Financial Institution Frenzy

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Financial Institution Business that offers and sells financial services to people Checking Accounts Savings Tools Assist people with daily financial tasks

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 Financial Institutions Credit Union Savings and Loan Institution Commercial Bank

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 The most popular type of financial institution Lend, issue, borrow and protect customer’s money Offer a better way to track and manage money Provide records of money deposited, or put into an account, and money withdrawn, or taken out of an account

2.7.2.G1 Commercial bank Fees associated with banking: Overdraft fees ATM fees Monthly service fees Debit card fees Check fees © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 A Check 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

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 Makes it difficult to “bounce checks” An individual must have money in his/her account to make a purchase

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 Signature Social security number Telephone number Address Date of birth Make an initial deposit

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 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 An account at a financial institution that allows you to deposit money & withdraw money to pay bills many times a day

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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)

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 Purchase expensive items Money can be deposited and withdrawn an unlimited number of times each month No check writing privileges 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

2.7.2.G1 Savings Account A place to deposit money you don’t plan to spend right away! © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 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

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 Once money is placed in a CD, it must remain there for a specific time period If withdrawn early, a penalty fee is charged 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

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 money in bank accounts from loss Insures individuals up to $250,000

2.7.2.G1 © Family Economics & Financial Education – April 2006 – Get Ready To Take Charge of Your Finances – Financial Institution Frenzy 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 Financial Institution Checking Account Savings Tools Savings Account Money Market Deposit Account Certificate of Deposit (CD) FDIC