1.7.3.G1 Depository Institutions Take Charge of Your Finances

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Institutions Depository Institutions – businesses which offer multiple services in banking and finance  These institutions include: Banks Savings and Loans Credit Unions  They are regulated by the Federal Reserve or other state and federal agencies

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Depository Institutions Commercial Bank Credit Union Savings and Loan Association

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Primary Characteristics  Usually the largest depository institutions  Considered full-service depository institutions Checking & savings accounts, loans, credit cards, trusts, safety deposits, foreign exchange, investments and/or financial counseling  Available to a variety of consumers (personal & business) Examples  Local or regional banks~Pulaski, Eagle or FCB  National banks~Wells Fargo, US Bank, Chase Bank (offer banking and investment service)

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Commercial Banks Advantages Convenience  Multiple locations locally and/or nationally  Wide variety of services to meet individual needs Updated on current banking trends (mobile /online banking) FDIC insured up to $250,000  Federal Government Agency that insures commercial banks and savings & loans against loss Disadvantages For Profit  Interest rates on interest-bearing accounts may be lower than credit unions  Interest rates on loans may be higher than credit unions Fees associated with services may be higher than other institutions

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Credit Union Primary Characteristics  Non-profit cooperative depository institution  Owned by members who share a common bond live in same community, work, religious based Examples – First Community, Anheuser- Busch Credit Union, Christian Community

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Credit Union Advantages Interest rates on interest-bearing accounts may be higher than commercial banks Interest rates on loans may be lower than commercial banks Common affiliation may provide personalization NCUA insured up to $250,000  Insurance protection through the National Credit Union Association Disadvantages Fewer locations Fewer services provided Slower to stay updated on trends in banking

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Savings and Loan Association (S&Ls) Primary Characteristics  It is generally a locally owned and privately managed home financing institution.  It receives individuals' savings and uses these funds to make long- term loans to home purchasers.  It makes loans for the construction, purchase, repair, or refinancing of houses.  It is state or federally chartered. Examples – American Federal Savings Bank, Ozarks Federal Savings

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Savings & Loan Associations Advantages Focus on mortgage lending and have experts to assist in the process Interest rates on interest-bearing accounts may be higher than commercial banks Interest rates on loans may be lower than commercial banks FDIC insured up to $250,000  Federal Government Agency that insures commercial banks and savings & loans against loss Disadvantages Fewer locations Fewer services provided May not meet all your banking needs

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Brokerage Firms Primary Characteristics  Business whose main responsibility is to accept trades between buyers and sellers of stocks, bonds, mutual funds and other investments.  Brokerage companies are paid commission after the transaction has been successfully completed.  May provide investment advice for wealth planning such as college funds, retirement savings and estate planning Examples – Edwards Jones, Wachovia, Morgan Stanley

1.7.3.G1 © Family Economics & Financial Education – Revised May 2010 – Depository Institutions Unit – Depository Institutions – 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 Brokerage Firms Advantages Receive advice on growing wealth Buys and sells investment options Experts educated in wealth planning and investing Disadvantages Not FDIC insured Pay for service or advice Provides fewer banking services