Eisenhower High School
September 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
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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.
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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
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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
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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
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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
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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?
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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 - $7.00
Tip - $1.00
Available Balance $92.00
The 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:
$100.00
Gas - $20.00 Lunch - $7.00
Tip - $1.00
Actual Account Balance $72.00
It is up to YOU to keep a register of your account to know what
the accurate balance is at any given time.
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.
2.
3.
4.
Ending balance from your bank statement.
Add total outstanding deposits.
Subtract total outstanding checks/debits.
New balance.
$
+
=
Deposits - Checks/Debits = Balance
Fifth Third Bank, Member FDIC.
_______
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_______
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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
03/26
03/26
03/26
03/26
03/26
03/27
03/27
Fifth Third Bank, Member FDIC.
$100.00
$175.00
$ 18.25
$ 6.20
$ 12.00
$-111.45
$-148.00
$-259.45
daily balance
ck# 1102 (rent check)
department store
bookstore
restaurant
daily balance
overdraft/return items fee
daily balance
What Happened?
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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.
Fifth Third Bank, Member FDIC.