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: Chase Bank

Institution B: Teacher’s Federal Credit Union

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.

Chase Bank Teacher’s Federal

Credit Union
Type of Fee Fee Amount Type of Fee Fee Amount
Monthly maintenance $12
fees
Opening deposit $25 Minimum balance $1
Overdraft $35 Monthly fee $0
Card replacement $5 Inactive fee $0
Foreign transactions 3% Card replacement $10
ATM (out of network) $3
Best Institution ________________________________________________________________________

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.

Chase Bank Teacher’s Federal

Credit Union
Type of Account Minimum Amount Type of Account Minimum Amount

Best Institution ________________________________________________________________________

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.

Chase Bank Teacher’s Federal

Credit Union
Name of Account Interest Name of Account Interest

Best Institution ________________________________________________________________________

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
Banking App
Paperless Statements
Best Institution ________________________________________________________________________

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
2-Year CD
5-Year CD
10-Year CD

Best Institution ________________________________________________________________________

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
Rate or Yield

Best Institution ________________________________________________________________________

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
Benefits

Best Institution ________________________________________________________________________

10. So which financial institution is better 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?

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.