Banking 101

Checking Accounts

If you need a safe place to keep your money – and still have easy access to it – a personal checking account is an ideal choice.

Other good reasons to open your own checking account:

• It helps you keep track of how much money you have, and how much you spend.
• It also helps you budget your money.
• Your deposits with Northwoods Bank of MN are insured based on ownership up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).

To open a checking account

There’s a Northwoods Bank checking account that’s just right for you. To learn more, and to open an account:

• Visit a local branch of Northwoods Bank.
• Call 1-800-450-2265 (bank).

Your account balance – and accessing your money

When you open your account, you’ll receive an account register with a new set of starter checks. The account register is a small book you will receive with your checks. Use it to keep track of your account balance by writing down every transaction (deposit or withdrawal) you make. After each transaction calculate your new balance. When you put money into your account you are making a deposit. You can make deposits at any Northwoods Bank branch, by telephone transfer from another Northwoods account, online banking transfer, or automatic direct deposit, which is an electronic transfer to your account for payments such as paychecks, social security and other benefits.

Note: When you deposit a check, those funds may not be available to you for a few days. When the funds will be available is determined by the routing number on the check deposited. The Funds Availability Policy describes when the funds will be available to you.

A checking account withdrawal is any time you take money out of your account.

You can take out money by:

• Writing a check.
• Using a Northwoods Bank ATM or debit card at any Northwoods Bank ATM or wherever Visa transactions are accepted.
• Authorizing payments for regular monthly bills, or automatic withdrawal to be taken out of your account through an automatic clearing house (ACH) transaction. For example, you may contact a utility company to set up a regular payment.
• Using Northwood’s online bill pay service.
• Requesting money from your account at any Northwoods branch.
• Transferring money out of your checking account and into another Northwoods account at a Northwoods branch.

Maintaining your account register

Tracking your account balance

Your account register is the best, most up-to-date place to keep track of your account balance.
Provided you keep it current and up-to-date, it shows every transaction, whether or not those transactions have been processed by the bank. You can also check your current account balance by:

• Visiting any Northwoods branch.
• Using your Northwoods ATM/debit card at any Northwoods ATM.
• Enrolling in Online Banking.
• Calling 1-800-450-2265 or your local branch.

For deposits, record on your account register:

• The date
• A brief description of the deposit
• The amount of the deposit
• Add the deposit amount to your account balance
• Provided your register is up-to-date, the new balance is the amount in your account after all items logged in your register have posted to your account at the bank.

For withdrawals, record on your account register:

• If it’s a check, the check number
• The date
• The name of the person or company you paid, plus a brief description of what you paid for
• The amount of the withdrawal
• Subtract the withdrawal from your account balance
• Provided your register is up-to-date, the new balance is the amount in your account after all items logged in your register have posted to your account at the bank.
• If it is a debit card or ATM card purchase or any other type of withdrawal, follow the same steps.

Your checking account statement

Every month you’ll receive an account statement from Northwoods Bank in the mail or an e-statement (enroll here) through your online banking account. This monthly statement lists all your transactions (deposits and withdrawals) that have posted to your account during the statement period, and tracks your balance throughout the month. It lists:

• Beginning balance
• Dates and amounts of transactions
• Check numbers and check amounts
• Purchases made with your ATM or debit card at a merchant
• ATM withdrawals and deposits
• Bill payments, automatic withdrawals/payments or transfers
• Ending balance
• Use it to keep track of checks that have cleared

How to write a check

When you write a check, it needs to include the following information:

• The date
• Payee: The name of the person or company you are paying
• The amount of the check in numbers
• The amount of the check spelled out in words
• A note about what you’re paying for in the memo section in the bottom left corner
• Your signature

Overdrafts, or “bounced checks,” and overdraft protection

When you make a withdrawal that’s greater than the available balance in your account, your account is overdrawn. A check written for more than your available balance may either be paid by the bank and thus overdraw your account, or be “bounced” due to non-sufficient funds (NSF). Instead of paying the amount of the check, the bank returns (bounces) the check back to the person or company to whom it was written. In either case, banks charge a fee for overdrawing the account or bouncing a check. Northwoods Bank offers Ready Reserve Credit overdraft protection to help avoid these situations. Without Ready Reserve Credit, overdraft or NSF charges may be assessed – as well as potential merchant fees, late-payment fees, and damage to your credit.

For those who qualify, a Ready Reserve line-of-credit is established and linked to your checking account to avoid overdrafts and bounced checks. The funds that are needed to cover the transaction are taken from the line-of-credit and transferred to your checking account. Interest is charged only on the amount that is used until it is paid back. The annual fee for this service is low when compared to the expenses and embarrassment that it could save from overdrawing your account or bouncing a check.

Online Banking

Your computer and the Internet provide a convenient, easy, safe and secure way to access your money and track your transactions.

Northwoods Bank’s Online Banking service allows you to:

• Review accounts and transactions online
• Check account balances
• View check images
• Receive email alerts when select activity occurs on your account
• Transfer funds between your Northwoods accounts and accounts at other banks
• Pay bills using Northwoods Bill Pay
• Reorder checks and statement copies
• Receive your statement online
• Place stop payments

College students and their parents find the online tools especially useful. When parents are joint owners on a student account, parents can transfer money from their account to the student’s account.

Click here to enroll in Northwoods Online Banking

Northwoods Bill Pay

Save time by paying your bills online with the click of a button. Pay anyone in the U.S. that you would normally pay by check – from your utility bills, or mortgage, to the newspaper delivery person anytime, at your convenience. Recurring bills can be set up to automatically be paid on a monthly or quarterly basis.

Debit Cards, ATM Cards, and Credit Card ATM transactions

Northwood’s debit cards and ATM cards provide access to Northwoods Bank’s automated teller machines, and the Visa ATM networks, to allow you to withdraw or transfer money to or from your account.  Shortly after you receive your card, you will receive a separate letter with a Personal Identification Number (PIN). Your PIN is a secret code that, along with your card, gives you access to your accounts.

To use your card at an ATM:

• Insert the card into the slot or swipe the card.
• Enter your PIN on the machine’s number pad.
• Follow the instructions on the screen to choose the transaction you need, such as a withdrawal or check your account balance
• When you’re finished, remember to take your card, if applicable, and your receipt.
• Keep your receipt, and write down the transaction in your account register. Remember, ATM and debit card transactions post to your checking account. You can use your debit card or ATM card at any ATM that displays any of the logos printed on the back of your card. If you use an ATM that’s not a Northwoods ATM, both the operator of the ATM and Northwoods may charge you a fee. The fees charged by the other non-Northwoods ATM operator, will be added to the withdrawal, and will appear on your ATM receipt at the time of the transaction and will appear later on your statement. If there are any ATM fees charged by Northwoods, they will be reflected on your statement.

Be safe.

• Memorize your PIN, and don’t keep it with your card.
• If you choose your own PIN, make it a random number, not an obvious number like your birthday.
• Always remember to take your card and receipt with you when you finish a transaction.
• You can change your PIN number at an ATM to keep your number safe.

Be smart.

• Remember, your debit card or ATM card takes money straight out of your checking account immediately.
• If you don’t have enough money to cover your withdrawal, your transaction may be denied, or if completed, you may be charged a fee.
• Keep your receipts, and write down each transaction in your account register.

Debit card purchases

You can use your Northwoods Bank Debit Card at millions of locations worldwide. This includes online businesses and many businesses that do not accept checks.
A debit card is linked to your checking account, and the amount you spend will be deducted from your account almost immediately.
Just follow these steps:

• Swipe the card through the terminal.
• You can either sign the receipt or enter your PIN for the purchase.
• Be sure to take your card and receipt.
• Write down the transaction in your account register and keep your receipt.

Building a Solid Credit History

Banks make loans and give credit cards to customers based on the bank’s faith in the customer’s ability to repay those debts. Your credit rating is your personal history with money and your reputation for financial responsibility. By opening a checking or savings account and managing it wisely, you begin to build a good credit rating. A good credit rating is important to your future if you ever plan to buy a home, car or pay for tuition with a bank loan.
To start building a good credit rating:

• Pay your bills on time. Any late payment can hurt. If you fail to pay a bill, or if you miss a payment, the person or company to whom you owe the payment may report the failure to a credit bureau; and this report could harm your credit rating.
• Beware of bad debt. Be sure you can repay any money you borrow – especially with credit cards. It can be easy to fall behind on your payments and hurt your credit rating when you begin to accumulate large debts.

Your credit report

Your credit report is an accumulation of information about how you pay your bills and loans, how much credit you have available and what your monthly debts are. This and other types of information help a potential lender decide whether you are a good or bad credit risk. The report itself does not say whether you are a good or bad credit risk; it simply provides lenders with the data to make the decision themselves. Credit bureaus, also known as credit reporting agencies (CRAs), collect this information from merchants, lenders, landlords, etc., and then sell the report to lenders. A credit bureau is a clearinghouse for credit information about consumers. There are over 1,000 local and regional credit bureaus around the country that gather information about your credit habits directly from your creditors. Typically, these smaller local and regional bureaus are affiliated with one of three large national credit bureaus – Equifax, Experian and TransUnion.

Obtaining your credit report

Under the Fair and Accurate Credit Transactions Act (FACT Act) you can request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. You can (and should) request copies of your report from the three major credit bureaus regularly to correct any inaccuracies. AnnualCreditReport.com is a centralized service and the official site to help consumers request and obtain free annual credit reports. It was created by the three nationwide consumer credit reporting companies, Equifax, Experian and TransUnion. AnnualCreditReport.com allows you to request a free credit report online, once every 12 months from each of these three companies.  AnnualCreditReport.com offers consumers a fast and convenient way to request, view and print their credit reports in a secure internet environment. You can receive a report immediately by using this secure website. You may also request your credit report by phone by calling 1-877-322-8228. You will go through a simple verification process over the phone and your reports will be mailed to you. Or you may request your credit report by mail by filling out a request form, available online, and mailing it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

When you request a free annual credit report by phone or mail, it is mailed within 15 days.
Please note that, as a security precaution, you should never provide your personal information to any other company or person in connection with requesting free annual credit reports under the FACT Act. AnnualCreditReport.com does not approach consumers via email, telemarketing or direct mail solicitations.

Credit Score

A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service –– specifically, the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents. You can purchase a credit score by contacting one of the nationwide consumer credit reporting companies – Equifax, Experian, TransUnion. You can also purchase a credit score when you request your free annual credit report through AnnualCreditReport.com website.

Equifax: 1-800-525-6285; www.equifax.com
P.O. Box 740256
Atlanta, Georgia 30374

Experian: 1-888-397-3742; www.experian.com/fraud
P.O. Box 9532
Allen, Texas 75013

TransUnion: 1-800-680-7289; www.transunion.com
P.O. Box 6790
Fullerton, CA 92834

Identity Theft

You have the right to ask that nationwide consumer credit reporting companies place "fraud alerts" in your file to let potential creditors and others know that you may be a victim of identity theft. A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you. On the other hand, it also may delay your ability to obtain credit. You may place a fraud alert in your file by calling just one of the three nationwide consumer credit reporting companies. As soon as that agency processes your fraud alert, it will notify the other two, who then also must place fraud alerts in your file. An initial fraud alert stays in your file for at least 90 days. An extended alert stays in your file for seven years. To place either of these alerts, a consumer credit reporting company will require you to provide appropriate proof of your identity, which may include your Social Security number. If you ask for an extended alert, you will have to provide an identity theft report. An identity theft report includes a copy of a report you have filed with a federal, state, or local law enforcement agency. For more detailed information about the identity theft report, visit www.consumer.gov/idtheft.

ID SMART Identity Protection

Your Identity Has Just Been Stolen.

Now What?

ID SMART Identity Protection

Protection what's most valuable. YOU!

With Northwoods Bank's ID SMART Identity Protection, you receive the following:

Private Investigator

In the event that your IDENTITY is compromised, you will be assigned your very own Professional Private Investigator who will:

• Work on your behalf until ALL verifiable identity theft issues have been resolved.
• Assist in obtaining a police report, setting up fraud alerts & filing necessary credit bureau reports.
• Implement a detailed restoration plan that will save you time and make the process less stressful.

Trusted Resources

By enrolling in Northwoods Bank's ID SMART program, you have toll-free access to live Identity Consultant who will

• Provide you with best practices for managing your personal identity information and interacting online.
• Recommend the best course of action if you receive suspicious mail, email or phone calls.

Protecting the identities of you and your family = Priceless

Smart Saving

A savings account can keep your money safe while it works for you by earning interest.

• Your deposits with Northwoods are insured based upon ownership up to $250,000 by the FDIC.
• Your savings account earns interest, so it grows over time.
• Saving is important because it enables you to have extra cash on hand for emergencies.
• A savings account also builds your money for long-term expenses like school tuition, buying a home, vacations, and even retirement.

Installment Loans

Installment loans are designed for a specific purpose such as the purchase of a personal computer.
They provide security and convenience of fixed monthly payments over a specified amount of time called a term.

Auto Loans

Auto loans are also available for the purchase of a new or used car.
Online Consumer Loan Application

Consumer Loan Application (Printable PDF)

Auto Loan Affordability Calculator

 

Glossary

Account balance
The total amount of money you currently have in your bank account.

Account number
The identification number used by the bank for your bank account.  Each account has its own number – one for checking, one for savings, etc.

Account statement (Bank statement)
Periodically (usually monthly or quarterly depending on the type of account), your bank mails you a statement that lists a record of all the transactions in your account for the past period. You can also sign up to receive your statement online through Online Banking.

Annual percentage rate (APR)
In loans, the true cost of borrowing money, expressed as a yearly percentage rate. APR takes into consideration the interest rate plus certain other loan fees.

Annual percentage yield (APY)
A percentage rate reflecting the total amount of interest paid on a deposit account, based on the interest rate and the compounding frequency for a 365 day period.

Automated teller machine (ATM)
Also called a “cash machine”.  A machine where you can use your ATM/debit card and personal identification number (PIN) to access the accounts linked to your card to make deposits, withdrawals, transfers, and to check your account balance.

ATM card
A card issued by your financial institution. It is used to complete financial transactions through ATMs and merchants featuring the network logos on the back of your card (not necessarily your bank’s machines).

Automatic deposit
The electronic transfer of funds directly into your account.

Available balance
The balance in your account, less any amount on hold or not yet fully collected.

Balance your checkbook
Comparing your bank statement with your account register to make sure you have the correct account balance and that you are keeping track of all transactions for your account.

Bank Statement
A record of all transactions and debit/credit entries in the form of cash, check or transfer.

Cash advance
With a credit card, you may borrow money up to a specific limit. You may get a cash advance at a bank or an ATM. Some credit cards charge higher interest rates on cash advances than on purchases, and some begin charging interest immediately.

Cashier’s Check
An official check issues by a bank. Cashier’s checks are usually treated like cash since most banks clear them instantly.

Check
A negotiable instrument instructing a financial institution to pay a specific amount of currency from an account.

CIP (Customer Identification Program)
Federal banking regulations require all financial institutions to obtain, verify and record the identity of their account holders.

Credit bureau
Also known as credit reporting agencies (CRAs). Local and national clearinghouses that gather information on the credit individuals have and how they manage it.

Credit card
A card issued by a financial institution that allows you to borrow money, up to an approved amount, for purchases and cash advances.

Credit limit
The total amount of money you are approved to use on your credit card or a personal line of credit.

Credit rating/Credit score
A record of your financial reputation or history with money. Your credit rating is used by lenders to evaluate your ability to repay a loan or use a credit card. A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan, or service.

Debit card
A card issued by your financial institution used to make purchases or cash withdrawals at merchants and ATMs anywhere the logos on the back of the card are displayed.

Debit transaction
The use of an ATM/debit card to buy something at a store, restaurant, gas station, etc. The money for these transactions comes directly out of your checking account.

Delinquent/delinquency
Failure to make a payment by the due date.

Deposit
Putting money into your account.

Direct deposit
A pre-authorized payment such as a paycheck automatically deposited to
your checking account.

Extended Fraud Alert
A fraud alert entry made by a consumer reporting agency to the consumer's credit report at the request of the consumer, or an appropriate representative of the consumer. The consumer reporting agency must provide the fraud alert message along with any credit score generated in using the consumer's credit file for a period of seven years from the date of the fraud alert request. In the first five years starting from the date of the request, credit reporting agencies must exclude the consumer from any lists prepared for any third party to offer credit or insurance to the consumer.

FDIC Insurance (basic coverage)
The basic amount of insurance coverage provided to depositors of an insured bank is $250,000 based on ownership capacity. FDIC insurance covers the balance of each depositor’s account, dollar-for-dollar, including principal and any accrued interest through the date of the bank’s closing, up to the insurance limit. The $250,000 limit applies to all depositors of an insured bank except for owners of “self-directed” retirement accounts, which are insured up to $250,000 per owner, per insured bank.

Initial Fraud Alert
A fraud alert entry made by a consumer reporting agency to the consumer's credit report at the request of the consumer, or an appropriate representative of the consumer. The consumer reporting agency must provide the fraud alert message along with any credit score generated in using the consumer's credit file for a period of not less than 90 days from the date of the fraud alert request.

Installment
A specific amount of money paid over a specific time on a loan; e.g., a monthly installment of $150.00 per month for a 5-year car loan.

Interest
Interest earned is the money a bank pays you for letting it keep your money.
Interest paid is the money you pay a bank for borrowing its money.

Interest rate on credit accounts
The rate that a bank or credit issuer charges for the money it lends you. It is good to look for a low interest rate when borrowing money.

Interest rate on deposit accounts
Annual rate of interest paid on an account which does not reflect compounding. It is good to look for a high interest rate to make the best return.

Insufficient Funds
Account status when the account holder’s available balance is lower than an amount being debited against the account.

Minimum balance
The least amount of money you are required to keep in a deposit (checking or savings) account.
With some accounts, you need to keep a certain amount of money on deposit, or you will be charged a monthly fee.

Minimum payment
The least amount of money you must pay each month on your credit card or loan.

Online Banking
A service that allows you to access account information through a secure Web site.

Outstanding balance
The total amount you owe. A monthly bill or credit card statement shows an outstanding balance for what you still owe.

Overdraft charge
A fee charged by a bank for each item that overdraws your account, or that would overdraw your account if paid. Sometimes called an “overdraft fee,” “insufficient funds fee”, “not-sufficient-funds fee” or “returned check charge.”

Overdraft protection
When your checking account is overdrawn, the bank will use funds from the overdraft protection option you’ve chosen to cover your overdrawn expenses up to your available credit limit.

Overdrawn
Your account is called overdrawn when you spend more money than you have available in the account.

Personal Identification Number (PIN)
A code used by the account holder to authorize a transaction or obtain information regarding his or her account.

Personalized checks
The checks you order with your checking account. They have your name, address and checking account number printed on them.

Transaction
Any banking you do. Transactions include deposits, withdrawals, check, debit card or credit card purchases, payments, bank fees, interest, transfers, etc.

Transfer
Moving your money between your accounts. For example, you might transfer money from your checking account to your savings account. You can make transfers at a branch, at an ATM, online, or by telephone.

 

* All credit products are subject to credit approval.

Northwoods Bank of MN is a Member FDIC