Finding a Bank for the Brennans

Learning Objective: use online services to shop for a checking account

The Brennan household recently learned that their bank was shut down by state regulators. Since all of
their money was covered by FDIC insurance, they did not lose any money, but they do need a new bank.
They have compiled the following list of characteristics that are important to them. They want the
following:

 Low checking account fees

 They need their bank to have a physical branch in the 11756 zip code.
 Online banking
 Banking app
 Credit union or bank
 They can deposit $300 in their checking and $500 in their savings.
 Average amount they keep in their checking account: $250
 Lowest amount they keep in their account: $1

1. Identify two financial institutions (Banks or Credit Unions) and compare them to see if which one
meets all of this family’s preferences. One should be a big bank like Chase, Citi, Capital One, HSBC, TD,
etc. The second one should be a small local bank like Bethpage Federal Credit, Jovia, Sterling, Teacher’s
Federal Credit Union, etc. You will see there are important differences between large and small banks.

Institution A __Capital One ______________________________________________________________

Institution B __Sterling ________________________________________________________________

2. Looking at an entry level checking account, list 5 to 10 fees charged by each institution. Compare
these fees and note which financial institution is best.

Institution A Institution B
Type of Fee Fee Amount Type of Fee Fee Amount
Monthly maintenance $0 Monthly maintenance $0
ATM of the Institution Free ATM of the Institution Free
ATM of other Free ATM of other $1.75
institutions institutions
Card Replacement Free Card Replacement free
Saving transfer Free Saving transfer free
Overdraft Next day $35 Overdraft $32
grace
Statement Copy $5 Statement Copy Free
Incoming Domestic $0 Incoming Domestic $0
wire transfer wire transfer
Outgoing Domestic $40 per Transfer Master Money Free
 Wire Transfer

Best Institution ______Capital One _____________________________________________________

3. Next, look at the required amount to open both a personal checking and savings account; sometimes
you are required to open both at the same time—make sure you note this! Compare and select the best
financial institution. A lower minimum is better.

Institution A Institution B
Type of Account Minimum Amount Type of Account Minimum Amount
360 Checking $0 Freedom Checking $100
360 Performance $0 Sterling Saving $0
Saving

Best Institution _____ Capital One_______________________________________________________

4. Savings accounts often earn interest, and occasionally checking accounts do as well. Find the interest
on the three types of checking and savings accounts that require the lowest initial deposit and list them
below.

Institution A Institution B
Name of Account Interest Name of Account Interest
360 Performance 0.5% Personal Saving 0.2%
Saving
Kids Saving 0.4% Statement saving 0.2%
360 IRA Saving 0.5% Individual Retirement 0.2%
360 Checking 0.1% Personal Checking 0.05%
Money teen 0.1% SBT advantage Eagles 0.1%
SBT advantage 0.0%
Freedom

Best Institution ____ Sterling ___________________________________________________________

5. Online services are often a big part of what attracts someone to a banking institution. Find out
whether these entry level accounts offer the following:

Institution A Institution B
Available? Available?
Online Banking Yes Yes
 Banking App Yes Yes
Paperless Statements Yes Yes

Best Institution ____Both institutions are equally good _________________________________

6. Savings tools are important in appealing to customers who have large deposits. Give a point to the
institution that has the lowest minimum deposit for certificates of deposit (CDs) and record the
minimum deposit.

Institution A Institution B
Description Amounts Amounts
CD Minimum Deposit
Rates Rates
1-Year CD 0.2% 0.45%
2-Year CD 0.25% 0.70%
5-Year CD 0.45% 0.85%
10-Year CD N/A N/A

Best Institution ______ Sterling _________________________________________________________

7. For short-term savings, money market accounts (MMA) are often available to a financial institution’s
customers. Fill in a number in each category if available. Assign a point to the institution that is better in
each category.

Institution A Institution B
Amount Amount
MMA Minimum Deposit $10000 $500
Rate or Yield 0.29% 0.35%

Best Institution ___ Sterling _____________________________________________________________

8. Financial institutions generally make their money through loans. Find out which of your institutions
has better rates on the following types of loans. Fill in the rates if quoted below.

Institution A Institution B
Description Rates Rates
Student Loans
Auto Loans
 Mortgage
Home Improvement Loans
Personal Loans
Revolving Loans
Credit Cards

Best Institution ________________________________________________________________________

9. The Brennan’s have a daughter who is in college. They would like a bank with a good student
checking account for her:

Institution A Institution B
Available? Available?
Student Checking Available NO NO
Benefits N/A N/A

Best Institution ____Both of the banks lack a student checking account__________________________

10. So which financial institution is better for the Brennan’s?

The Sterling is the best for the Brennan’s

11. After looking at these two financial institutions are you happy with the bank you use or are there
better options out there?

Am happy with my financial institution since the rates are almost similar to the Capital one bank which is
among the leading banks in the USA.

12. Jessica is balancing her checkbook. Her bank balance shows $1,242 and her checkbook records
(where she records her transactions) shows $450. She has outstanding checks recorded on her
checkbook records that have not yet cleared for $795. Her bank balance has interest of $1 and a fee for
$4. Reconcile Jessica’s checkbook balance and bank balance.

Bank Balance $1,242

Outstanding Check $795
Fee $4
Interest $1
Less transactions $450
Adjusted Bank Balance $-7