1. Foundations of Personal Finance Ch. 8

2. Foundations of Personal Finance Ch. 8
Financial Institutions
and Services 2

3. Chapter Objectives Identify different ______of financial institutions.
_______the financial services that will best meet your needs.
Use ______and debit cards responsibly.
_________a personal checking account.
Write and __________checks correctly.
___________a checkbook balance.

4. Types of Financial Institutions
Economic ______cannot function without financial institutions
They are financial ____-_______ that keep money flowing throughout the economy among consumers, businesses, and government

5. Foundations of Personal Finance Ch. 8
Commercial Banks
___________banks offer a wide variety of services
continued

6. Foundations of Personal Finance Ch. 8
Commercial Banks
____________________________________(FDIC) maintains confidence in the banking system by
_______bank customers’ deposits
_______and ________financial institution policies and operations

7. Savings and Loan Associations
____________________________(S&L) offer many of the same services of commercial banks
_____S&L ______:
________savings and loan associations

8. Credit Unions
_____________memberships available through employers, unions, religious organizations, community organizations, or other groups
______operating ______ (no federal income taxes required) allow them to ____ _______ _______ rates on savings and charge _____ ______ on loans
continued

9. Credit Unions Either federally or state___________
__________________________________(NCUA)
_________federal _________
__________credit __________ across the country
_________deposits

10. Foundations of Personal Finance Ch. 8
In Your Opinion
Would you prefer to use a credit union if you had access to one? Why or why not?

11. Mutual Savings Banks Mutual savings banks exist in only ____states
_______ _______ among depositors as dividends
Offer a wide variety of services
Receive and pay dividends on deposits
Make home mortgage and improvement loans

12. Choosing a Financial Institution
Foundations of Personal Finance Ch. 8
Choosing a Financial Institution
What ________ does the institution provide?
What ______are charged?
Is the staff helpful?

13. Safety Look for signs that say
“Insured by the________”
This means the institution is regularly _________and passes ongoing examinations

14. _______of Financial Institutions
Electronic funds transfer (_____) makes transactions quickly and conveniently
Automated teller machine (____) lets you access your account to ______cash, make__________, perform other services
To use an ATM you need
an ATM_______
a personal identification number (_____)

15. Direct Deposits or Withdrawals
Foundations of Personal Finance Ch. 8
Direct Deposits or Withdrawals
Checks and payments are
_________ _________into an account
Bills can be paid _______writing and mailing _______
Money can be _________
__________ from checking to savings

16. Point-of-Sale Transfers (_____)
Moves money ______your _______to pay for a purchase without using______,______, or__________
A merchant scans a ______card and purchase ______immediately ________ ______ customer’s to merchant’s ______account

17. Online Banking Services
Online access to accounts using _________number and security______
You can
_____account____________
_________account history
________electronic bill__________
_________deposits, withdrawals, and transfers
Personal financial ________often available

18. Foundations of Personal Finance Ch. 8
Overdraft Protection
_______—the act of withdrawing money or writing a check for an amount ______than an _______ ___________
Financial institutions offer overdraft protection
Banks _____ ____ for each overdraft

19. _____ _______
A financial institution will _______to ______a ______ written by a customer
A ____is usually________
Customers _______request this service

20. _____-___ and _____-__ Services
Foundations of Personal Finance Ch. 8
_____-___ and _____-__ Services
Customers make deposits and withdrawals by
_____
drive-up____________

21. Foundations of Personal Finance Ch. 8
_____-_______ Boxes
Customers’ important documents and valuables are stored in a secure______
An ______ ____ is usually charged

22. Other Special Programs
______ preparation ___________
____reporting____________
________ ____________
_______ ________ _______
__________ _______

23. Personal ______Accounts
_______of checking accounts:
_____place to keep money
____way to _____goods and services
____way to ___ _____
Provides ________of deposits and receipts
Aids in _______ ______________
Helps ______sound ______ ________

24. Accounts and Services
Look for financial institutions that offer the accounts and services you want in a checking account
Ask about availability of different features and their fees, if any

25. Restrictions and Penalties
Foundations of Personal Finance Ch. 8
Restrictions and Penalties
__________ ______requirements
Withdrawal
______________
________penalties
____ _________on credit penalties

26. Fees and Charges __________ fees ______for _____use
____-__________ penalties
_____ -_________ fees
_______-__________ costs

27. Interest Rates Interest rates
paid on ________-________ checking accounts
charged to _______ _________charged to use a bank credit card
_____for ____ _______ on _______and ____ ________ for using _________

28. Convenience Convenient_______
______in various and convenient ____________
______banking availability
_______ _______offered

29. Checking Account______
Foundations of Personal Finance Ch. 8
Checking Account______
______checking accounts are good for people who write _____ ______ and can keep the _________balance
continued

30. Checking Account Types
_________savings and checking account
Also called _____ _______ or ______accounts (Negotiable Orders of Withdrawal)
___________account:
An option for ____-_________ customers (low min. dep., min. bal., low monthly fee, limit on # of checks written)

31. Opening a Checking Account
_____a signature______
Those _____ ___usually need a _____ _______with a______; spouses often share joint accounts
______all ____ ______ and _______ _____ that you use
Keep ______of transactions with a ________

32. Managing the Cards Linked to Your Account
______of _____and ______cards:
_______need to carry lots of_____
________to your ______at any_______
Access to your money almost________
Access to goods and services of businesses that ___ ____ _____ ________
continued

33. Managing the Cards Linked to Your Account
_____all __________
_______ _______ and _____in checkbook register
__________ your card and PIN
______ _____ ______ and don’t overdraw your account

34. Foundations of Personal Finance Ch. 8
ATM Cards
Use ATMs _______with your bank’s________
Usually ___ ____ charged
Other ATMs charge fees, which can add up

35. Debit Cards Used at _____and ________that accept credit cards
_______to writing a______; the purchase ______ ______ directly ____your ________ account

36. Making Deposits Deposits can be made _____out a deposit_____
By________
at an____
_____out a deposit_____
______ _______ and ______ _______in your register

37. Foundations of Personal Finance Ch. 8
_________Checks
______you _____or _______a ______made out in your name, you must endorse it
continued

38. Endorsing Checks _______ways to endorse a check:
_______endorsement–just the payee signs
( use at time and place of deposit or cashing)
_________endorsement–the specific use is noted, such as “____ ________ _____”
(Used when banking by mail or ATM)
_________endorsement–the payee writes “pay to the order of…” and signs, and the ____ _____ also ________

39. Writing Checks Use ____ _____
In case of_____, ______check and write a new one
Fill in the
______
________name
check amount in ______and_______
Your___________
continued

40. Writing Checks Filling out checkbook _________
Record check_____, _____,_______, and_________
_______ check amount ____ __________
______ _______ _____ and_______
____ _______ amount to_______
For destroyed checks, write number and “_______”

41. Balancing Your Checkbook
Foundations of Personal Finance Ch. 8
Balancing Your Checkbook
Bank statements are sent out_________
Always check the statements against your records
continued

42. Balancing Your Checkbook
Bank statement contents include
beginning and ending___________
Total ______of ______and________
total amount of _______and_________
_______of checks paid (dates, numbers, amounts) and canceled checks or check photocopies
other items paid (withdrawals, fees, bills)
deposits and credits (dates, descriptions, amounts)
continued

43. Balancing Your Checkbook
1. _______canceled _______with those recorded in checkbook register
2. ______ _______in register with those on statement and your receipts
3. _____ _____ transactions and _____in register against those on statement
continued

44. Balancing Your Checkbook
4. _______ service ______on statement from register balance
5. Account for checks, ATM transactions, and deposits not yet on statement
6. If numbers from Step 5 and bank statement ______are ___ _____, check math or _____the _____for help

45. In Your Opinion
Why might you want to balance your checkbook more often if you make debit purchases or bank online?

46. Foundations of Personal Finance Ch. 8
Special-Use Checks
Most financial institutions offer these, usually for a fee
________ checks (A bank ck. That guarantees payment)
_______checks (personal ck. – bank guarantees payment)
______orders (Order for specific amt. to be paid to a payee)
traveler’s checks (If lost – replaced. Sign only when cashing)

47. Central Ideas of the Chapter
Financial institutions are vital to the economy because they make financial transactions possible.
A checking account is a basic tool to help you manage your financial resources.

48. Glossary of Key Terms
Back
ATM card. A card that allows customers to withdraw cash from and make deposits to their accounts using an ATM.
automated teller machine (ATM). A computer terminal used to transact business with a financial institution.
bank statement. A record of checks, deposits, and charges on a checking account.

49. Glossary of Key Terms
Back
cashier’s check. A check drawn by a bank on its own funds and signed by an authorized officer of the bank.
certified check. A personal check with a bank’s guarantee the check will be paid.
commercial bank. A bank owned by stockholders and organized to receive, transfer, and lend money to individuals, businesses, and governments.

50. Glossary of Key Terms
Back
credit union. A nonprofit financial cooperative owned by and operated for the benefit of its members. It accepts deposits, makes loans, and provides other services.
electronic funds transfer (EFT). The movement of money electronically from one financial institution to another.
endorse. To sign one’s name on the back of a check in order to cash or deposit the check.

51. Glossary of Key Terms
Back
Federal Deposit Insurance Corporation (FDIC). A U.S. government agency that protects bank customers by insuring deposits as well as examining and supervising financial institutions.
money order. An order for a specific amount of money payable to a specific payee.

52. Glossary of Key Terms
Back
mutual savings bank. A saving depository owned by the depositors that divides the profits among depositors in the form of dividends.
National Credit Union Administration (NCUA). An agency that grants federal charters to qualified groups, supervises credit unions, and insures accounts in all federally chartered and many state chartered credit unions.

53. Glossary of Key Terms
Back
savings and loan association (S&L). A for-profit financial institution that receives and pays dividends on depositors’ savings, makes mortgage loans, and offers most of the services commercial banks offer.
traveler’s checks. Checks that can be cashed in most places around the world. They are often used by people who travel and do not want to carry large amounts of cash.