Question: How Do Banks Process Transactions (and How Does It Impact Overdraft Fees)?
Aug 18, 2017
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Checking Accounts
Hat tip to Brian Page for making me aware of this interactive from Pew Trusts that provides a visualization tool to show how one customer's transactions were reordered to maximize bank overdraft fees.
Here's the list of transactions (Ms. Gutierrez's order) and students can click on "How Wells Fargo reordered them" to see what the impact is:
__________
This NGPF Checking Project: Overdraft Fee Analysis is a favorite as students analyze checking account agreements to see how different...
Current Events: What's New With Overdraft Fees?
As readers of the blog know, overdraft fees are big profit generators for the big banks. Tens of billions of dollars big. So, what's new? The CFPB sees these large fees (average of $34 per overdraft) and wonders whether consumers really understand what they are signing up for when they opt-in to overdraft protection. This current event is a good opportunity to blend a discussion about policy while helping your students better understand a checking account "gotcha."
Let's start at the beginning....
Question of the Day: Why Can't We Give Up Writing Checks?
By Tim Ranzetta
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Aug 08, 2017
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Checking Accounts, Current Events, Question of the Day, Payment Types
For those educators out there still teaching students how to write checks, you have been vindicated!
From Bloomberg:
In an era of smartphones, online banking, and Venmo transfers, the U.S. still can’t seem to wean itself off paper checks. In most countries, they’ve gone the way of the fax machine and the rotary telephone. But their demise isn’t coming to America any time soon.
Americans still reach for their checkbooks more than anybody else. In 2015, they each made 38...
What Are People Reading on the NGPF Blog?
By Tim Ranzetta
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Jun 26, 2017
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Behavioral Finance, Credit Cards, Investing, Savings, Checking Accounts, Current Events, Quizzes, compound interest, Cryptocurrencies, Retirement
Getting close to the end of June, so I thought it was worth checking our website analytics to see what new blog posts are garnering attention as the school year wound down in many parts of the country.
Here are the top 5:
What is Bitcoin and How Does Cryptocurrency Work?: A Primer; NGPF’s newest team member, Hari Vasu-Devan tackled this challenging topic by providing educators with information they can access when the inevitable student query comes, “Should I be investing in...
What's the Cost Of Financial Ignorance For Young People? Or Why Personal Finance Should Be Required for Graduation!
By Tim Ranzetta
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Jun 12, 2017
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Checking Accounts, Activity, Question of the Day, Research, WebQuest, Current Events, Activities
Answer: $795 Million ANNUALLY in checking fees
You could buy 2 fidget spinners for EVERY American and still some money left over with that amount that young people pay in banking fees
Here were the two key takeaways based on recent research from NerdWallet (spoiler alert: It’s all about the overdraft fees):
The median bank overdraft fee in the U.S., including university-affiliated accounts, is $35 [3], and the average college student overdraws his or her account 2.2 times per year,...
Product Review: Worried About Overdrawing Your Checking Account? There's An App for That!
By Tim Ranzetta
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Apr 30, 2017
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Checking Accounts, Research, Personal Finance, WebQuest, Teaching Strategies, New Products, Current Events
A whole lot of peoples’ pain ($33 billion in overdraft fees) seems like an opportunity to one entrepreneur!
From BusinessInsider:
Mark Cuban was crushed with overdraft fees in his 20s. Now he’s backing an app that’s trying to help people avoid having to pay them. The billionaire has invested in a new app called Dave that aims to predict coming expenses for users to help prevent them from overdrafting on their bank accounts.
Have your students go to Dave.com and review the app:...
Activity Idea: Personal Finance In My Life
By Tim Ranzetta
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Apr 25, 2017
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Activities, Activity, Personal Finance, Checking Accounts, Advertising, Current Events, Taxes
My travels took me to Chicago and New York recently and here are some images related to personal finance that I captured:
Thanks to the Federal Reserve Bank of Chicago for recently co-hosting the Financial Literacy Summit with VISA. I enjoyed moderating the panel on Expanding Access to Financial Education Programs (video for Session 6 here):
Would you take tax advice from a “tax truck?” Seen on the streets of New York the weekend before Tax Day:
What is a collateral loan...
What Are We Watching? Three Of Our Latest Curated Videos
By Tim Ranzetta
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Apr 18, 2017
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Checking Accounts, Research, Credit Cards, Savings, Debit Cards, Payment Types, Teaching Strategies
The NGPF Team is always scouring the web for videos to add to our Video Library. Here are the latest that the team has uncovered:
Pay Day 101: Direct Deposit (from Young Illinois Saves), duration of 3:48, provides a good description of how direct deposit works from the perspective of young adults:
Questions:
In your own words, what is Direct Deposit?
How can you set up Direct Deposit?
Is Direct Deposit safe?
What are the benefits?
Which of the benefits of Direct Deposit means the most to you?
...
Question: Can You Open A Bank Account Online?
Answer: You can, but it’s extremely hard at the 30 largest retail banking institutions. Note that the question was NOT “Can you open an online bank account online?” As that answer would obviously be YES.
From Credit Union Times:
According to a study of nearly 1,400 people who successfully applied for checking accounts at the nation’s 30 largest retail financial institutions, only 8% of successful applicants were able to complete the entire process from start to finish on...
Resource Lists for Financial Educators (courtesy of Barbara O'Neill of Rutgers Cooperative Extension)
By Tim Ranzetta
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Mar 28, 2017
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Activities, Credit Scores, Career, Paying for College, Research, Budgeting, Credit Cards, Identity Theft, Personal Finance, Investing, Mutual Funds, Savings, WebQuest, Financial Literacy, Student Loans, Checking Accounts, Debit Cards, Payment Types, Stocks, Current Events, Insurance, Video Resource, Case Study, Credit Reports, Employment, Quizzes, Entrepreneurship
What does a distinguished professor do during her sabbatical? Curate personal finance resources, of course! In this blog post, Barbara O’Neill shares the fruits of her hundreds of hours of labor in putting together three awesome resource lists (see bottom of post for links to her lists), including what what she considered the “best of the best” from the NGPF library. As she describes below, the purpose of her odyssey was to replenish her “well” of creative...
Question: What Financial Products Should A Young Person Use To Manage Their Money?
By Tim Ranzetta
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Mar 23, 2017
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Writing assignment, Question of the Day, Research, Budgeting, Credit Cards, Checking Accounts, Debit Cards, Teaching Strategies
Hanging out on the Boglehead Forum today skimming the topics that have received the most replies. Forums seem so “old school” in this age of social networks (Facebook, Twitter, SnapChat) but the ones that have survived and thrived have done so for a reason. For those not familiar with the Boglehead Forum, the forum is named in honor of John Bogle, founder of Vanguard Investments, and attracts knowledgeable, thrifty investors passionate about sharing their knowledge in a variety of...
Just Say No To Overdraft Protection!
By Tim Ranzetta
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Mar 16, 2017
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Checking Accounts, Research, Teaching Strategies, Current Events, Article
It’s a $33 billion error that consumers continue to make. From Wall Street Journal:
Banks and other financial firms in 2016 generated the highest level of fees in seven years related to overdrafts on checking accounts, marking a turnaround for a charge crisis-era regulation tried to rein in.
So-called overdraft fees totaled $33.3 billion in 2016, up about 2.5% from 2015 and by 5.4% from 2011, according to Moebs Services Inc., an economic-research firm. Overdrafts occur when consumers make...
The Money Question: Do You Want Overdraft Protection?
By Tim Ranzetta
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Mar 05, 2017
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Checking Accounts, Teaching Strategies, Schools In News, Tips for Teachers
Thanks to Mountain View High for inviting me to their AVID class last week (and for the next 7 Thursdays) to teach personal finance. Today’s topic was “How To Manage Your Checking Account.” I started with the Bank role play activity to highlight the questions that students should be prepared to ask PRIOR to opening an account. Asking the right questions has to be the foundational skill we need to develop in any financial education course.
The students responses included the...
Video Resources: Avoid Those Checking Account Fees
It’s often the first financial product that a young person will use. Maybe they start with a savings account but eventually they graduate and pair their savings account with a checking account. In that process of setting up this new account, the customer will be asked (or they should be) whether they would like “overdraft protection.” The term sounds innocuous and better yet lures them in after all who doesn’t want to be protected. Have your students watch one or more of...
Question: In What Year Was The First A.T.M. Installed (And Other Fun Facts About Banking)?
Answer: 1969.
Good opener to this 1,000 word article (about 5 minutes reading time) on the history of banking from NerdWallet. Here are a few interesting points (some of which I even remember!):
During Civil War, government levied a tax on the use of banknotes
FDIC originally insured deposits up to $5,000 in 1934 (that would be $91,000 in today’s dollars)
Banks used to give out appliances to encourage consumers to set up accounts: “New customers received prizes when they opened...
