Having its focus on home economics, TEB Family Academy House offers training courses on fundamental financial concepts that everyone needs to have a basic understanding such as appropriate use of credit cards, investment instruments, proper borrowing, savings, budget management, etc.

    The subject of our first training course is “Family Economy Management”. From the training calendar, you can learn the date of the training course in the TEB Branch nearest to you and participate to the training. Our training calendar is updated on a monthly basis and all our training courses are open to public.

    On 22nd August, Thursday, TEB Family Academy training will be given at our branches in all cities.

    Please click here for our online training courses.

    Family Economy Management

    With its unique income and expenses, you can basically consider a family like a company. First of all, you, as a Family, should identify your regular monthly income and basic expenditures as best you can. You should make an accurate calculation on how your expenditures change at times like back-to-school, holidays, etc., and if you have side income such as bonuses, holiday supplements, etc., you should know well when and how much they are. By this way, you can determine when to save money and when to borrow money within a year as well as how to pay off your debts with your income in a healthy manner.

    Besides, in creating your income and expense balance, you should also consider the future. To that end, investments you wish to make in future (purchasing a house, your child’s university education, etc.) or any income you may earn in future (land sale, promotion, etc.) should also be taken into account.

    I. Let's get acquainted with banking terms:

    Deposit: It is the money placed into banks and similar credit institutions as to be withdrawn either on demand or at the end of a fixed term or notice period. The accounts in which the deposits are followed are given certain names like “deposit accounts”, “current credit accounts”, “passbook savings”, etc. depending on their place or type. Deposit accounts have a crucial importance because they protect your money to lose value against inflation and add value to your savings. If you maintain your money at a bank, your cash flow will be easier, your invoice can be easily paid upon your single instruction and your credit card debt or your rent can be paid automatically; thereby you do not have to deal with such details in your intense daily life.
    Bank/Debit Card: It is the card which enables you to benefit from banking services, including the use of deposit accounts and special current accounts. A bank/debit card is almost the same as cash; it spends only the money in your account, not more than it, however it is safer than carrying cash because it can be encrypted. You can use your bank/debit card at ATMs and in your purchases. When you use your bank/debit card in your shopping transaction, the amount of your purchase will be automatically deducted from the balance of your current account.
    Credit Card: As a convenient alternative to cash, it is a payment instrument issued by the banks and certain finance institutions to their customers which can be used for payment purposes in shopping places with contracted POS machines without requiring any cash money or for cash advance withdrawal purposes in bank ATMs, where the expenditure amount is required to be paid to the bank either by single-payment or in installments. The distinguishing feature of the credit cards from the bank cards or cash is that, in addition to various campaigns they offer, the credit cards also provide installment opportunities; and this feature makes the purchase of especially high value goods very practical. On the other hand, the fallacy causing many credit card users to suffer is to assume the allocated credit card limit as existing cash thereby to spend it fecklessly or to find the installment pricing somehow cheaper and to assume just one installment to be paid.
    Credit: It is defined as a purchasing power that is made available or transferred to someone, where such power must be returned after a certain period of time. Contrary of what is generally believed; credit is not the money which is “not yours”, rather it is the money which is “yours”; the amount you expect to earn. Using a credit facility from the bank is a process that requires careful planning and these must be taken into consideration in determining the amount and payment conditions. Using a credit is not something to be afraid of; and in Turkey, approximately 13 million people are using various credit facilities.  
    Fund: Fund is a portfolio which is formed by the institutions authorized by the Capital Markets Board with the savings they collected from the investors as to include multiple equities, government bonds, foreign currency, precious metal or interest bearing valuable paper in a way to distribute risk. Investors, in general, receive a participation certificate against their investments in the fund. The types of funds may vary like interest funds, equity funds, hybrid funds and generation funds. It is an investment instrument which has large transaction volumes in the capital markets.

    Stock: One of the equivalent parts of the capital of a company. Those who purchase a stock of a company become one of the shareholders of that company. A stock represents the special relationship between the company and the stock holder.

    Bond: It is an interest bearing note issued by a state or a company which undertakes to repay total amount of principal plus interest at a specified date in future. The most important difference between a bond and a long-term credit facility is that the bond is priced based on default risk while the credit facilities are priced based on restructuring risk. If the bond debtor bankrupts, the bond customers shall have no settlement option; and this probability raises the costs.

    Government Bond: They are medium and long-term investment instruments that enable you to invest your money in debt securities issued by the Government either in Turkish Lira or in a Foreign Currency. You can sell these investment instruments and convert into cash at any time you want without waiting for the maturity date. Although their yield is relatively lower, they are safe and bear lower risk. Treasury Bills issued by the Treasury of the Republic of Turkey, on the other hand, are debt securities shorter than one year.

    Promissory Note: It is a financial instrument, a valuable commercial paper (bill of exchange) signed by its debtor and given to the creditor that contains a written promise to repay a definite sum of money at a specified future date. It is always drawn on a creditor; it cannot be made payable to bearer. Promissory notes facilitate the movement of funds in economy. A person who acts as a payee may not have enough cash however may also have a customer whom he should not delay or the customer may affect the payment later, and in such cases, promissory notes provide flexibility. These notes can be redeemed on their due dates on presentation, or they can be discounted at banks to raise cash before their maturity dates. If they are discounted at banks, both the bank and the payee shall benefit from such transaction, and the drawer shall have neither any gain nor any loss.

    IPS (Individual Pension System): It is a savings-based retirement system. In our country, pension salaries of many people, especially of those who live in big cities, are not at adequate levels. Unfortunately, many people erroneously assume that their salaries would always remain the same and they do not think about tomorrow. Even those people who think about tomorrow and wish to save money may postpone their intensions by saying “let’s wait until the payment of this installment then I will, let’s buy one more house then I will”. Individual Pension System is of great importance to prevent such postponements and make regular and disciplinary savings. 

     It is a rate of return earned on the sale of a debt agreement. We can simply refer to the interest as "the price of money”. Either in borrowing or in saving…
    Types of interest:

    Simple Interest: Simple interest is the interest added to the principal at the end of a certain period. The simple interest formula is as follows:
    Simple Interest = Principal x Interest Rate x Time.

    Compound Interest: It is the interest which demonstrates the return earned on the investment as a result of adding the interest accumulated throughout the investment period also to the investment in the new investment period. In other words, it is the interest earned on interest. For example, let’s assume that you get net 10% interest from our bank for your 1 month time deposit account. This rate is an annual rate; and your monthly earned interest income will be one-twelfth of this 10%. When the monthly earned interest income is added to the principal and reinvested with the same rate, the annual return will reached 10.47%. Thus, this rate shall refer to the annually compounded interest rate of 10% simple interest.

    Another important point about interest is that it is either paid net or gross. For example, interest rates for deposits are announced on a gross basis; that means, the net amount of deposit interest you will earn on the maturity date will be less than such gross rate. The reason of this difference is the withholding tax, another concept stepping in your lives.

    Withholding (Deduction at Source): Withholding can be defined as tax deducted at source from income. In terms of income tax, particularly for the payment of tax debts of salaried employees and wage earners, it means deducting tax before or at the time the income is received by its owner. As of today, the withholding tax rate for deposits is 15%. Besides, there is an additional fund deduction at the rate of 10% of the withholding amount. The withholding rates may vary according to the instrument that the government wants to encourage. For instance, this rate on individual pension system is currently 5%.

    Apart from the interest, another critical issue concerning the products you use is other commission and fees you pay. For example, when using a credit facility, you should take into consideration not only the interest but also other costs. In order to make a comparison, you should ask your banker to present the annual cost rates containing all commission and charges (all-inclusive rates). Sometimes you may prefer to use credits with higher annual cost rates because of their more flexible payment schedule for your budget and income-expense balance.

    When the financial product being offered to you has a higher return than the other, you must check whether your return is based on a variable annuity or a fixed annuity.

    Fixed Income: If you are not willing to take risk, fixed income is just for you. In fixed-income investments, there is no chance of your money losing its value; and, in the same vein, there is also not much chance of your money increasing in value. You basically know at the beginning how much interest your money will earn. Government bonds, time deposits are typical for such type of investments.

    Variable Income: Variable income is best for those who are willing to take risk. You may double your money, or your money may lose its value. Products such as foreign currency, stocks, gold, etc. are fall into this scope.

    Some instruments may provide higher return by the risk they bear. What is really important here is to understand the risk correctly. You should discuss with your banker about the length of necessary and accurate waiting period for that product and you should take the risk by learning it in detail. In such cases, forming a basket which comprises of both fixed and variable income instruments may be more meaningful.

    Basket: It means investing in a group of several instruments. It tries to maximize the profit whilst to minimize the loss. In other words, it may be considered as a way of insuring income. It is especially useful in cases when the forecasts are not much precise. For example, you can invest a portion of your money in government bonds, another portion of it in gold, and another portion of it in foreign currency. In this way, if one of them loses its value, the value of the other may increase and your potential loss will be minimized. Even if your gold and foreign currency investments lose their value, you can guarantee yourself with your investment in government bond.

    II. Key Points for Investment Products:

    For time deposits, the exact net amount of interest to be earned must be known, both gross and net interest rates must be learned, the interest income amount must be calculated and the term of deposit must be set properly.

    For other investment instruments, all risks associated with the instruments must be identified, if a basket is to be formed then the instruments included in the basket and their features must be examined, it must be possible to make a switch at the right time based on market developments, and the cash needs that may arise during the investment period of the product must be taken into account.

    For Individual Pension System, you should select a plan suitable for the money you wish to accumulate, get information about related deductions such as entrance fee, administrative expense fee, etc. in detail, benefit from its tax advantages, and you should work with a company which can provide information at the right time. 

    If you need money,

    For equal installment credits, you should share your needs and current financial position with your bank in an accurate manner, get the annual cost rates from your banker, ask the interest rate, other commission and charges, and you should take your side income like bonuses etc., if any, into consideration.

    Overdraft Account, it is a short-term investment instrument and best for anyone in need of money urgently. It accrues interest on a daily basis and you only pay the interest on the days you used the overdraft. When you use it, you should compare its rate with the interbank interest rates.

    III. Risks:

    The only product which you cannot purchase immediately when you need it is insurance. For this reason, you must get insurance consciously by taking all possibilities into consideration. In using this product, you must also carefully take its scope and coverage into account.
    You should also bear in mind that, among personal risk, you may also face with material risks. Accordingly, there are various insurance types that enable you to take precaution against risks such as earthquake, fire, flood, theft, terrorism, etc. You must ensure that the indemnity amounts in the products you will use are correctly determined and the relevant coverage amounts are properly placed.

    IV. To Save Time:
    Payments, you can give automatic payment instruction to your bank for almost all of your payments (rent, invoice, etc.). If you place your instruction on your credit card, you can also benefit from several campaigns. Even if you do not have available balance in your current account, you can also guarantee yourself against non-payment risk by using an overdraft facility.

    Alternative channels, you can get almost all services such as making an application, requesting products, accessing the documents and information you wish to receive, etc. through internet banking and call center. In comparison with transactions conducted over branch counters, conducting transactions through alternative distribution channels are faster and economical.


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