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Money Smart Program (offered by FDIC)

Money Smart is the FDIC's award-winning financial education curriculum designed to help consumers understand basic financial services, develop money-management skills and learn how to use banking services effectively.  The Money Smart curriculum is a timely tool to educate those who want to manage their finances efficiently, including consumers without a banking relationship. 

To learn more about the FDIC's Money Smart Program and to obtain a free copy of the curriculum, visit the Money Smart page on the FDIC's website at www.fdic.gov/moneysmart.

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How to Complete a Check

Follow this step by step guide to learn how to correctly complete a check.
The most basic part of having a checking account is learning how to write a check.  Whether you are 15 or 55 you need to know how to complete this task if you plan to have an account at the bank.  Below you will learn parts of a check and step-by-step instructions on how to write a check.

  1. A.  Drawer:  The particular individual, company, or corporation issuing and signing the check.
  2. B.  Payee:  Particular individual or company receiving the funds.
  3. C.  Check Number:  Check number will be preprinted and is used for tracking funds.
  4. D.  Date:  Current date.
  5. E.  Printed Amount:  The amount of the check
  6. F.  Authorized Signature:  The person authorized to sign the check for the Drawer(A)
  7. G.  Account Number:  Particular individual’s or organization’s account number upon which the check is drawn.
  8. H.  Routing Number:  Number assigned to your bank by the Federal Reserve Bank.
  9. I.   Memo Line:  Area where you can make a note for why the check was written.
  10. J.  Drawee Name:  Bank where funds are drawn from.
  11. K.  Written Amount:  Usually written or typed amount of the check.  Must match with the Printed Amount (E).

Helpful Hints

  • Write in ink so nothing can be changed.  Always write in black ink so your check images will be clean and concise.
  • Write clearly and neatly.
  • Fill in all blank lines with proper information.
  • Never sign a check until all the other information on the check has been completed and you are at the bank ready to make a deposit.

Signing Checks
Before you can cash or deposit any check, you must endorse it (sign the back). Most all checks have the proper section on the back designated where you should sign. 

  • “Blank Endorsement” is the signature of the person to whom the check is written.  After a check has been endorsed anyone can then cash the check (to ensure safety you should only endorse a check when you are prepared to make a deposit).
  • “Restrictive Endorsement” states that the check is only to be deposited.  On the back you may write “For Deposit Only” and sign your name under it.  This is the endorsement to use when mailing a deposit to the bank. 
  • “Special Endorsement” makes a check payable to a third party and prevents anyone else from cashing it.

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How to Complete a Deposit Slip

Follow this step by step guide to learn how to correctly complete a deposit slip.
The only thing you need is a check and/or cash and a deposit slip.  The deposit slip can be found at the back of your checkbook.  It includes your name, your account number and how much you are depositing.  This ensures that the money gets credited (added) to the right account.  Be sure to endorse (sign) each check that you plan to deposit.  When your deposit is complete, make sure to obtain a receipt for your records. 

Ways to make a Deposit: 

  • In person at your local Community Office.
  • If you are not able to make it to the bank during business hours, you can also use our ATM or Night Depository Box.  Just remember to always use a deposit slip with your transaction. 
  • You can also use Direct Deposit.  Direct Deposit is most commonly used for paychecks and social security checks.  Speak to an account representative about setting up a direct deposit.
  1. A.  Account Holder:  Name and address of checking account holder.
  2. B.  Date: Enter Date of Deposit
  3. C.  Authorized Signature: Sign your name on this line if you want cash back (J)
  4. D.  Drawee Bank: Name of Financial Institution where you have deposit account.
  5. E.  Routing Number: Number assigned to your bank by the Federal Reserve Bank.
  6. F.  Account Number: Particular individual’s or organization’s account number where deposit is going.
  7. G.  Cash Amount: Enter the total amount of Cash and coin you are depositing
  8. H.  Checks:
    1. List the check number and amounts of each check you are depositing. 
    2. If more space is needed, there are more lines on the back of the deposit slip.  You will need to add up all the check amounts on the back side and enter amount on front of slip.  
    3.  If you are depositing checks, you will need to endorse the back of each check.
  9. I.   Subtotal: Add up Cash and all checks and enter amount on this line.
  10. J.  Less Cash Received:
    1. Enter amount of money you would like to have back on this line. 
    2. If getting cash back will need to have Authorized Signature (C)
  11. K.  Total: Subtract Cash Received (J) from Subtotal (I) to get the total deposit.  
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Balancing Your Checkbook 

This step by step guide will give you information on balancing your checkbook.
Balancing is the single most important aspect of good money management.  Most Americans don’t take the time to go through with this task; some think it takes too long, others just don’t know how to get started.  We would like to take you though the process step-by-step. 

First you will need your Checkbook Register (A) and your monthly Bank Statement (B)

(A) Checkbook Register

(B) Bank Statement:

Step 1: Make sure that each check entered has been subtracted, that all deposits have been added, and that any withdrawals have been subtracted in your checkbook register

Step 2: Check off each check, deposit and withdrawal shown on the bank statement (A, B, C, D, E, F, G) with its corresponding checks, deposits and withdrawals written in the checkbook register

Step 3: Write down and total the amounts of all the Payment Amounts in the register that are not shown on the bank statement.  These are the checks that have not yet been cashed and are still outstanding from the bank. (in example that would be check # 100 (1) and #102 (2) items in checkbook register without a checkmark)

Step 4:  Subtract this total from the ending balance shown on the bank statement.

Step 5: Add to this amount any deposits that weren’t checked off your Check Register. 

Once you complete these steps, the number you get should match the last balance from your Checkbook Register.  If the two numbers do not agree, go back and try to find your error.  Check for adding or subtracting error or if you forgot to enter a check, a deposit or withdrawal.  

Steps 1 & 2:  

 

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Establishing Credit 

If you are looking to establish credit for the first time, lenders have to examine factors that can help them decide if you are a credit risk or not.  You need to start in a small way and build up slowly. 

Start with your bank – There are a few things you can do that can help in your quest for establishing credit.  The first thing you should do is open and maintain a checking and possibly even a savings account at your local bank.  

This is helpful because: 

  • When you have active bank accounts in good standing, you are proving that you can manage money.  While bank accounts aren’t typically a part of your credit score, lenders can use this information to determine whether or not you are a credit risk.
  • Establishing a relationship with a bank will improve your chances in obtaining a loan or credit card through them.  If you already do business with a bank, they should be the first place to look. They know you and they value your business.  This existing relationship should carry some weight when seeking credit. 

Obtain and maintain a job - Employment history is another important factor lenders look at.  They want to see if you are able to hold a job or if there are periods of unemployment.  Your ability to hold a steady job can improve the likelihood of getting approved.  Even a part-time or summer job can help when trying to establish credit.     

Open a Credit Card - Credit cards can play a vital role in establishing your credit history, so they should not be avoided.  Instead, credit cards should be used to help build a solid credit history and the balance should be paid in full each month.  This will allow you to establish credit while not having to deal with finance charges and long repayment periods.  Always remember to use credit cards responsibly and stay within your limit and make your payment on time.

Establish accounts in your name - Even without a credit history, it is possible to sign up for many accounts in your own name.  This could include cell phone or car insurance.  Just having your name on these accounts won’t establish a credit score, but it can be helpful for first-time borrowers.

Secured Credit – This is credit backed by property you own, like an auto loan...  It means that there is an asset linked to the account that the lender can take if you fail to make payments. 

Establishing a good credit history takes time. There are no shortcuts or tricks that can take you from no credit at all to a high score in a matter of months or even a few years.  And, it is much better to acquire credit slowly and assemble a strong credit record than to apply for too many credit cards or a loan that is larger than you can handle.  Your credit is based on a number of factors such as payment history, length of time you’ve had credit, and much more. So, while it is important to initially establish credit, it is even more important to take the time to do the right things to maintain good credit. Once you show good credit management, buying a car or maybe a home, will be much easier.     

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Maintaining Good Credit

There are several things you can do to keep your credit under control and build a good credit rating.

Establish a Budget – A budget helps you set goals for your future as well as for your money.  Your budget is your roadmap for earning, spending, borrowing and saving money. 

Start by creating a simple budget.  It doesn’t take long, but if you take the time to analyze your income and where you’re spending money you can get a better idea of where your money is going and where you can cut back.  After all, if you end up spending more money than you have coming in you’re likely to end up with problems that could possibly ruin your credit. 

Take note and track your spending carefully, it’s easy to waste money on things instead of saving it for future needs.  This is the perfect time in your life to start with the basics – make your budget, set your spending and saving goals and save for what you truly want. 

Plan to place some money into an emergency fund.  It is a good idea to keep an emergency savings fund of three to six months’ living expenses, in case an unexpected expense occurs.

Know your credit limit and your balance - Every month make a habit to look at your bank statements and billing statements from credit card companies. 

Track your spending by keeping records of checks you've written, credit card transactions and ATM card usage. Monitor your bank account by balancing your checkbook and review your monthly statements when they arrive so you can report any possible discrepancies immediately. 

Establish Good Credit Habits - 

  • Be organized.  Put all your bills in one place so you don’t lose them or forget about them.  Keep a list of the bills and pay attention to the due dates. This ensures your payment arrives on time.  Mail your payment or schedule an online payment through Bill Pay at least a week before the due date.
  • Make timely payments and pay off credit card balances in full each month.  On-time payments are very important to good credit. 
  • Contact your lenders immediately if you fall behind on your payments. Most creditors are willing to set up alternative payment options, especially if you inform them right away of your situation.

Don’t get careless with your finances. It’s easy to make a mistake but realize that those mistakes can prove costly even later in life.  If you are going to utilize credit cards or other loans, just make sure you make your payments on time and don’t get in over your head.  Remember, missed payments and other negative marks will remain on your credit history for seven years.  That one late payment you made today can affect you in the future when you are trying to purchase a new car or a new home.  

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Monitoring Your Credit

Monitoring your credit can be accomplished in a couple different ways.  

Check your credit report – A credit report is a record of your credit activities.  It lists any credit card accounts or loans you may have, the balances and how regularly you make your payments.  It also shows if any action has been taken against you because of unpaid bills. 

To avoid any unwelcome surprises, it’s important to see a copy of your credit report before you apply for credit such as a car loan.  This will give you an opportunity to clean up any discrepancies or errors.  When you get your credit report, review it carefully to make sure all the loans and credit accounts listed really belong to you and that all the accounts listed as open are actually current loans or balances.  If a loan you’ve paid off or a credit card that was cancelled is still listed as open, contact the credit bureau and ask for the report to be corrected.  

Ideally, you should check your credit report once a year with each of the three credit bureaus, Equifax, Trans Union and Experian.  You’re entitled by law to one free copy of your credit report every 12 months.  You can access your free credit report by visiting – www.annualcreditreport.com

Lenders look at your credit report to determine your credit worthiness.  They will take the following into consideration when reviewing your application:

  • Your payment history – do you pay bills on time?
  • Have you had a bill referred to a collection agency?
  • How much debt do you have outstanding compared to your credit limits? The closer your debt is to your credit limit, the less favorable.
  • How long is your credit history?  If you haven’t had much of a credit history yet, prompt payments are even more important.
  • Have you applied for more credit lately?  Too many applications for credit have a negative impact on your chances for approval.
  • How many credit accounts do you have?  Too many is considered a negative.

Information is retained in your credit report for up to seven to ten years. If you have negative items in your history, you can gradually repair your credit by consistently paying your bills on time from now on, paying down your balances and not taking on any new debt. Lenders will take your improved record into consideration when deciding whether to approve credit, especially if you've been paying on time for at least a year.

Know your credit score - Your credit score or FICO score is another factor a company uses when deciding to extend credit.  This is a measurement of a borrower’s credit risk.  The score is based on a borrower’s credit history and many other credit factors.  Your FICO score is a vital part of your credit health.  When you’re applying for credit - whether it’s a credit card, a car loan or personal loan – lenders want to know your credit risk level.  Generally, the higher the score, the less risk the person represents.   You will be given an opportunity to purchase a credit score from any of the nationwide credit reporting agencies after you receive your free annual credit report from any of them in response to a request made through this website.

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Protecting Your Credit

Identity theft and credit fraud can damage your credit history.  Protect your credit and lower your risk of identity theft by taking preventative measures.        

Question unsolicited phone calls or emails - Never give out personal information to unsolicited contacts.  Be wary of e-mails from your bank or other organizations you do business with asking for you to verify your password.  Most banks do not send these types of e-mails and it is likely the e-mail is fraud.  If someone calls claiming to be from your bank and requests account information do not give this information out.  Be especially wary of those requesting account information to “award a prize” or “verify a statement.”  Please notify your bank immediately if you receive calls or emails looking for account information; the bank can then research the possible fraud.    The only time your bank will ask for your personal information is when you initiate the phone call.  This information is needed to verify your identity.  

Guard your personal information - Ask “why” when you’re asked for personal information.  It’s your right to know why it’s needed and how it will be used.  Don’t give out your Social Security Number, bank account, driver’s license or credit card numbers unless you’re absolutely sure how they’ll be used.  Never loan your credit card, ATM card or passwords to anyone who is not authorized on your account.  Do not share your account numbers with anyone unless you initiated the contact.  When choosing passwords or PIN number for ATM and online banking, avoid using obvious or easily obtainable information.  Don’t share your passwords with anyone or write them down.  Keep personal numbers off your checks; never preprint your driver’s license or Social Security number on your checks.      

Credit/Debit Cards and Checks -  Sign your credit cards and debit cards immediately.  If you lose them or they’re stolen, anyone can sign and spend freely.   Store new and cancelled checks securely; review new checks to make sure none were stolen in transit.  Be aware of the expiration date on your credit card; if you do not receive a reissued card before the expiration date, notify your bank.  Report lost or stolen checks and cards immediately.  Carry only the cards you expect to use and keep the other in a safe place.  Maintain a list of account and telephone numbers of the companies that issued your cards.  Then, if the cards are lost or stolen, you can notify the companies quickly.  It is important to contact companies immediately to report lost or stolen cards.  

Shredding important documents -  Take care when throwing away old bills or papers with private information.  Shredding is your best option.  Credit card offers and other financial offers should be thrown away with care as well.  You should always shred unnecessary financial documents, including old bank statements, invoices, sales receipts, ATM receipts and unwanted pre-approval credit offers.  

Billing Statements -  Promptly retrieve incoming mail and don’t put outgoing mail in your residential mailbox.  If regular bills or statements stop reaching you, take action.  Call the company’s customer service numbers.  Someone may have filed a false change of address notice to divert your mail.  When reviewing your bills, don’t ignore suspicious charges.  If doubtful or unauthorized charges appear on your bills or statements, call bank or organization immediately You are responsible for notifying the creditor in writing within 60 days for receiving the bill. You should include your name, account number, the item you believe is in error and the reason why.        

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