Bank Accounts Consumer Math

Where do I keep my money?

Choosing a Financial Institution Banks are owned by investors and are for-profit businesses credit unions are not-for-profit and member- owned thrift banks specialize in home loans and serving small businesses within the community

Types of Financial Institutions Banks Credit Unions Thrift Banks Audio - Financial Institutions

Types of Financial Institutions Banks For-profit institution Makes loans, pays checks, accepts deposits and offers other banking services Insured by the FDIC Credit Unions Not-for-profit institution Owned by its members Offers personal loans and other banking services Insured by the National Credit Union Administration (NCUA) Thrift Banks A savings bank, credit union or savings and loan association 2. Similar to a bank Main business is home loans

Comparing Accounts Tech-savvy services (e.g., online banking, text message banking, etc.) Other services (e.g., overdraft protection) Minimum opening deposit Monthly maintenance fees Overdraft fees ATM fees Penalties and withdrawal limits

Bank Fees Monthly Maintenance Minimum Balance Overdraft ATM Fees Returned Deposit Paper Statements

Bank Benefits Checking accounts Interest on savings Direct Deposit Online Banking Mobile Banking

Bank Accounts - Types Savings accounts Basic Checking Accounts Interest-bearing Checking Accounts Money Market Deposit Accounts (MMDAs) Certificates of Deposits (CDs)

Bank Accounts - Types Savings Accounts Can make deposits and withdrawals Higher interest rate than checking account Lower than a money market or CD Some banks may charge a fee if your balance falls below a specified amount

Bank Accounts Savings Accounts Basic Checking Accounts Able to use checks Usually do not pay interest May restrict or impose fees for excessive activity

Bank Accounts Savings Accounts Basic Checking Accounts Interest-bearing Checking Account Able to write an unlimited number of checks May also be called negotiable order of withdrawal (NOW) accounts Charge a monthly service fee if balance falls below a preset level

Bank Accounts Savings Accounts Basic Checking Accounts Interest-bearing Checking Account Money Market Deposit Accounts (MMDAs) Invest your balance in short-term debt such as commercial paper, treasury bills, or CDs Higher interest than savings account Require a higher minimum balance Limited number of transfers Specified Returns and losses

Bank Accounts Savings Accounts Basic Checking Accounts Interest-bearing Checking Account Money Market Deposit Accounts (MMDAs) Certificates of Deposit (CDs) “Time Deposits” – agreed to keep the money in the account for a specified amount of time Inaccessible funds (Penalty for withdrawal) Higher interest rates with longer durations

References http://www.investorguide.com/article/11655/ty pes-of-accounts-typically-offered-by-banks-igu/