1. Depository Institution Discovery

2. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Depository Institution Business that offers and sells financial services to people Checking Accounts Checking Accounts Savings Tools Savings Tools Assist people with daily financial tasks

3. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Types of Depository Institutions Credit Union Savings and Loan Institution Commercial Bank

4. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Commercial Bank depository institution The most popular type of depository institution Lend, issue, borrow and protect customer’s money Offer a better way to track and manage money deposited withdrawn Provide records of money deposited, or put into an account, and money withdrawn, or taken out of an account

5. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Checking Account Very common type of account Offers safety and convenience Most do not pay interest, or additional money earned Frequent withdrawals and deposits are expected

6. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Withdrawing Money Checks Legal documents that function like cash If sufficient funds are not in the account, checks can “bounce” Fee Harm future opportunities for credit Debit Card Electronically connected to an account When purchases are made, money is automatically withdrawn from the designated account A PIN (Personal Identification Number) is required to confirm the user is authorized to access the account

7. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Check 21 Check Clearing for the 21 st Century Act Money is automatically withdrawn from an account as soon as a check is written Money is automatically withdrawn from an account as soon as a check is written Makes it difficult to “bounce checks” Makes it difficult to “bounce checks” An individual must have money in his/her account to make a purchase An individual must have money in his/her account to make a purchase

8. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Opening a Checking Account Read through the contract from the bank Complete a Signature Authorization Card Printed name Printed name Signature Signature Social Security number Social Security number Telephone number Telephone number Address Address Date of birth Date of birth Make an initial deposit

9. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Interest Earning Checking Account Checking account that pays a small amount of interest Checking account that pays a small amount of interest Usually require a minimum balance, which is the smallest amount of money that must be kept in the account in order to keep paying interest Usually require a minimum balance, which is the smallest amount of money that must be kept in the account in order to keep paying interest

10. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Savings Tools Savings Account Money Market Deposit Account Certificate of Deposit (CD)

11. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Savings Account Keeps money safe until the owner needs it Emergencies Emergencies Purchase expensive items Purchase expensive items Money can be deposited and withdrawn an unlimited number of times each month Money can be deposited and withdrawn an unlimited number of times each month No check writing privileges No check writing privileges A debit card may be used with certain accounts A debit card may be used with certain accounts Money has the opportunity to earn more interest than if it was in an interest earning checking account Money has the opportunity to earn more interest than if it was in an interest earning checking account

12. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Money Market Deposit Account Pays a higher interest rate than a regular savings account Pays a higher interest rate than a regular savings account Requires more money to open than a regular savings account Requires more money to open than a regular savings account Money can be withdrawn only a limited number of times each month with checks or a debit card Money can be withdrawn only a limited number of times each month with checks or a debit card

13. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Certificate of Deposit Pays interest on a lump sum of money Pays interest on a lump sum of money Once money is placed in a CD, it must remain there for a specific time period Once money is placed in a CD, it must remain there for a specific time period If withdrawn early, a penalty fee is charged If withdrawn early, a penalty fee is charged Interest rate is higher than a savings account and Money Market Deposit account Interest rate is higher than a savings account and Money Market Deposit account The rate of interest money earns in a CD increases as the length of time the money is required to stay in the CD increases The rate of interest money earns in a CD increases as the length of time the money is required to stay in the CD increases

14. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Commercial Banks Safety Storing large amounts of money in a commercial bank is safer than at home Fire, burglary, or other type of disaster Federal Deposit Insurance Corporation (FDIC) Protects up to $250,000.00 from loss in: Checking Accounts (including money market deposit accounts) Savings Accounts (including passbook accounts) Certificates of Deposit

15. 1.2.1.G1 © Take Charge Today – Revised April 2006– Depository Institution Discovery – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Quick Review Depository Institution Checking Account Savings Tools Savings Account Money Market Deposit Account Certificate of Deposit (CD) FDIC