Types of bank accounts
what is the purpose of a savings account?
to save money for future use and helps you earn interest!
what is a budget?
a plan for managing money, including income and expenses
what are two institutions that store money?
Traditional banks and Credit Unions
what is gross income?
total amount of money earned before any deductions
Name an example of a traditional bank
Wells Fargo, Bank of America, etc.
what is a savings account?
a deposit account designed to hold money you don't plan to spend immediately
name 3 common expenses in a monthly budget
food, entertainment, personal purchases
[build your own answer is accepted]
who is a traditional bank for?
For-profit company
Anyone can join
Lower savings rates, higher loan rates
Examples: Wells Fargo, Chase
what is net income?
amount of money left after deductions have been taken out
Name an example of a Credit Union.
Fidelity, SF Credit Union, PremierOne
what is a checking account?
-type of account that lets you make payments, deposit and withdraw money via cash or checks
-you can use a debit card that's linked to the checking account
what are types of services that banks provide?
-managing money
-savings accounts
-checking accounts
-loas
what are two common deductions taken out of a paycheck?
taxes and health insurance premiums
True OR False: Minors (under 18 y.o.) cannot open a bank account.
False: Minors can open a bank account with help from parent/guardian.
how does a debit card work?
-card that's linked to your checking account
-when you make a purchase, money is deducted from your account
-no interest charges since you're using your own money
what are the requirements for opening bank account, under 18 years old?
-choose your bank and the type of account you'd like to have: checkings, savings account, or both.
-parent/guardian needs to present to open account in person. The account is set up as a joint account with parent/guardian to manage balance
-student and parent/guardian need to provide the following:
1. proof of identification (example: drivers license, proof of mailing address etc)
2. Minor needs proof of identification (example: birth certificate, social security card)
*important to note is that you need to maintain a certain balance on your account!!!
what is a W-2 form?
-form filled out by employer every tax year
-records how much the employee was paid and how much tax was held
-you need this to calculate how much taxes to pay the government
True OR False: You can open a bank account in person and online.
True
how does a credit card work?
-this card is not linked to your checking account
-when you make a purchase, you are "borrowing" money from the credit card issuer (traditional bank, credit union etc)
-interest is charged on unpaid balance... meaning that if you don't pay the full amount back by the due date, there is a percentage of interest charged to you
what are the requirements for opening a bank account, over the age of 18?
-choose your bank & decide if you want a checkings account, savings account, or both. You can ask bankers about these methods and get their advice on which account best suits you.
-provide the following documents: identification, proof of address, social security number
-open your account in person or online
-some banks require deposit of $25 to start account
what is a W-4 form?
-form that you complete when you get a job
-it lets the employer know how much money to withhold from their paychecks
-consider saving a certain amount that's dedicated to cover taxes, so you don't spend all of your paycheck and run out of money to pay taxes at the end of the year
Who reviews credit scores?
Your credit score is an important part of your financial stability— lenders, landlords, and even employers may review your credit score to determine your reliability.