How to
Use a
Financial
Institution
Latino Community Credit Union & Latino
Community Development Center
HOW TO USE A FINANCIAL
INSTITUTION
LATINO COMMUNITY CREDIT UNION & LATINO COMMUNITY DEVELOPMENT CENTER
Copyright©2013 Latino Community Credit Union
How to use a financial institution
Latino Community Credit Union
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TABLE OF CONTENTS
INTRODUCTION
4
WHY SHOULD I USE A FINANCIAL INSTITUTION?
5
CREDIT UNIONS VS. BANKS
6
WHAT DO I NEED TO OPEN AN ACCOUNT?
GENERAL DOCUMENTS
INDIVIDUAL TAX IDENTIFICATION NUMBER (ITIN)
HOW CAN I APPLY FOR THE ITIN?
7
7
7
7
WHAT QUESTIONS SHOULD I ASK?
8
HOW DO I USE MY CHECKING ACCOUNT?
WRITE A CHECK
DEPOSIT A CHECK
ENDORSE A CHECK
BALANCING MY CHECKBOOK
DEBIT CARD
OVERDRAFT PROTECTION
DIRECT DEPOSIT
9
9
9
10
10
11
13
14
HOW CAN I ACCESS MY ACCOUNTS?
PHONE
INTERNET
ATM
16
16
16
17
MYTH BUSTERS
18
How to use a financial institution
Latino Community Credit Union
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INTRODUCTION
In this chapter, we will learn how to begin working with a financial institution. You may wonder if
you should keep your money at home instead of a financial institution. We will discuss why financial
institutions are the safest option.
Using a financial institution offers you a safe place to save and grow your money. In the United
States, financial institutions offer many important services including savings accounts, checking
accounts and loans. It is important to know how they work to find the best services for you.
DISCUSSION TOPIC
If I am an immigrant, is my money safer here or in my home country?
Your money is safest in a reliable financial institution, whether here or in
your home country, where it is federally insured and you can access it
easily. A financial institution allows you to manage and grow your
money.
How to use a financial institution
Latino Community Credit Union
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WHY SHOULD I USE A FINANCIAL INSTITUTION?

I AM SAFE
If you keep your money under the mattress or carry a lot of cash in your pocket, you could lose
your money or be robbed. It is much safer for you and your family to keep your money in a
financial institution.

MY MONEY IS SAFE
The money you save in your credit union or bank is insured by the federal government up to
$250,000. This means that you cannot lose your money, even if the financial institution closes.
An account in a financial institution is the safest way to save your money for the future.

MY MONEY CAN GROW
Saving money with my financial institution will allow my money to grow over time to help reach
my goals. Financial institutions offer different types of accounts with a variety of terms, fees,
and interest rates.
The interest rate is written as a percentage (%) of your money or your loan. Interest works in
two ways. First, if you deposit your money in an account, you can earn interest. To earn interest
means that your financial institution pays you to keep money in your account. Second, if you
borrow money (a car loan, for example), you will have to pay interest.
You can save money since financial institutions are typically much less expensive than using
check cashers or payday lenders. You will also be able to access credit when you create a
relationship with a financial institution. This means that you can buy things now and pay for
them later. When you manage your credit well, you can build a strong credit history. This will
allow you to make important purchases, such as a home, to build wealth for yourself and your
family.
How to use a financial institution
Latino Community Credit Union
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CREDIT UNIONS VS. BANKS
DISCUSSION TOPIC:
What is the difference between a bank and a credit union?
In the United States, there are various types of financial institutions. Two of the main types of
financial institutions are credit unions and banks. Both of them offer similar types of services and a
safe place to save your money. But, different financial institutions offer varying interest rates and
fees.
Banks and credit unions are both regulated by the federal government. This means that your
deposits are insured up to $250,000.
CREDIT UNIONS:



are non-profit financial institutions.
exist to serve their members and work for the benefit of the community.
use the money the organization makes to provide more benefits to their members, such as
lower fees and better interest rates.
CREDIT UNION MEMBERS:



have something in common, such as an employer, association, or community. They must
join the credit union to use its services.
obtain a share of the credit union by opening a savings account and become owners of the
organization.
participate in a democratic process to elect leaders of the organization who are part of the
board of directors.
How to use a financial institution
Latino Community Credit Union
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WHAT DO I NEED TO OPEN AN ACCOUNT?
GENERAL DOCUMENTS
Each financial institution may request different types of documentation. Here are some examples:
An ITIN or a Social
Security number
A driver’s license or
another form of
official
identification with
your photo and
your signature
A bill to verify
your address
A minimum deposit
of $10 for a savings
account
THE INDIVIDUAL TAX IDENTIFICATION NUMBER (ITIN)
The Individual Tax Identification Number (ITIN) is a number that the Internal Revenue Service
(IRS) issues to people who cannot get a valid social security number so that they can file their taxes.
With this number, you can file your taxes, receive interest on your bank accounts, start a credit
history, or apply for a loan with some financial institutions.
HOW CAN I APPLY FOR THE ITIN?
Go to your local Internal Revenue Service (IRS) office and get the form W-7 with the corresponding
instructions. You can complete the application yourself or ask for help from your local non-profit
organizations. Usually your financial institution or local community center can help you apply for
this number.
Be aware!
Do not pay a lot of money for someone to help you fill out your ITIN paperwork.
The ITIN is NOT a work permit.
How to use a financial institution
Latino Community Credit Union
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WHAT SHOULD I ASK WHEN I OPEN AN ACCOUNT?
DOES THE
ACCOUNT EARN
INTEREST?
You should ask how
much interest the
account earns. To
earn interest means
the financial
institution pays you
for keeping money in
your account. All
savings accounts
should earn interest.
There are different
types of savings
accounts with
different interest
rates. Some checking
accounts earn interest
too.
ARE THERE ANY
FEES/CHARGES?
Sometimes you have
to pay a monthly
maintenance fee for
having an account.
Most checking
accounts have
monthly fees, but they
should be very low.
Some financial
institutions have no
monthly fee, but have
different types of fees
instead. For example,
you might have to pay
when you use the ATM
machines or visit the
teller.
DO I NEED TO
MANTAIN A
MINIMUM
BALANCE?
Minimum balance is
the amount of money
that you need to have
in your account at all
times. Many financial
institutions charge
you a fee if your
balance goes below
the minimum
balance.
IS THERE A
MINIMUM
DEPOSIT?
Minimum deposit is
the amount of
money you must
deposit to open an
account.
While each financial institution offers similar products and
services, their rates, fees, minimum balances and deposits
can vary. It is important to ask the right questions before
opening your account.
Be aware!
Fees and charges for account management, overdraft and ATM use might
change and can be very high. Be aware of new fees and penalties charged to
your account and compare.
How to use a financial institution
Latino Community Credit Union
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HOW DO I USE MY CHECKING ACCOUNT?
DISCUSSION TOPIC:
What experiences, if any, have you had with checking accounts? What
are your concerns, if any, about using a checking account and debit card?
You can use a checking account to write checks, to pay bills, or to use a debit card to buy things.
WRITE A CHECK
Learn how to write a check:
Check number
Name of person or
company who will
receive the money
Write the amount
in words
123
Miguel Rodríguez
111 Street
Durham, NC 00011
Write today’s
date here.
Use numbers to
write the check
amount.
111111111
Sign here
Note the purpose
of the check
DEPOSIT A CHECK
Learn how to deposit a check:
Write today’s date
here
Indicate here checks
to be deposited
Indicate cash to be
deposited
Write here the amount
of each check to be
deposited
Write your
name here
Total cash and
checks to deposit
Write here your
account number
How to use a financial institution
Subtotal minus
cash received
Total cash you want
to receive
Latino Community Credit Union
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ENDORSE A CHECK
ENDORSE HERE
Sign here
Do not sign below this line
Sign your name on the back of the check where it says “ENDORSE HERE”. Remember, after your
check is endorsed it is the same as cash. So, wait until you cash your check to sign it, in case it is lost
or stolen.
BALANCING MY CHECKBOOK
1. Record and subtract all DEBITS - withdrawals using the ATM, debit card or other
automatic payments deducted from your account, checks, and service fees.
2. Record and add up all CREDITS - deposits, including direct deposit or electronic funds
transfers.
3. Calculate your BALANCE in your register - add your deposits and subtract your
withdrawals.
Date
Number
1/20/09
Description of
transaction
Debit/Payment
Credit/Deposit
(-)
(+)
Previous balance
435.00
Balance
435.00
1/21/09
90
Groceries
42.35
392.65
1/2/09
91
Newspaper
17.61
375.04
1/22/09
92
Felipe Fuentes
25.80
349.24
1/23/09
Paycheck
300.00
649.24
Your check register helps you monitor the amount of money in your checking account. This will
help you to avoid fees for using more money than you have in your account. It is important to
record in your check register every checking account transaction.
If there is more than one owner of the account it is recommended that one person tracks the
balance in the account using the check register in order to avoid NSF, overdraft and other
unnecessary fees.
How to use a financial institution
Latino Community Credit Union
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DEBIT CARD
When you open a checking account, you can request a debit
card. Debit cards can be used to make purchases almost
anywhere. You can also use a debit card to withdraw money
from the ATM. In most cases you will need to enter a
Personal Identification Number (PIN) that your financial
institution will provide you. When you use your debit card, it
takes money directly from your checking account to make
the payment. It acts like a check, but faster.
PIN stands for “personal identification number.” This number is normally sent to your home by mail in
a separate envelope when you apply for a debit card. You use this number to access your accounts at
the ATM or make purchases with your debit card at stores. The PIN is a safety feature; it is like an
electronic signature.
ADVANTAGES
DISADVANTAGES
You do not need to carry cash.
If you do not use your check register to
track the money in your account, you
could spend more than you have.
If your purse or wallet is lost or stolen
your money is safe since a PIN number is
required to access your funds.
Your debit card provides direct access to
your checking account. So, be sure to
protect your Personal Identification Number
(PIN) and debit card number. Do not carry
your PIN with your card and do not allow
anyone to watch you enter your PIN at the
ATM.
You do not need to visit your financial
institution every time you need cash.
You can use your card just about
anywhere you go and if you need cash,
you can access your money at an ATM
machine any time.
YOUR PIN IS PERSONAL, DO NOT SHARE IT
WITH ANYONE!
BE AWARE!
If your card is lost or stolen or you detect any fraudulent use, contact your financial institution
immediately. In some cases, such as online purchases, credit cards have more protection than debit
cards in case of fraud.
How to use a financial institution
Latino Community Credit Union
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ATM CARD, DEBIT CARD AND CREDIT CARD
ATM card
Debit card
Credit card
To obtain it you need to have:
A savings account
A checking account
Any account, but your
application needs to be
approved first.
Can I withdraw money from
the ATM?
Yes
Yes
Yes
Do I need a PIN to use the
ATM?
Yes
Yes
Yes. It is possible you will be
charged more interest for a
cash advance.
Can I use it for purchases?
No
Yes
Yes
Do I need a PIN to make
purchases?
You cannot make
purchases
Yes
No. You only need to sign the
receipt.
When you use your card to
withdraw money or make
purchases, the money …
… is withdrawn
immediately from
your account.
… is withdrawn
immediately from
your account.
…is borrowed from your
financial institution and you pay
it back the following month.
Limit you can spend
The amount in your
account.
The amount in your
account.
Credit limit previously
approved.
It is very important to understand that the amount you have in your account determines the
maximum amount you can spend. If you spend more than you have in your account, you will be
charged a Non-Sufficient Funds (NSF) fee.
The amount in your checking account =
The limit you can spend on your debit card
To avoid spending more than you actually have, it is important to keep a record of your expenses,
writing each transaction in your check register and carefully checking the transactions in your
printed or online monthly statement.
How to use a financial institution
Latino Community Credit Union
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OVERDRAFT PROTECTION
Overdraft protection helps you if you spend more money than you have available in your checking
account. There are two types of overdraft protection:


One type takes money from your savings account and puts it into your checking account.
The other type gives you a small loan to pay the check.
While overdraft is less expensive than incurring non-sufficient funds fees, there is still typically a fee
for overdraft protection and a maximum number of transfers that can be made each month from
your savings to your checking account to fund overdrafts. These restrictions and fees vary by
financial institution.
FINANCIAL INSTITUTION
SAVINGS ACCOUNT
CHECKING ACCOUNT
It is good to have overdraft protection, but you should try not to use it. You should always know how
much money you have in your checking account. Do not withdraw or write checks or make
purchases for more than that amount.
If you do not manage your accounts carefully, they could be closed and it could be difficult to open
an account in another financial institution.
How to use a financial institution
Latino Community Credit Union
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DIRECT DEPOSIT
DISCUSSION TOPIC: What do you think the benefits of direct deposit might
be for you? What are some of your concerns, if any, about direct deposit?
Direct deposit allows your employer to deposit your salary directly in your account. You receive a
payment stub with all the information about your hours worked and salary. Your money is safe, you
save time waiting in line to deposit your check, and your money begins to earn interest right away.
Ask for a direct
deposit form from a
representative at your
financial institution and
give it to your employer.
If the answer is yes
Ask your employer if
they offer direct
deposit.
Choose the account type where you
want your money to be deposited
Name and address of your
bank or credit union
Account #1
Number that
identifies your
bank or credit
union
Account Type:
□ Checking
□ Savings
□ Money Market
Bank Name: LATINO COMMUNITY CREDIT UNION_________________________________
Bank Address: 201 West Main Street _____
City, State, Zip: Durham, NC 27701________
Routing # (9 digits): _________________________
Account#: _________________________
Account in
which you
want your
money to
be
deposited
Requested amount for this account:
□ % of Net Pay: _________ □ Specific Amount $____________
□ Entire Balance
Amount you want
to deposit in this
account
Direct deposit also allows you to receive your Social Security and other federal benefit payments.
You can sign up at http://www.godirect.org or calling 1-800-333-1795.
How to use a financial institution
Latino Community Credit Union
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ADVANTAGES OF DIRECT DEPOSIT
1. Your salary is available automatically and starts to generate interest immediately. Even if
you are sick, on vacation, or traveling, you continue to receive your money automatically
2.
It is convenient. You won’t miss going to the branch and waiting in a
long line to deposit or cash a check.
3. Your money is safe. There is no risk of being robbed or losing your money.
4. It is a trustworthy service. Millions of people use this service in the United States.
Payments always arrive on time and you can enjoy your money immediately.
5. It is confidential because there is not a printed check and thus no one can see what you
earn. You will receive a check stub from the employer with the same information you
receive in your regular check (how much you are paid and how many hours you worked).
6. Direct deposit can help you manage your finances and develop a habit of saving. You can
decide to deposit your money directly into one account, or divide your salary into various
accounts. This way, you can deposit a portion of your paycheck into your checking account
and the remainder in one or more savings accounts.
7.
Fewer problems. Problems with direct deposit are very infrequent. If a problem arises, you
can call the financial institution and it can be fixed with a phone call. Normally, a problem
with a lost or stolen check takes much longer to resolve.
8. It is better for the environment because electronic services save paper and this helps save
our forests.
How to use a financial institution
Latino Community Credit Union
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HOW CAN I ACCESS MY ACCOUNTS?
DISCUSSION TOPIC: If you currently have account(s), how are you accessing
them? What has been your experience, positive or negative?
Of course, at the branch your representative can help you with anything you need, but there are
other quicker and easier ways to do basic transactions such as check your balance and transfer
money between accounts. You can handle many types of transactions over the phone or mobile
phone, using the Internet or the ATM.
PHONE
Almost all financial institutions have a phone system that allows you to:
1. View your account balances.
2. Review your account transactions.
3. Transfer money between accounts.
4. Compare interest rates for deposits and loans.
5. Find the closest ATM.
6. Make a report of a lost or stolen card.
Ask your financial institution how to access your accounts by phone.
INTERNET
Through the internet you can access your accounts and make almost exactly
the same transactions as you would in your branch, except for withdrawing or
depositing checks or cash. You just need a computer with internet access and
your personal passwords.
MOBILE PHONE
Using your cell phone, you can check your balance, recent transactions and
more.
You can also receive alerts via text message when there is a deposit or
withdrawal in your account or when your balance is getting low.
How to use a financial institution
Latino Community Credit Union
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ATM
Automatic Teller Machines (ATM) give you access to your accounts 24 hours a day, 7 days a week.
You can check your balance, deposit and withdraw money and transfer money between your
accounts. To use the ATM, you need an ATM card or debit card and your PIN.
B
A = Card Slot
B = Menu Keys
C = Key Pad
D = Envelopes
G
A
C
F
E = Cash Withdrawal
D
F = Deposit Envelope
G = Receipt Slot
To withdraw money
To deposit money
Transfer money between accounts
1. Insert your card
1. Take an envelope and complete the
part on the back with your name and
amount of your deposit
1. Insert your card
2. Select a language
3. Type in your code or “PIN”
4. Press “withdraw cash”
5. Selecta an account
6. Type the amount to withdraw
7. Take the money, your card, and the
receipt
8. Document the amount you took out in
your check register
2. Insert your card
2. Select a language
3. Type in your code or “PIN”
4. Press “Transfer”
3. Select a language
5. Select an account from where the
money is transferred
4. Type in your code or “PIN”
5. Press “Deposit”
6. Selecta an account
6. Select an account to where the
money is transferred
7. Type the amount you are depositing
7. Enter the amount to transfer
8. Put the money or the endorsed check
in the envelope
8. Take your card and the receipt
9. Insert your envelope
9. Document the transaction in your
check register
10. Take out your card and receipt
11. Document the amount in your check
register
How to use a financial institution
Latino Community Credit Union
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MYTH BUSTERS
It is more expensive to use a financial
institution than a check-cashing outlet or a
payday lender.
In fact, it is much less expensive to use a
financial institution. Ask the right
questions and look for a credit union or
bank that does not charge many fees.
Credit unions tend to offer the low fees
and better interest rates.
My money might not be safe in a financial
institution.
When you deposit money in a financial
institution you can be sure that your
money is safe. The federal government
insures individual deposits up to $250,000
at both banks and credit unions.
I will not be able to access my money in a
credit union or bank.
You can access your money at any time in a
number of ways – at the branch, at an
ATM, by telephone, cell phone, or on the
internet.
What happens with my money if I have to
return to my country or if I die?
You can access your money using your
credit card or you can send your money
wherever you are. In the event that you
die, the beneficiaries designated in your
account would have access to the money in
the account.
How to use a financial institution
Latino Community Credit Union
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GOALS – FINANCIAL INSTITUION The following are some possible action items that you might be interested in taking to start putting into practice what we have discussed! Please check the goals below that you are interested in completing for the next session. If you do not have an account with a financial institution: Your Goal and Timeframe If you do not have a valid SSN, think about applying for an ITIN. Ask various financial institutions for interest rates and fees for their accounts. Open a basic savings account. Deposit a minimum amount of money. If you already have an account with a financial institution: Your Goal and Timeframe Verify that your savings accounts have a competitive interest rate. Ask your employer if they offer direct deposit and if so, sign up. Use one more of the following products and services to better manage your money: 
Checking Account 
Overdraft Protection 
Debit Card Start accessing your accounts using the ATM, telephone, mobile phone, or Internet.