Checking & Savings Video Transcripts With Citations. Meet Carlos. Carlos is a rising freshman at State University.

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1 2016 MoneyCoach LLC Checking & Savings Video Transcripts With Citations Checking & Savings 101 (Video 1) Meet Carlos. Carlos is a rising freshman at State University. Carlos will be arriving on campus in a month, and has quite a list of things he needs to buy: books, laundry baskets, food, and so on. Sadly for Carlos, those items also require money, so he ll need to open a bank account that he can access while on campus. Unfortunately, he has no idea where to start. What should he do? Well, we ve got him covered. Let s start with the basics. There are two types of bank accounts, checking and savings. Checking accounts are designed to give people easy access to their money. They can be used to deposit checks, pay bills, and even transfer money between accounts. Plus, they have no limits on ATM or online transfers and come with both checks and a debit card. This makes them an ideal homebase for your money 1. In contrast, savings accounts have no online bill pay and no debit cards, plus, some transactions, such as online transfers, are limited to six times per month, beyond which a hefty fee is charged 2. 1 Checking vs. Saving Overview: 2 Checking vs. Saving Overview: Six Transaction Limit Overview:

2 So clearly, savings accounts are inferior right? Well, not so fast. Unlike most checking accounts, all funds kept in a savings account earn a small amount of money each year called interest. While this money isn t very large, and normally way smaller than anything you d earn with any investment account 3, the money put into a savings account isn t subject to risk, unlike invested money. This makes savings accounts a great home for your emergency fund, and any saved money you need in the next five year 4 s. For more details on building an emergency fund, be sure to check out our video Funding Your Future. Hopefully you and Carlos now better understand how checking and savings accounts work. Be sure to check our next video, where we ll teach you how to get a great bank account, and be sure to check out our website, where you can find more educational material and free recommendations for great bank accounts. How to Get and Use Checking & Savings Accounts (Video 2) Meet Carlos. Carlos is a rising freshman at State University who needs a checking account he can access while on campus. There s just one problem. While Carlos understands how checking accounts work, having watched our previous video Checking and Savings 101, he has no idea how to pick the best account and avoid fees. What should he do? 3 Background on the 7% Number: Investing Timelines:

3 Well, we ve got him covered. Let s walk through the four most common account scenarios: Scenario 1: You want an account offered by an online-only bank our preferred solution. These are banks that don t have branches, giving them much lower costs than traditional banks 5. This in turn allows them to offer accounts with way lower fees and much higher interest rates. Plus, online banks have an unusually good online and mobile experience and don t skimp on ATMs: most either participate in a nation-wide network of ATMs located in major retailers, like CVS or 7-11, or they automatically reimburse a set amount of fees from non-network ATMs, like those of Chase or Bank of America,, each month 6. Scenario 2: You just cannot live without a branch presence, or you need to deposit cash regularly 7. In this case, you ll need to choose between a checking account offered by a big bank or a credit union. So what should you choose? Well, most big banks generally have better technology and a wider ATM and branch presence, whereas credit unions tend to have better customer service and lower fees due to their status as nonprofits 8. Which one you choose is up to you, just be sure it has ATMs in your area. Scenario 3: You just can t get a checking account due to poor banking history 9. In this case, avoid prepaid debit cards, which have a ton of 5 Online Lenders Offer You Lower Rates: 6 Overview of Online Banking: 7 The Only Reasons Not to Use an Online Bank: 8 Big Bank vs. Credit Union Credit Union Overview: 9 Denied for a Checking Account:

4 fees 10, and instead get what s called a second chance checking account, which are actually bank accounts designed specifically for at riskcustomers 11. Scenario 4: You can t get a checking account because you re below 18 years old 12. In this case, you ll need to ask your parents to open what s called a kid or teen account, which operates just like a normal bank account, just with more parental controls built in 13. Finally, regardless of what account you get, one the online application shouldn't take more than 10 minutes, and two there are still a couple of rules to follow: Rule 1: Never go below your account s minimum balance requirement. Otherwise, you ll have to pay a large monthly maintenance fee. Rule 2: Never opt into overdraft protection. Overdraft protection allows you to automatically transfer money from a linked account to your checking account should your balance dip below zero due to a debit transaction, ATM withdrawal, or a bill payment 14. Unfortunately, this transfer isn t free, so it's actually better just to opt out of overdraft protection and have them decline your debit card, as you can always use your credit card instead. Rule 3: Use online bill pay. Online bill pay allows you to use the money in your checking account to pay any company or individual 15. For larger companies, like your utilities provider, the money is wired electronically, 10 Prepaid Debit Card Overview: 11 Denied for a Checking Account: 12 Age Limit for Checking Account: 13 Kid and Teen Bank Accounts Overview: 14 Opt into Overdraft Protection? 15 Online Bill Pay Overview:

5 and for smaller companies, like your sketchy landlord, the bank will actually mail them a check for free. How cool is that? Rule 4: Use mobile deposit. This is a free service that allows you to deposit checks using your bank s app, rather than having to go to a branch 16, and is a service offered by both traditional and online banks. Finally, Rule 5: Use Venmo. Venmo is an application that links to your checking account, allowing you to send and receive money from anyone in the US. It's free, and totally secure. Congratulations! You have finished our checking and savings basics curriculum! If you want to see our free recommendations for great bank accounts, or just more educational material, be sure to check out our website! 16 An Example of Mobile Deposit: