banking presentation

WoodGreen Community Services: Financial Literacy

Topic: Banking

WoodGren Community Services

Presenter: Alana Mangold

Welcome Ryerson

Students!

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Disclaimer• The information provided are tips, suggestions

and options that can be utilized by individuals in order to enhance their financial literacy skills.

• WoodGreen is not responsible for any repercussions that may come about from an individual acting upon the information presented.

• This is information can be accessed by the general public and can be found on various validated websites.

Financial Literacy Series:Tuesday March 3rd: OSAP 101

Wednesday March 4th: Budgeting

Monday March 9th: Banking

Wednesday March 11th: Tax 101

Location: Ryerson Student Centre - Thomas Lounge

How many of you have at least one bank account?

Where do you bank and why?

How much do you pay for monthly banking services?

Questions:

Banking and Financial Services

Banks:

• For profit corporations

• Federally regulated by the Bank Act

• Owned by its shareholders, shares sold on the stock market

• There is no membership requirement to open an account

• There are both Canadian and foreign-owned banks operating in Canada

Credit UnionsCredit Unions:

• Not for profit organization.

• Primary commitment is to serve their member’s financial needs.

• Provincially regulated so there are differences between provinces.

• Membership allows you to vote.

• You must buy a share and become a member first to open an account. (Average of $5-10 per share)

Bank accounts and services (con’t)

Chequing Account:

• This type of bank account is used for everyday banking and bill paying

• The bank will supply you with a debit card• For a fee, the bank will supply you with cheques that

you can use for various purposes

Interest

• You may not earn any interest with a chequing account

Bank accounts and servicesSavings Account:

• This type of bank account can be used to set money aside for short to medium-term savings

• Savings accounts are ideal for moving money from chequing accounts, in order to segregate funds meant for savings

• Careful: occasionally banks will charge hidden fees for paying bills or using interac out of a savings account

Bank accounts and servicesInterest on Savings Account:

• Bank pays you interest on your deposits

• Amount of interest earned depends on the bank and type of savings account you choose

• Some banks will pay more interest if you keep a certain amount of money, called a minimum balance, in your account

• Savings accounts are good for short to medium-term savings needs

Bank accounts and services (con’t)

Account services

• For either kind of account (chequing and savings), your bank or credit union will offer:

– Telephone and internet banking– A debit card for ATM/ABM access and retail

purchases– Direct deposit of government cheques or your

paycheque • necessary for government cheques by April 2016!

– Preauthorized or automatic bill payments– Preauthorized or automatic transfers to

savings

Fees for students – CIBC CIBC offers a student account (free)

• Regular transactions: debit, bill payments, withdrawals and deposits – are unlimited and free

• Non-CIBC ATM withdrawal - $1.50 (+fee at ATM)

• Once no longer a student, the same plan will cost $13.95

Fees for students – TDTD Everyday Banking Student Discount (free)

• Regular transactions: debit, bill payments, withdrawals and deposits – 25 transactions per month are included

• Additional transactions are $1 each

• Non-TD ATM withdrawal - $1.50 (+fee at ATM)


Fees for students – BMOBMO Plus Plan


• Additional transactions are $1 each



Fees for students – ScotiabankScotia One Account

• Regular transactions: debit, bill payments, withdrawals and deposits – Unlimited transactions are included



• With Scotia can earn either cash back or Scene points for using debit

Fees for students – RBCRBC Student Banking




Fees for students – President’s Choice Financial

PC Student Banking

• Regular transactions: debit, bill payments, withdrawals and deposits – unlimited per month are included


• This plan will always be free, as PC offers a no fee bank account

Additional fees Overdraft: • There is typically a monthly fee to have overdraft

protection – average fee of $4 monthly • When the overdraft is used, there is interest charged

on the balance. Interest will typically be between 20-30%.

Non-sufficient Funds • If you write a cheque and there is not enough money in

your bank account to cover it, you will be charged a Not Sufficient Funds (NSF) fee of around $40 - $50.

Opening a bank account1. Decide which bank is right for you. Use the above guidance and personal preference to select.

2. Make an appointment to go to the bank in person. If you are under 18, you must take your parent or guardian.

3. Review the account options. Make sure to ask them about services, interest rates, and service fees.

4. Complete the papers needed to open an account. Make sure that you bring the right identification (I.D.).

Opening a bank account

What kind of I.D. do I need?You have three options:

1. You can show 2 pieces of I.D. from List A or

2. You can show 1 piece of I.D. from List A and 1 piece of I.D. from List B

or3. You can show 1 piece of I.D. from List A and have someone the bank knows confirm your identity.

Opening a bank accountList of Valid Identification: List A

• Canadian driver’s license• Canadian passport• Canadian birth certificate• Social Insurance Number (SIN) card• Old Age Security card• Certificate of Indian Status• Provincial or territorial health card (except in Manitoba,• Ontario or PEI)• Certificate of Canadian Citizenship or Certification of

Naturalization• Permanent Resident card or Citizenship and Immigration• Canada form IMM 1000, IMM 1442, or IMM5292

Opening a bank account

List of Valid Identification: List B

• Employee I.D. card• Debit card or bank card with your name and

signature• Canadian credit card with your name and

signature• Current foreign passport• Canadian National Institute for the Blind

(CNIB) client card with your photo and signature

What are my rights?What if I have an account, and the bank makes a mistake on it?

• If you have a complaint about how the bank has handled transactions on your account, take these steps to resolve your complaint:

– 1. Speak to a customer service representative at your branch.

– 2. Write a letter to the branch or area manager.– 3. Write a letter to the bank’s internal

Ombudsmen.– 4. Call the Ombudsman for Banking Services and

Investments (OBSI), toll-free at 1-888-451-4519.

What are my rights? (con’t)What if there are transactions on my account that I did not do?

• This is account fraud – this can occur if you use a bank machine that has been tampered with, or a debit terminal that has been exposed to potential fraud

• Things to note: – If there is suspicious activity on your account report it

to the bank immediately – You will not be liable for these amounts as they were

not transacted by you. The bank will reimburse you. – If you have given people your pin, or written your pin

down anywhere, the bank may reserve compensation- so make sure to choose a pin you will remember

Break time!

The cost of CreditEXAMPLE: $1,000 balance on a Visa Card with interest rate of 19% Here is what happens if you make only the minimum payment for three months:

• If you only pay the minimum payment of 2% toward your debt each month, it will take you more than 26 years to pay off the debt.

• This will cost over $3000 in interest!

Payment To interest

To principle

Balance

1st month 20.00 16.67 3.33 996.97

2nd month 19.93 16.61 3.32 993.35

3rd month 19.87 16.55 3.32 990.03

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Managing Credit• Shop around for the lowest interest rate.• Understand your agreement. Make sure you know the

payment deadlines and the penalties for late payments.• Use only as much credit as you can afford to pay back• Mark your payment deadlines on a calendar, pay your

full balance by the due date every month if you can.• Do not miss payments. If you cannot pay the full amount

ALWAYS make at least the minimum payment• Tell your creditor if you cannot make a payment on time.• Do not treat credit like free money – it can be very

expensive money. Figure out the total price you are paying when you use credit. How much will it cost with interest?

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Managing Credit• The only way avoid paying interest is to pay the

FULL balance owing before the payment date • If you do not pay the full balance by the payment

date, you will be charged interest on the entire statement balance, not just the amount owed

• Example: Statement balance $1000, interest rate 20%.

Balance due date: March 3, 2015.You pay $500 on February 25th & $500 on

March 7th You will still pay the full $16.68 of interest due

as the full balance was not paid in full by the 3rd. • Always pay your credit card balance on time, or

the late payments will hurt your credit score 29

Managing Credit• Make sure that you don’t take on more credit than you

can afford. • If you can’t afford to pay back $2000 in credit card

debt, don’t take a $2000 dollar limit on the card• The minimum amount of credit you can receive is $500 • Many credit card companies will contact you letting

you know “you have qualified for more credit” • This is how they earn money from you, by increasing

your credit to more than you can afford to pay back all at once, thereby earning interest off you

• Contact your credit card company and instruct them to not put automatic credit increases on your credit card

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Credit ScoresWhat is a credit score? • Credit Score: A statistically derived numeric expression

of a person's creditworthiness that is used by lenders to access the likelihood that a person will repay his or her debts. A credit score is based on, among other things, a person's past credit history. It is a number between 300 and 850 - the higher the number, the more creditworthy the person is deemed to be.

What is a credit score used for? • A credit score plays a large role in a lender's decision to

extend credit and under what terms. For example, borrowers with a credit score that is under 600 will have a harder time receiving credit and will typically be charged a higher rate of interest.

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Student Lines of Credit • Many banks offer student lines of credit to assist

with funding post-secondary education • Alternative funding for those who can’t access

OSAP • Interest rates are typically much lower than credit

cards • Will need a co-signor for the loans (called a

guarantor) typically a parent or family member with proven sources of income

• Interest is not tax-deductible as with OSAP loans

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Alternative Financial Services

• Alternative financial services are outside of the traditional, regulated banking system.

• They do not take deposits like a bank or credit union.

• They offer these services:– Cheque-cashing (for those with no bank

account) – Payday loans– Rapid-refund tax services

Examples:

Alternative Financial Services (Cont’)

Payday loans

• A payday loan is a short-term loan of two to four weeks against your next paycheque.

• Pay day loans are offered by private lenders and cheque cashing outlets.

• You can usually borrow up to 50% of your next paycheque amount.

Pay day loans are very expensive ways to borrow money (up to 400% interest). There are many high service

fees and interest charges. Not a good idea to use this service!!

Alternative Financial ServiceCon’t

Rapid-refund tax services

• These are services you can use to file your income tax return. • They claim to provide “instant refunds”, but these are not tax

refunds. They are really expensive loans.• You get the refund amount right away• The government sends your refund to the tax service, and that

pays off your loan.• If the government denies your tax refund, or if it is smaller

than expected, you still have to pay back the loan to the tax services.

• There are high fees for these services.

There are preparation fees, electronic filing fees, cheque cashing fees, and loan charges. These fees can add up to

hundreds of dollars.

• Meet one-on-one with financial sector volunteers & law students to discuss personal financial issues (e.g. debt management)

• All appointments are confidential• Offered on select Saturdays at 815

Danforth, additional days being added• To book an appointment: – Call (416) 645-6000 ext. 1330– Email: [email protected]

WoodGreen Free Financial Wellness Clinic

mailto:[email protected]

WoodGreen Free Income Tax Clinic

• Multiple locations and days per week available during the Spring

• Appointments offered at 815 Danforth on a more limited basis year-round

• To book an appointment: – Call Tax Line at (416) 645-6000 ext. 1187– Email: [email protected]


ResourcesAcorn Canada www.acorncanada.org• Produced a series of reports on the Payday lending

industry in Canada.

Bank of Canada www.bankofcanada.ca• Information on Canada’s national bank with the

task of preserving the value of our money. • Look for unclaimed bank balances here, find out

the Bank of Canada interest rate and lots of information on our financial system.

Canadian Deposit Insurance Corporation www.cdic.ca• Information on how our money in Canadian banks

is insured against bank failures

Resources (con’t)

Canadian Bankers Association www.cba.ca• The CBA exists to promote an understanding of

the banking industry in Canada• They provide information and research about the

banking system and financial consumer issues.

Credit Union Central www.cucentral.ca• The national voice of the Credit Union system. • Includes information on the credit union model

and a locator for credit unions in your community.

Resources (con’t)Financial Consumer Agency of Canada www.fcac-acfc.gc.ca• This is a financial education and consumer regulation site • It includes information on your rights as a banking

consumer, types of accounts and how to chose a financial institution and products to meet your needs.

Legal clinic drop-in at WoodGreen: 416 645 6000 ext. 2500• Provides free legal support, offered on select Thursday

afternoons at 650 Queen St. East (call for schedule)

Ombudsman for Banking Services and Investments www.obsi.ca• Offer fair and impartial dispute resolution between

participating banking service and investment firms and their customers.

Language-Specific Banking by Phone

Royal Bank of Canada language-specific services:– Call 1 800 769 2511 for services in English– Call 1888 769 2598 for specific services in

Cantonese and Mandarin

Services available by phone:– Self serve day to day banking transactions• Account balances• Bill payments • Transfer of funds

Bank of Montreal language-specific services: • English/ French: 1 877-225-5266• Cantonese & Mandarin: 1-800-665-8800

Services available by phone:– Mortgages/ loans– Investments– Bank accounts/ plans– Life insurance– Direct banking



CIBC language-specific services:• English : 1-800-465-2422 • Chinese: 1-888-898-2828 • Cantonese/ Mandarin: 1-888-298-8822

Services available by phone:– Balances/ bill payments/ and day to day banking– To open a new account/ re-order checks, stop

payments– Apply for or obtain info on a credit card– To invest or obtain info on RRSP& TFSA


Toronto Dominion Bank of Canada language-specific services:– English/ French :1-866-222-3456– Cantonese/Mandarin 1-800-387-2828

Services available by phone:– Bank account/ open a new account– Purchase/ inquire about investments– To report a lost or stolen card– Direct banking

Any Further Questions?Please feel free to contact:Financial Wellness Program

416-645-6000 Ext. [email protected]


Financial Literacy Series:Tuesday March 3rd: OSAP 101

Wednesday March 4th: Budgeting

Monday March 9th: Banking

Wednesday March 11th: Tax 101

Location: Ryerson Student Centre- Thomas Lounge

Thank Youfor your time!

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