 03/26 $-111.45 daily balance 03/27 $-148.00 overdraft/return items fee 03/27 $-259.45 daily balance

Fifth Third Bank, Member FDIC.

What Happened?

• Because the rent check was written on 3/21, Kara assumed it had already been deducted from her account when she called the bank for her balance on 3/25.

• Kara thought her rent check had already cleared when she got the balance on 3/25, so she continued to spend the $100 in her account.

• She didn’t keep track of all her checks written and debit purchases in her checkbook register, therefore she did not have up-to-date information about her account balance.

• Since she didn’t track her transactions with her checkbook register and did not go online to look at her account, Kara wound up with $148 in fees.

Fifth Third Bank, Member FDIC.

Fifth Third Bank, Member FDIC.