Anytime Adviser Checking Account Coach

Transcription

1 Anytime Adviser Checking Account Coach Welcome. This interactive guide coaches you in managing your checking account. You may move from chapter to chapter by selecting headings from the left. Click on "next" or "previous" to move from page to page. On pages with audio, you may choose to turn off the sound. You also may view or print a transcript. To begin, click on "next." Introduction This guide coaches you through the entire process of selecting and using a checking account. First, let s see how comfortable you are managing a checking account. For each question, select the phrase that best completes the sentence, by clicking on the circle after either a, b, or c. Q1 I selected my checking account because a) It offered attractive checks. b) It met my checking needs. c) It was free. Q2 I make most of my deposits a) By transferring funds from my savings. b) Through direct deposit. c) In person at the credit union branch. Q3 Monthly, I get cash from an ATM (automated teller machine) a) Four or more times. b) One to three times. c) Never. Anytime Adviser Checking Account Coach 1

2 Q4 I might use a debit card/check card a) To help prevent me from overspending. b) Because it s more efficient than writing a check. c) Only if I couldn t write a check. Q5 When I get my paycheck, I a) Cash it and spend it. b) Have it direct deposited in my credit union account. c) Drive to my credit union, deposit it myself, and get some cash. Q6 I sometimes write a date in the future on a check a) To give me a few days to add money to my checking account to cover a check. b) Hmm. Actually, I never have. c) Only when I ve mistaken today s date. Q7 When I write a check, I a) Let the clerk fill in the payee line with the store s name later. b) Enter the payee s name and draw a line though any empty space. c) Enter the payee s name, spelling out all abbreviations. Q8 Each year, I bounce a) Two or more checks. b) Zero checks. c) Maybe one check. Q9 I balance my checking account a) Rarely. b) Two to four times a month. c) Every month after I receive my statement in the mail. If you answered mostly A: Sounds like you would benefit from guidance managing your account and protecting against forgery this guide will help you. Be sure to view the Balancing chapter to learn easy ways to balance your checking account. Anytime Adviser Checking Account Coach 2

3 If you answered mostly B: Congratulations. Looks like you re using your account to its fullest potential. You might want to breeze through this coach to pick up a few helpful tips. If you answered mostly C: Your cautious approach shows you take your finances seriously this guide will offer you a few fresh tips. Be sure to view the Electronic Advantages chapter to learn how electronic access to your account will save you time and money. This quick guide coaches you to: Find a checking account that matches your needs; Write checks correctly; Track all withdrawals to avoid bouncing checks; Take advantage of efficient electronic transactions; and Keep your account balanced. First, a word about terminology. At the credit union, a checking account may also be known as a share draft account, and checks are known as share drafts. Why the difference? Credit unions are different from other financial institutions in many ways. At your credit union, you are a member rather than a customer. Credit unions are nonprofit cooperatives with the philosophy of people helping people. A volunteer board of directors, elected by members, governs your credit union. In contrast, bank directors are paid. Any money your credit union makes is returned to members in the form of better rates and services. Your credit union works for you. Other financial institutions work for their stockholders. How Checking Works Your checking account provides a convenient way to accept money from others in the form of checks or electronic payments. It s also a safe place to store your cash. Credit unions typically offer several tools for taking money out of a checking account. Here are the most common. Match each tool with the correct definition. ATM card Provides you with electronic access to your checking and savings funds from automated teller machines. Anytime Adviser Checking Account Coach 3

4 Check A document that promises to pay a specific amount of money from your account when cashed. Check card Another name for a debit card; also called a cash card. Debit card Looks like a credit card, but immediately pays with funds from your checking account; also works at ATMs. When you open a checking account, you provide a written sample of your signature. Your credit union orders checks, which you can write to others as payment. Your credit union honors only those checks with your signature. Traditionally, the merchant or individual deposits or cashes your check. Next, your check travels to a clearinghouse to be processed, and then it goes back to your credit union. Today, millions of checks are processed electronically debiting your account immediately. In some cases, a clerk accepts your check, runs it through some equipment, and returns it to you completing the transaction. You also can withdraw funds electronically. Using debit or ATM cards for payment eliminates the need to process paper checks. Visa and MasterCard debit cards are growing in popularity. They are accepted anywhere credit cards are accepted, but they work like checks. With the swipe of your card, you ve paid for your purchase. You even can use them at ATMs to check your balance or get cash. Two rules ensure a successful checking experience: 1) Put money in before taking it out, and 2) Keep track of every transaction. If you don t, the consequences can come as a shock... How much do a couple of music CDs cost these days? That depends on how well you manage your checking account. Our shopper, Victor, has a checking account at a large national bank, not a credit union. Victor went into the Best-Mart to buy one CD, but he found a second on sale. They total about $27. Victor doesn t carry cash, so he ll be paying with his Visa debit card, which will deduct from his 1 st National Bank checking account. The current balance is $22. How much will these two CDs cost Victor? a) $27.50 b) $52.00 Anytime Adviser Checking Account Coach 4

5 c) $78.00 d) $84.00 a) $27.50? Possibly if Victor used 50 to call his bank and discovered his balance was actually $31. $ = $27.50 b) $52? Maybe. When Victor s check bounces, he ll owe a bad-check fee of $25 to Best-Mart. He ll also owe a $26 fee to his bank, but Victor thinks he can talk his way out of this charge. (Good luck!) $27 + $25 = $52 c) $78? Quite likely! When Victor s check bounces, he ll owe a bad-check fee of $25 to Best-Mart. He ll also owe a $26 fee to his bank. $27 + $25 + $26 = $78 d) $84? Yes! When Victor s check bounces, he ll owe a bad-check fee of $25 to Best-Mart. He ll also owe a fee to his bank. Since this is Victor s third bounced check, the bank will charge him $32 and may suspend his checking privileges. $27 + $25 + $32 = $84 Clearly, Victor should consider a credit union checking account with overdraft protection, which will help him avoid bouncing checks. Now let s look at checking account options. Selecting an Account Which checking account is best for you? That will depend on your needs. Convenience is a top priority with checking accounts. Do you want an ATM or debit card linked to your account? Also consider the cost of maintaining a checking account. Is there a monthly fee? And is overdraft protection available? Anytime Adviser Checking Account Coach 5

6 Determine your checking account needs and evaluate possible account options based on your needs. Use the Checking Account Options Work Sheet in the Resources section to help you compare checking accounts and determine your needs. When selecting an account, keep these money-saving tips in mind: Credit Unions Cost Less Consumers who use credit unions save tens and sometimes even hundreds of dollars per year. A recent report issued by the U.S. Public Interest Research Group found that consumers using regular checking accounts at credit unions save money. On average, they save $90 a year from what they would pay at small community banks and $165 a year from the 300 largest U.S. banks. Ask About an ATM Network Many credit unions across the country do not surcharge other credit union members when traveling, look for credit union-owned ATMs. Expect Easy Access The details of your last few transactions may be just a phone call away. Plus, some credit unions have Web access or plan to soon. Get a Credit Union Debit Card for Travel Abroad If your credit union debit card has a four-digit numerical PIN (personal identification number), you can use it at ATMs worldwide. It s a convenient way to access local currency, and credit union cards often deliver the best exchange rate. Putting Money In There are several ways to deposit money in your account. Match each deposit method with the correct definition. In person This involves visiting your credit union branch with cash or checks and completing a deposit ticket. Mail Ask your credit union which address to use when mailing in checks for deposit never mail cash. ATMs If you have ATM access, you ll find that some but not all ATMs will accept deposits. Anytime Adviser Checking Account Coach 6

7 Electronic transfer This method is growing in popularity. It can include direct deposit of your paycheck and even your income tax refund. Your credit union will accept cash and most checks. To deposit a check, you ll need to properly endorse (sign) it on the back. Once a check is endorsed, anyone can cash it, so wait until you re at the credit union to endorse it or add the line for deposit only before your signature. If your name is misspelled on the front of the check, endorse the back with the same error and then again correctly underneath. You may also need to fill out a deposit ticket. You ll find a supply at the back of each book of checks. Ready to make a deposit at a credit union branch? Try putting these 10 steps in logical order to deposit a check. 1) Receive check. 2) Skip lunch. 3) Drive to credit union. 4) Find a parking space. 5) Endorse check. 6) Complete deposit ticket. 7) Wait in line. 8) Make deposit. 9) Receive receipt. 10) Record transaction in check register. Direct deposit saves you time. Instead of 10 steps to deposit your paycheck in person, consider just two steps with direct deposit: 1) Receive receipt. 2) Record transaction. Electronic deposits are safer. The U.S. Government, alone, annually replaces more than 800,000 checks that are lost or damaged in delivery. To elect direct deposit, you ll need to provide your credit union s routing and transit number and your account number. Your employer probably will ask you for a blank check write VOID on it first. The first nine digits are your credit union s routing and transit number. The next digits are your account number. Digits after that are your check number. Anytime Adviser Checking Account Coach 7

8 Record every transaction! If your paycheck is deposited on a regular schedule, write down the schedule in the front of your checkbook. Another technique is to write down the dates and descriptions of direct deposits you re expecting for the next month on the day you balance your account for the last month. Leave the amount empty until you have confirmation of the deposit. Now let s learn about taking money out of the account. Taking Money Out You ve opened your credit union checking account with $500, but you may not have access to those funds just yet. Typically, funds from newly deposited checks are available in two to five business days. This time lapse is known as float and gives your financial institution a chance to confirm the legitimacy of a check. Electronic payments are available the next business day. Let s write that first check. Each year, hundreds of thousands of checks are forged. These tips can help protect your account and prevent honest errors: Use a pen to write your checks. Pencil can be altered. Use today s date. Even a postdated check can be cashed today. Fill in the payee section before signing. Ensure that no one else can cash this check. Print the amount as close as possible to the preprinted dollar sign. Prevent additional digits from being inserted. Write out the amount in words as protection against anyone altering the dollar amount. If you make a mistake, void the check and start over. Sign your name in cursive, connecting all letters. Printing is easier to forge. If you re using a check at a store, be prepared to show a driver s license or other photo ID. Anytime Adviser Checking Account Coach 8

9 Checks are just one way to withdraw funds. Debit cards look like credit cards, but they work like checks. As long as you have funds in your account, your debit card will be accepted when you run out, it will be declined. Debit cards also work at ATMs, giving you easy access to cash. Electronic Funds Transfer or EFT refers to electronic payments from your checking account. Often, these are regular payments you set up, such as paying your electric bill or making your car payment. It s a great way to pay your bills on time, every month, without ever using a stamp. Soon, you may even be able to write checks from your computer. Credit unions with Web branches are beginning to let members write checks online. Keep in mind, you may not be the only one taking money out of your checking account. If you share this account with another person, you ll need a system to ensure you don t overdraw the account. Consider keeping extra savings in the account as a buffer, or make a promise to contact the other person before writing a check for more than $100. If this doesn t work, consider separate accounts. Your credit union also has access to your account. If your account earns dividends, it will automatically add monthly dividends to your account. Likewise, the credit union will automatically debit funds if you have a monthly fee, reorder checks, bounce a check, or use an ATM that charges a fee. With all these ways to access your account, how do you keep track? If you don t carry your checkbook register with you at all times, consider carrying a list of your current balance and all monthly direct deposits and automatic withdrawals. Write down every transaction on this slip. Print the Transaction Tally Page from the Resources section and carry it with you. Check your account often for recent payments, deposits, and the current balance. Try to put these electronic transactions in the correct columns of a check register. Deduct Deposit $ Car loan payment $ Tom s paycheck $60.00 ATM cash $89.00 Income tax refund $1.50 ATM fee $ Transfer from savings $61.22 Cable bill $ Rosa s paycheck $72.45 Electric bill $2.48 Dividend Anytime Adviser Checking Account Coach 9

10 Electronic Advantages Even if you don t use a computer, you can enjoy the advantages of electronic transactions. Each time you elect an electronic transaction over a paper check, you save yourself time and money plus you can reduce your exposure to forgery and mistakes. Electronic transactions save your credit union the cost of physically processing checks. These savings come back to you in lower loan rates and more services. When you set up automatic monthly payments for your car loan, you save the cost of the stamp and envelope. Also, your payment is deducted on the due date, ensuring you won t pay any late fees while leaving your money in your account through the very last minute a plus if your account earns dividends. Debit card transactions save you time and protect you against check forgery. Using a debit card to buy your groceries can save you time. You also eliminate the possibility that someone in the store can alter your payment amount. An ATM/debit card gives you easy access to cash, but watch out for surcharges. A dollar-fifty surcharge for $20 in cash amounts to a 7.5 percent fee. Credit unions are known for keeping surcharges low, and many eliminate fees for members. Getting cash from an ATM might be quicker than visiting a branch plus ATMs are accessible 24 hours a day. You ll really appreciate the speed of direct deposit if you re expecting an income tax refund. Direct deposit refunds arrive in half the time of paper refund checks. Are electronic transactions safe? Yes. Further, they can be safer than paper checks, which can be stolen or forged. Remember to record electronic transactions in your checkbook register, and confirm them when you balance your account. Even if you don t use a computer, financial institutions do, to correctly and efficiently process transactions. They use secure networks that encrypt or code personal information. A growing number of credit unions are opening Web branches which allow members to conduct business online. Soon you may be able to: Download account transactions to finance management software. Reorder checks online. Anytime Adviser Checking Account Coach 10

11 Apply for a loan online. Write checks from your online account. Balancing Balancing is often thought of as a formal process of reconciling your checkbook balance with your monthly statement. Balancing also can mean that both you and your credit union agree on the amount currently in your account in this sense, you could balance your account each week, or even with each transaction. Why balance your account? The most common consequence of not balancing is bounced checks. It s a costly habit that also damages your credit rating and your reputation with merchants. Further, it degrades you. You ve promised payment with your check, and if you bounce a check, you break that promise, which can be embarrassing and humiliating. Before we work on reconciling a monthly statement, let s look at some less formal ways to keep track of your account. Make a call your credit union may offer 24-hour automated access from a Touch-Tone phone. Visit an ATM with a debit or ATM card, you can check your balance at any ATM, for free. (Surcharges apply to withdrawals.) Check online If your credit union offers online access, sign up. It s safe and convenient. Here are some tips to help you record all transactions in your checkbook register: Prefill your register for the month with the date and type of anticipated automatic, debit, ATM, and check transactions. Add the amount and correct the date when the transaction takes place. Mark out those that don t. Keep transaction receipts wrapped around your debit/atm card. Circle the balance. Carry a copy of a single page of your check register. Wrap it around your debit/atm card, and record each transaction. Whether you re receiving paper or online monthly statements, the online calculator in this guide can help you reconcile your credit union statement with your records. Anytime Adviser Checking Account Coach 11

12 Practice reconciling using this sample statement and checkbook register. Put these 10 steps in logical order to reconcile your statement. 1) Gather register and current statement. 2) Confirm each statement transaction in register. 3) Note any service charges in register. 4) Record in register any dividends. 5) Find new register total. 6) Add payments not on statement to total. 7) Subtract deposits not on statement from total. 8) Register total should match statement. 9) If not balancing, recheck math. 10) Plan for next month s automatic transactions. Do & Don t Test your knowledge. Move these 10 strategies under the correct columns. Do -Elect direct deposit for paychecks and refunds. -Expect a postdated check to be cashed immediately. -Trust that your electronic transactions are secure. -Set up automatic payments for regular bills. -Check your balance several times a month. Don t -Write a check before putting sufficient funds in the account. -Select a checking account based on check designs. -Skip a couple of months of reconciling your checkbook. -Let the clerk fill in the payee line later on a check. -Forget to write down EVERY transaction. Anytime Adviser Checking Account Coach 12