Beware of Banking Fees Student Activity Packet

Name: Students will be able to: ● ● ● Identify common checking and saving account fees and how to avoid them Explain how overdraft protection works and the impact of overdraft fees Compare overdraft policies at major US banks NOTE: Vocabulary for this unit can be found in the NGPF Personal Finance Dictionary INTRO QUESTION OF THE DAY: How much are the average overdraft, service, and out-ofnetwork ATM fees? Answer the question on the first slide in the space below. Then, compare your answer to the answer on the second slide. Finally, follow your teacher’s directions on how to answer the followup questions on the last slide. 1. How much are the average overdraft, service, and out-of-network ATM fees? An Overdraft fee is $27.08, a Monthly Service fee is $15.45, and an Out-ofNetwork ATM fee is $4.77. LEARN IT ARTICLE: 7 Common Banking Fees and How to Avoid Them One of the ways that banks make money is to charge its customers fees for various banking services or when specific requirements are not met. Read the article about common banking fees. Then, answer the questions. 1. How can you avoid a monthly maintenance fee? You must open both a checking and a savings account at the same bank, maintain a minimum balance in your account or set up a monthly direct deposit. 2. What is the average fee charged by large banks for using an out-of-network ATM? The average charge by large banks for using an out-of-network ATM is usually $4.77. 3. What is an excessive transactions fee? An excessive transactions fee happens when savings account holders withdraw over limits banks may impose, typically six free withdrawals and transfers per month. 4. Which fee on this list will be the most challenging for you to avoid? Probably an overdraft fee since I don’t look to see how much money I have in my account, which is not smart, and tend to just hope I have enough money to buy something. VIDEO: FinCap Friday: Protection or Deception? One of the fees that can show up on your checking account statement is the overdraft fee. Watch the video to learn more about this fee. Then, answer the questions. 1. What is an overdraft fee? An overdraft fee is overdrawing your checking account more money then you have in it and being charged for it. 2. True or False: Overdraft protection is a required feature of most checking accounts with no ability to opt out. False, it is not a required feature of checking accounts. 3. Why do so many people still sign up for overdraft protection when it is not always beneficial for them to do so? People may view it as a safety net during financial uncertainty. LEARN IT ARTICLE: 7 Mobile Banking Alerts That Help Protect Your Money One way that you can avoid fees is to turn on alerts that will let you know when there’s an issue with your account that requires your attention. Skim this article to find out what kinds of alerts you can set up so you can avoid fees. Then, answer the questions. 1. Select 3 of the alerts mentioned in the article. In your own words, briefly describe their benefits. Low Balance Alert: Will tell you when your balance is getting low, can prevent overdraft fees, don’t have to be signed into an app or website to get alerts Direct Deposit Alert: Lets you know when your paycheck is in your account, if you use automatic bill pay services it will let you know when your funds are available for automatic withdrawals Unusual Account Activity Alert: Will alert you of suspicious activity on your account, prevents fraud, can save you from theft. 2. While all seven of the alerts are highly recommended, which one do you think is most helpful for you to avoid fees? Explain your reasoning. the low balance alert is the most helpful since it would let me know that I need to cut back on spending or I will go broke, doing this I would avoid an overdraft fee.