Eco: Personal Finance

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1 Name Project Date: Eco: Personal Finance 1. Go to one of the following sites, or choose your own bank and answer the questions below. Be sure the bank you choose has local branches bank.com ny.com (take individual link) orkbank.com (Credit Union) I. Bank: 1. What types of products and services do banks offer to individuals (personal)? Check all that apply Products and Services o ATM reimbursements for fees charged by other banks for using their ATM s o Automatic Savings Plan (Christmas, Vacation Club etc.) o Online Bill Payment o Summaries of your online accounts/ Online Bank Statements o Online Fraud Protection o Automatic Deductions for Bank Loans o Overdraft protection o Send & receive money online o Bank by phone o Services in Spanish (or other languages) o Investment Services (stocks, bonds, mutual funds) o Financial Planning Services: you'll meet with a representative to discuss your financial status. Then work together to design a strategy to help you reach your goals, save money, and manage debt o Direct Deposit: your payroll, government, pension or dividend funds are automatically deposited into your account and are available immediately.

com (Credit Union) I. Bank: 1. What types of products and services do banks offer to individuals (personal)?

2 o and Wireless Banking alerts notify you if you are overdrawn, have bills due, etc. o Financial Centers: Face to face services at a bank! o Free access to research from Salomon Smith Barney or other investment brokerage. o Wire money o ATM Card o ATM/Debit Card o Basic Checking: No balance required o Certificates of Deposit (CD s) o Revolving line of credit 1 that provides overdraft protection o Life Insurance/Long Term Care Insurance o Credit Cards o Money Market o Loans o Checking accounts o Others Let s Shop Around! A. Assume that you are going to open a savings account and you have $300 to deposit. Compare 3 banks and find the best match for you. Bank Interest Rate Fees Extras such as ATM or Debit card, Online banking, etc.

o Wire money o ATM Card o ATM/Debit Card o Basic Checking: No balance required o Certificates of Deposit (CD s) o Revolving line of credit 1 that provides overdraft protection o Life

3 1. Which bank will you choose? Why? B. Since you will be going to college or getting a full time job in September, you ll need a checking account. Which bank, near your home or college, best suits your needs? Compare 3 banks below. Be sure to include the bank with the best Savings account for you. Bank # of free checks per month Debit card fees Monthly Fee or Minimum balance to avoid it Per debit fees at nonbank ATM s Per check fee Overdraft protection? (Yes: Conditions /No) 2. Which bank will you choose? Why?

Which bank, near your home or college, best suits your needs? Compare 3 banks below.

4 C. You received $3,000 in graduation presents and want to invest your money. Compare CD s and Money Market Accounts below. Since there may be fees associated with your investment be sure to use the Annual Percentage Rate (APR) rather than the Interest Rate. Interest Rate: Interest paid per year and expressed as a percentage APR stands for annual percentage rate and reflects the interest rate charge on the loan plus other finance charges including, for example, private mortgage insurance premiums, points and other financing costs you pay when obtaining the loan. CD s offer dual benefits of high interest rates and the security of FDIC insurance But early withdrawal penalties *******Use and take the link to CD s/savings, choose by State, NY and then Long Island. Use the CD Interest Rate calculator at to compute the value of your investment at maturity.******* Bank APR Value at Term APR Value at Term APR Value at Term 1 year APR 5 year APR 10 year APR Early withdrawal penalty (Y:

Interest Rate: Interest paid per year and expressed as a percentage APR stands for annual percentage rate and reflects the interest rate charge on the loan plus other finance charges including, for

5 conditions/n) Money Market Accounts. These are government-insured accounts that allow you access to the money you have deposited. (Liquid) Withdrawals are limited to six monthly, three of which may be by check. These accounts earn interest with the rate varying widely. Banks that are trying to attract deposits often offer MMAs with higher yields. Yield also vary on the amount deposited: The more you deposit, the more you earn. Money market funds are a type of mutual fund. Each share is worth $1. That value never changes. That value never changes. But the return on the investment does fluctuate. Earnings are paid as dividends to shareholders. Although the deposits made in these funds by shareholders are not insured by the government, money market funds are a relatively secure investment. Under government regulations, these funds must go into high quality short-term investments. Investors also can write checks against the balance invested in these funds. Bank/Fund APR Fees or Minimums FDIC Insured? 3. Which sound like the best savings vehicle for you? Why? D. It s time to get some loans to pay for college, a new car, or that house you want to buy. Take the calculator link and select Automobile Assume you are buying a $18,000 car.

Banks that are trying to attract deposits often offer MMAs with higher yields. Yield also vary on the amount deposited: The more you deposit, the more you earn.

6 1. Use the search engine to Choose a Product. Select Auto. Then Select NYS and Long Island. Choose 1 bank and compare the information for the loans described below. 2. A word about fees. If there is No fee then it is stated. Fees may be a small percentage such as.25%, which is $45 for an $18,000 loan. Bank Term 36 Month New Auto 36 Month Used Auto 48 Month New Auto 60 Month New Auto Rate Fees or Conditions Other Perks 2. Choose 2 products from your chart above. Compute the amount you will have to pay for your car loan each month and the amount of interest you will pay over the 5-year term. Bank Rate Monthly payment Total Paid over term

Bank Term 36 Month New Auto 36 Month Used Auto 48 Month New Auto 60 Month New Auto Rate Fees or Conditions Other Perks 2. Choose 2 products from your chart above.

7 Total paid in interest (Total Paid Car Price) 1. Which situation will provide you with the lowest monthly payments? 2. Which situation will cost you the most in credit (total interest paid)? 3. Which is best for you? Why? E. So you want credit? Compare Credit Card rates below. Investigate Credit Card Rates by using the search engine to search for Credit Cards. Then find the information in the Latest Rates box: 1. Complete the chart below comparing average credit card rates in the U.S. Type Standard Gold Platinum Rate (APR) 2. Why would you choose 1 type of card over another? 3. Would you qualify for all types? 4. Take the Link to "How s Your Credit." Complete the test. 5. What is your credit rating? 6. Use the Credit Card Calculator and compute the cost of charging $2000 on your credit card to pay for the new couch and television set you need in your apartment. Calculate the cost of paying only the minimum and cost of paying a higher amount. You may not pay off your full balance or pay more than $150 per month.

Then find the information in the Latest Rates box: 1. Complete the chart below comparing average credit card rates in the U.S. Type Standard Gold Platinum Rate (APR) 2.

8 Charge $1500 Minimum payment (set by calculator based on loan amount) Other payment (any amount ove minimum) Rate (APR) 13% $75 or # of months to repay Total cost of credit (above original charge) What is the best payment plan when using a credit card? 9. Take the link to "How do I find a better credit card?" And then to "Find the card that fits your lifestyle." Take the link to "Student Cards." Company/Bank Card Class Annual Fee Variable or Fixed Rate APR

What is the best payment plan when using a credit card? 9. Take the link to "How do I find a better credit card?

9 Late Fee Grace Period Over the limit Fee Cash Advance APR Cash Advance Fee Which is the Best Card for you? Why? Glossary Card Class: Classic, Platinum Annual fee: Yearly fee to use the card) V= Variable Rate: The rate will change throughout the year F= Fixed Rate: Interest rate will remain the same APR: rate of interest that includes fees and costs paid to acquire the loan. Late fee: Fee charged if payment is not received on time Over the limit fee: Fee charged if you spend more than your credit limit allows Grace period : The standard grace period is usually between days. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card. APR for cash advance: rate of interest including fees when you use credit cards to withdraw cash Fee for cash advance: A charge by the bank for using credit cards to obtain cash. It can be a flat (set) fee or a percentage of the amount of the cash advance.

of interest that includes fees and costs paid to acquire the loan.

10 **Some cards charge a fee for transferring a balance (the money you owe) from one card to another.

BUYING AND FINANCING YOUR NEW CAR

BUYING AND FINANCING YOUR NEW CAR By the InCharge Education Foundation, Inc. 2101 Park Center Drive, Suite 310 Orlando, FL 32835 www.mindyourfinances.com All rights reserved. No part of this book may be