Banking and Financial Services

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Categories of Banking Services  * May vary from bank to bank, but these are common services offered  Retail, also referred to as “Personal”  Corporate, business, or commercial  Investment  Wealth Management Copyright © Texas Education Agency, All rights reserved. 3

Banking Services - Retail PersonalCheckingSavingsLending Other Services Banking Service Options Copyright © Texas Education Agency, All rights reserved. 4

Checking Accounts  Types: Free checking ○ Maintain a low or zero minimum balance ○ Student accounts Money market ○ Interest earned on an average balance ○ Limited withdrawal or checking privileges Express ○ If you prefer online banking or ATMs ○ May be a fee to use the drive-through Lifeline-used mainly by lower-income customers Copyright © Texas Education Agency, All rights reserved. 5

Checking Accounts (continued)  Fees ○ Overdraft ○ Monthly maintenance  Debit cards  Check ordering Copyright © Texas Education Agency, All rights reserved. 6

Savings (Deposit) Accounts  Basic Low interest rate Low, if any, minimum balance  Money Market Higher interest rate Higher required balance Limited withdrawal privileges  CDs (Certificates of Deposit) Fixed interest rate, depends upon length of time specified Penalty if funds withdrawn early Copyright © Texas Education Agency, All rights reserved. 7

Lending  Mortgage New loan Home equity refinance  Auto  Student  Unsecured vs. secured Unsecured=personal loans with no collateral and higher interest rate Secured=collateral such as home, car, electronics and lower interest rate Copyright © Texas Education Agency, All rights reserved. 8

Other Services  Investments IRAs (Individual Retirement Accounts) Stocks, bonds, mutual funds  Wealth Management Customers with assets generally more than $1 million Bank can make decisions on behalf of the customer or the Customer can make decisions  Insurance  Credit Cards Compare rates Reward programs Copyright © Texas Education Agency, All rights reserved. 9

Other Services (continued)  Trust Services Estate planning – how assets are handled after a customer’s death Trust account administration – an officer of a financial institution can be appointed administrator Retirement planning – 401(k), IRA  Safe-deposit boxes Copyright © Texas Education Agency, All rights reserved. 10

Banking Service Options  Physical location  Online 24/7 access  Mobile Download app Photo (substitute) check feature  ATM Withdraw Deposit Balance Copyright © Texas Education Agency, All rights reserved. 11

Banking Services - Commercial Commercial Raising Capital Investing Risk Management InternationalPayroll Copyright © Texas Education Agency, All rights reserved. 12

Raising Capital Commercial loansReal estate SBA (Small Business Administration) loans Interim Financing-construction loans Copyright © Texas Education Agency, All rights reserved. 13

Investing  Investing in securities Managing corporate portfolios Goal of maximizing profit  Corporate Retirement plans Offering investment allocation options for a company’s employees Managing funds Copyright © Texas Education Agency, All rights reserved. 14

Risk Management  Types of risk: Credit- the potential for borrower non-payment Market (economy)- possible instability Investment- possibility of loss of money Liquidity- difficulty of converting to cash Fraud- possibility of being deceived  Insurance: Policies for employees Life, accident, health Warranties and extended service contracts Copyright © Texas Education Agency, All rights reserved. 15

International  Foreign currency exchange-buying and selling foreign currency to make a profit on exchange rates  Trade services-buying and selling foreign or domestic stocks, bonds, and commodities Copyright © Texas Education Agency, All rights reserved. 16

Independent Practice Assignments  Banking Services Brochure Assignment #1 – Students will create a brochure detailing at least six different types of services offered by financial institutions. They will also include a recommendation for each service as to which type of customer and for what situations the services would be most appropriate.  Task Card Poster and QR Code Assignment #2 – In pairs, students will select one of the Task Cards at the following web site: and make a recommendation as to what banking service or services would be most appropriate for that particular situation. Students are to also create a QR (Quick Response) code using any of the sites that allow you to create a free code that directs the audience to a specific financial institution that offers the service(s) chosen in the task. Students will present their poster to the class and have the audience members use their cell phones to view the QR code (if allowed by the teacher).  Banking Service Commercial Assignment #3 – Students, in pairs, will create a 30-second video advertisement, or commercial, using several of the different types of banking services about which they have learned. The commercial should have a clear purpose and intended audience. Copyright © Texas Education Agency, All rights reserved. 17