May 2, 2023 • 11 mins
Host: Mindy McCulley, Extension Specialist for Instructional Support, Family and Consumer Sciences Extension, University of Kentucky
Guest: Kelly May, Senior Extension Associate for Family Finance and Resource Management
Season 5, Episode 34
Banking is for anyone and everyone. Whether you have never had a bank account, or you have had banking challenges in the past, Kelly May discusses banking options for you on this episode of Talking FACS. Banks and credit unions have many options for all different types of consumers from those who just need a place for their direct deposit to land to those who want to establish savings and checking accounts for the long term.
For more information about this topic and other MoneyWi$e topics, visit:Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Welcome to Talking FACs.
What you need to know about family food finance and fitness.
This nationally recognized award-winning podcast is hosted by the University of Kentucky Family and Consumer Sciences Extension Program.
Our educators share research knowledge with individuals,
families and communities to improve quality of life.
(00:25):
Hello and welcome to Talking FACS.
What you need to know about family food finance and fitness.
I'm your host,
Mindy McCulley,
Family and Consumer Sciences Extension Specialist for instructional support at the University of Kentucky.
My guest today is Kelly May Senior Extension Associate for family finance and resource management.
(00:45):
Welcome,
Kelly.
Thanks for having me.
Our topic today is anyone can bake.
And of course,
as always,
we talk money wise at the beginning of the month.
And so this is a great topic for people who are starting out their money journey or for someone who maybe has not had a relationship with their bank or with any bank.
(01:08):
And this is a great opportunity for them to learn how they can begin banking.
Yeah,
a recent study found that more than 5% of Kentucky households are unbanked,
meaning they don't have a checking or savings account at a bank or a credit union.
So we want to look at some of the barriers that keep people from banking and also consider some of the benefits.
(01:31):
Um There,
you know,
there's some good reasons why you might want to think about it.
So we were talking just a few minutes ago.
I have been in the banking industry on both sides.
Not only do I bank myself,
of course,
but I worked in banks and I've worked in credit unions.
And so it's hard for me to believe that there are people out there who don't bank because I have had such a relationship with them my whole life.
(01:55):
But what is the most common reason for people who do not use a bank?
The survey found that people worry they didn't have enough money to meet minimum balance requirements set by banks and credit unions.
So this can vary widely by the type of account or the bank or the credit union,
what their rules are.
So even if 11 account doesn't meet your needs,
(02:18):
there may be another one at the same institution that would work for you or you could visit a different bank or a credit union because they can have completely different products.
Checking accounts are going to have some kind of minimum balance requirement and that's just to make sure there's enough money to cover your checks,
your debit card transactions and any ATM visits you might make.
(02:39):
So you know,
with the checking account,
you have more traffic,
you might say you've got transactions coming in and going out and most likely going out.
So you want to make sure you have enough money in there to cover those,
want to say that bank fees should never be a surprise.
They are required to disclose what their fees are.
(03:00):
So they have to tell you all of the rules for their accounts and when they charge you and when you know,
when you can get an account for free and,
and so you can follow those rules to find the best account situation for yourself.
Also,
with the ability to do mobile banking,
a lot of people have phones now and you can do banking right on your phone.
(03:21):
So even if internet is scarce in your area,
you may be able to use your cell phone service to do your banking um or use online banking.
So you don't even have to use the bank in your local town.
You can find the right bank and the right product for you.
Well,
and that might be a barrier to some people if the banking hours,
which that's always been a big joke about bankers' hours.
(03:43):
But if the banking hours are not convenient to you,
that might be a reason why some people are unbanked but doesn't have to be a reason anymore if you don't actually have to go into the bank to do your transactions.
So what is an another concern that people might have?
So the next biggest concern is trust.
There are people who just don't trust banks.
(04:05):
Um There are others who avoid banks because they're trying to keep their privacy for one reason or another.
But I do want to say that banks and credit unions are a very safe place for your money.
They both provide deposit insurance for your accounts which protects your money if anything happens to the institution.
So you,
I know of a situation where a bank was destroyed by a tornado.
(04:27):
For example,
the FDIC came in,
the state regulator came in and they had a remote location open the very next day,
even though the bank was gone.
So people could get their money after the storm and do repairs and buy things that they needed.
So it's a good place to keep your money,
it's safe.
You know,
because of that insurance,
(04:47):
it's,
it's a safer place to put your money than under your mattress or in a money jar because if that tornado comes your mattress and your money jar might be gone.
So your bank will still be there.
And also they are examined regularly by government agencies.
So that ensures the safety,
the soundness and um make sure that they have the consumer protections in place.
(05:08):
We have seen on the news in the last couple of months,
some big banks in the national scheme of things that have had some problems and the FDIC has swept right in and taking care of things to ensure that,
that their depositors have been safe.
And so that just is another way of establishing that trust so that people are not concerned about their money.
(05:33):
And I know that my local bank sent an email out,
you know,
within a couple of days and said your money is ok,
you don't have to worry.
And so I think that that's one of the,
the things that,
that banks are more cognizant of is making sure that,
that they,
they have a relationship with the people that keep money in their trust in their,
in their safety.
(05:55):
So what are about people who have made banking mistakes in the past?
Does that kind of make some trepidation?
Some?
Yeah.
So it can,
it can make you worry if you've had,
if you've had a problem in the past,
if you've had an account closed and maybe you had some insufficient funds or,
or something has happened and,
and you've had to kind of abandon that account.
(06:16):
It,
that doesn't mean that you can't start over.
So you can find out why if,
if you try to go have an account and you find that you have been denied,
you can find out why.
So you can take some steps and you can start over.
So it's not the end of the road.
You can,
you can have a second chance.
And first of all,
ask the bank employee why you were denied.
(06:37):
So under the Fair Credit Reporting Act,
they are required to tell you and you can even get a copy of the screening report.
They used to make that decision and you can dispute anything that's incorrect.
So if you see something on there that's wrong,
you can contact them and get that fixed.
If there's things on there that are correct and they're just telling you no,
(06:58):
so that can happen.
And if it does,
you can look for an institution that offers a type of account that can get you started again.
So there's two different options.
You might look for one of them is called a second chance account and the other one's a secured account.
So a second chance account might have extra limits in place and it kind of helps guide you as you establish your account.
(07:20):
So it sort of gets you started.
It's sort of like an account with rails,
right?
Like uh like a bowling alley.
You don't have to worry about those gutter balls.
They're gonna have the rails up and they're gonna help you.
A secured account is a little bit different.
You actually start the account with a deposit that you make from yourself.
So normally you would put a deposit in a savings account and let it sit.
(07:41):
So it's kind of like that,
but it offers all the features of a checking account so that you can fund your account for a while to show that you're a good customer.
And then after a certain amount of time they'll let you move into a regular account if you have done all the things.
So,
what if I use other services instead of a bank?
Oh,
there are so many things out there now,
(08:02):
aren't there?
There's,
um,
so we talked about mobile banking and there's certainly other things you can do on your phone.
Right.
So we have Venmo,
paypal Cash app and a number of other apps out there that you can use to transfer money.
I would caution that that shouldn't be a way to hold your money though because those services don't offer that FDIC insurance.
(08:24):
Um,
so those don't have the same protection.
So you don't wanna use those to store your money,
although you can use them to,
to pay somebody else or to pay a bill to transfer money.
Some people still use money orders.
Those can cost a lot of money,
you know,
you gotta pay for each one.
So even though bank accounts might have fees,
money orders have fees too,
(08:44):
so it's worth looking to see if one is more cost effective than the other.
And you might be surprised,
it might be the bank.
It's cheaper in the long run prepaid cards.
A lot of people use prepaid cards,
they can have high fees and the other thing is like cash,
they can be lost or stolen.
So again,
the bank would offer those protections using a bank account offers you the convenience of direct deposit,
(09:08):
which provides access to your funds sooner than if you deposit a check.
So if you go in and,
and do that direct deposit,
that money is available instantly and you can already start using it.
And then of course they offer efficient ways to pay bills.
You know,
you can write checks,
you can use online options.
you can do those mobile pay if they offer those features.
(09:28):
So sometimes it can be less expensive than buying money orders or other products.
Well,
and I like to encourage people to start relationships with banks or credit unions when Children are young.
And so,
you know that I have a grandchild,
we established a savings account for her at a very young age and she now enjoys at three,
(09:52):
going in and making her own deposits.
Um And so she,
you know,
will waive her,
her receipt proudly when she puts her money in.
And so that kind of establishes that relationship at an early age so that when she gets to the point where she's earning her own money and,
and that sort of thing,
then it won't be intimidating for her when she gets older.
(10:13):
That's true.
And that's wonderful if you can do that for your family and,
and have that conversation and communicate about what you're doing and why and some of our own banked families may not have had that experience.
They may not have had somebody guide them through their first account experience.
So you can even have that as an adult,
but it's even better if you start young.
(10:35):
Exactly,
Kelly,
thank you so much for taking the time to share with us all of the benefits of opening and enjoying the benefit of banking and how it can make your money work for you as we've talked about in the past.
I'm glad to share.
Thanks for having me.
If you are just tuning in,
(10:55):
you are listening to Talking FACS and you can find us wherever you listen to your favorite podcast.
Thank you for listening to Talking FACS.
We deliver programs focusing on nutrition,
health,
resource management,
family development and civic engagement.
If you enjoyed today's podcast,
have a question or a show topic,
idea.
(11:15):
Leave a like and a comment on Facebook at UK F CS E X T or send us an email at UK F CS E X T at UK Y dot E D U.
Visit us online at F CS dot UK Y dot U to learn more about the University of Kentucky Family and Consumer Sciences Extension Program or contact your local extension agent for Family and Consumer Sciences.
(11:42):
We build strong families,
we build Kentucky.
It starts with us.
Welcome to Talking FACs.
What you need to know about family food finance and fitness.
This nationally recognized award-winning podcast is hosted by the University of Kentucky Family and Consumer Sciences Extension Program.
Our educators share research knowledge with individuals,
families and communities to improve quality of life.
(00:25):
Hello and welcome to Talking FACS.
What you need to know about family food finance and fitness.
I'm your host,
Mindy McCulley,
Family and Consumer Sciences Extension Specialist for instructional support at the University of Kentucky.
My guest today is Kelly May Senior Extension Associate for family finance and resource management.
(00:45):
Welcome,
Kelly.
Thanks for having me.
Our topic today is anyone can bake.
And of course,
as always,
we talk money wise at the beginning of the month.
And so this is a great topic for people who are starting out their money journey or for someone who maybe has not had a relationship with their bank or with any bank.
(01:08):
And this is a great opportunity for them to learn how they can begin banking.
Yeah,
a recent study found that more than 5% of Kentucky households are unbanked,
meaning they don't have a checking or savings account at a bank or a credit union.
So we want to look at some of the barriers that keep people from banking and also consider some of the benefits.
(01:31):
Um There,
you know,
there's some good reasons why you might want to think about it.
So we were talking just a few minutes ago.
I have been in the banking industry on both sides.
Not only do I bank myself,
of course,
but I worked in banks and I've worked in credit unions.
And so it's hard for me to believe that there are people out there who don't bank because I have had such a relationship with them my whole life.
(01:55):
But what is the most common reason for people who do not use a bank?
The survey found that people worry they didn't have enough money to meet minimum balance requirements set by banks and credit unions.
So this can vary widely by the type of account or the bank or the credit union,
what their rules are.
So even if 11 account doesn't meet your needs,
(02:18):
there may be another one at the same institution that would work for you or you could visit a different bank or a credit union because they can have completely different products.
Checking accounts are going to have some kind of minimum balance requirement and that's just to make sure there's enough money to cover your checks,
your debit card transactions and any ATM visits you might make.
(02:39):
So you know,
with the checking account,
you have more traffic,
you might say you've got transactions coming in and going out and most likely going out.
So you want to make sure you have enough money in there to cover those,
want to say that bank fees should never be a surprise.
They are required to disclose what their fees are.
(03:00):
So they have to tell you all of the rules for their accounts and when they charge you and when you know,
when you can get an account for free and,
and so you can follow those rules to find the best account situation for yourself.
Also,
with the ability to do mobile banking,
a lot of people have phones now and you can do banking right on your phone.
(03:21):
So even if internet is scarce in your area,
you may be able to use your cell phone service to do your banking um or use online banking.
So you don't even have to use the bank in your local town.
You can find the right bank and the right product for you.
Well,
and that might be a barrier to some people if the banking hours,
which that's always been a big joke about bankers' hours.
(03:43):
But if the banking hours are not convenient to you,
that might be a reason why some people are unbanked but doesn't have to be a reason anymore if you don't actually have to go into the bank to do your transactions.
So what is an another concern that people might have?
So the next biggest concern is trust.
There are people who just don't trust banks.
(04:05):
Um There are others who avoid banks because they're trying to keep their privacy for one reason or another.
But I do want to say that banks and credit unions are a very safe place for your money.
They both provide deposit insurance for your accounts which protects your money if anything happens to the institution.
So you,
I know of a situation where a bank was destroyed by a tornado.
(04:27):
For example,
the FDIC came in,
the state regulator came in and they had a remote location open the very next day,
even though the bank was gone.
So people could get their money after the storm and do repairs and buy things that they needed.
So it's a good place to keep your money,
it's safe.
You know,
because of that insurance,
(04:47):
it's,
it's a safer place to put your money than under your mattress or in a money jar because if that tornado comes your mattress and your money jar might be gone.
So your bank will still be there.
And also they are examined regularly by government agencies.
So that ensures the safety,
the soundness and um make sure that they have the consumer protections in place.
(05:08):
We have seen on the news in the last couple of months,
some big banks in the national scheme of things that have had some problems and the FDIC has swept right in and taking care of things to ensure that,
that their depositors have been safe.
And so that just is another way of establishing that trust so that people are not concerned about their money.
(05:33):
And I know that my local bank sent an email out,
you know,
within a couple of days and said your money is ok,
you don't have to worry.
And so I think that that's one of the,
the things that,
that banks are more cognizant of is making sure that,
that they,
they have a relationship with the people that keep money in their trust in their,
in their safety.
(05:55):
So what are about people who have made banking mistakes in the past?
Does that kind of make some trepidation?
Some?
Yeah.
So it can,
it can make you worry if you've had,
if you've had a problem in the past,
if you've had an account closed and maybe you had some insufficient funds or,
or something has happened and,
and you've had to kind of abandon that account.
(06:16):
It,
that doesn't mean that you can't start over.
So you can find out why if,
if you try to go have an account and you find that you have been denied,
you can find out why.
So you can take some steps and you can start over.
So it's not the end of the road.
You can,
you can have a second chance.
And first of all,
ask the bank employee why you were denied.
(06:37):
So under the Fair Credit Reporting Act,
they are required to tell you and you can even get a copy of the screening report.
They used to make that decision and you can dispute anything that's incorrect.
So if you see something on there that's wrong,
you can contact them and get that fixed.
If there's things on there that are correct and they're just telling you no,
(06:58):
so that can happen.
And if it does,
you can look for an institution that offers a type of account that can get you started again.
So there's two different options.
You might look for one of them is called a second chance account and the other one's a secured account.
So a second chance account might have extra limits in place and it kind of helps guide you as you establish your account.
(07:20):
So it sort of gets you started.
It's sort of like an account with rails,
right?
Like uh like a bowling alley.
You don't have to worry about those gutter balls.
They're gonna have the rails up and they're gonna help you.
A secured account is a little bit different.
You actually start the account with a deposit that you make from yourself.
So normally you would put a deposit in a savings account and let it sit.
(07:41):
So it's kind of like that,
but it offers all the features of a checking account so that you can fund your account for a while to show that you're a good customer.
And then after a certain amount of time they'll let you move into a regular account if you have done all the things.
So,
what if I use other services instead of a bank?
Oh,
there are so many things out there now,
(08:02):
aren't there?
There's,
um,
so we talked about mobile banking and there's certainly other things you can do on your phone.
Right.
So we have Venmo,
paypal Cash app and a number of other apps out there that you can use to transfer money.
I would caution that that shouldn't be a way to hold your money though because those services don't offer that FDIC insurance.
(08:24):
Um,
so those don't have the same protection.
So you don't wanna use those to store your money,
although you can use them to,
to pay somebody else or to pay a bill to transfer money.
Some people still use money orders.
Those can cost a lot of money,
you know,
you gotta pay for each one.
So even though bank accounts might have fees,
money orders have fees too,
(08:44):
so it's worth looking to see if one is more cost effective than the other.
And you might be surprised,
it might be the bank.
It's cheaper in the long run prepaid cards.
A lot of people use prepaid cards,
they can have high fees and the other thing is like cash,
they can be lost or stolen.
So again,
the bank would offer those protections using a bank account offers you the convenience of direct deposit,
(09:08):
which provides access to your funds sooner than if you deposit a check.
So if you go in and,
and do that direct deposit,
that money is available instantly and you can already start using it.
And then of course they offer efficient ways to pay bills.
You know,
you can write checks,
you can use online options.
you can do those mobile pay if they offer those features.
(09:28):
So sometimes it can be less expensive than buying money orders or other products.
Well,
and I like to encourage people to start relationships with banks or credit unions when Children are young.
And so,
you know that I have a grandchild,
we established a savings account for her at a very young age and she now enjoys at three,
(09:52):
going in and making her own deposits.
Um And so she,
you know,
will waive her,
her receipt proudly when she puts her money in.
And so that kind of establishes that relationship at an early age so that when she gets to the point where she's earning her own money and,
and that sort of thing,
then it won't be intimidating for her when she gets older.
(10:13):
That's true.
And that's wonderful if you can do that for your family and,
and have that conversation and communicate about what you're doing and why and some of our own banked families may not have had that experience.
They may not have had somebody guide them through their first account experience.
So you can even have that as an adult,
but it's even better if you start young.
(10:35):
Exactly,
Kelly,
thank you so much for taking the time to share with us all of the benefits of opening and enjoying the benefit of banking and how it can make your money work for you as we've talked about in the past.
I'm glad to share.
Thanks for having me.
If you are just tuning in,
(10:55):
you are listening to Talking FACS and you can find us wherever you listen to your favorite podcast.
Thank you for listening to Talking FACS.
We deliver programs focusing on nutrition,
health,
resource management,
family development and civic engagement.
If you enjoyed today's podcast,
have a question or a show topic,
idea.
(11:15):
Leave a like and a comment on Facebook at UK F CS E X T or send us an email at UK F CS E X T at UK Y dot E D U.
Visit us online at F CS dot UK Y dot U to learn more about the University of Kentucky Family and Consumer Sciences Extension Program or contact your local extension agent for Family and Consumer Sciences.
(11:42):
We build strong families,
we build Kentucky.
It starts with us.
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