Foundations of Personal Finance Ch. 8

Foundations of Personal Finance Ch. 8 Financial Institutions and Services 2

Chapter Objectives Identify different ______of financial institutions. _______the financial services that will best meet your needs. Use ______and debit cards responsibly. _________a personal checking account. Write and __________checks correctly. ___________a checkbook balance.

Types of Financial Institutions Economic ______cannot function without financial institutions They are financial ____-_______ that keep money flowing throughout the economy among consumers, businesses, and government

Foundations of Personal Finance Ch. 8 Commercial Banks ___________banks offer a wide variety of services continued

Foundations of Personal Finance Ch. 8 Commercial Banks ____________________________________(FDIC) maintains confidence in the banking system by _______bank customers’ deposits _______and ________financial institution policies and operations

Savings and Loan Associations ____________________________(S&L) offer many of the same services of commercial banks _____S&L ______: ________savings and loan associations

Credit Unions _____________memberships available through employers, unions, religious organizations, community organizations, or other groups ______operating ______ (no federal income taxes required) allow them to ____ _______ _______ rates on savings and charge _____ ______ on loans continued

Credit Unions Either federally or state___________ __________________________________(NCUA) _________federal _________ __________credit __________ across the country _________deposits

Foundations of Personal Finance Ch. 8 In Your Opinion Would you prefer to use a credit union if you had access to one? Why or why not?

Mutual Savings Banks Mutual savings banks exist in only ____states _______ _______ among depositors as dividends Offer a wide variety of services Receive and pay dividends on deposits Make home mortgage and improvement loans

Choosing a Financial Institution Foundations of Personal Finance Ch. 8 Choosing a Financial Institution What ________ does the institution provide? What ______are charged? Is the staff helpful?

Safety Look for signs that say “Insured by the________” This means the institution is regularly _________and passes ongoing examinations

_______of Financial Institutions Electronic funds transfer (_____) makes transactions quickly and conveniently Automated teller machine (____) lets you access your account to ______cash, make__________, perform other services To use an ATM you need an ATM_______ a personal identification number (_____)

Direct Deposits or Withdrawals Foundations of Personal Finance Ch. 8 Direct Deposits or Withdrawals Checks and payments are _________ _________into an account Bills can be paid _______writing and mailing _______ Money can be _________ __________ from checking to savings

Point-of-Sale Transfers (_____) Moves money ______your _______to pay for a purchase without using______,______, or__________ A merchant scans a ______card and purchase ______immediately ________ ______ customer’s to merchant’s ______account

Online Banking Services Online access to accounts using _________number and security______ You can _____account____________ _________account history ________electronic bill__________ _________deposits, withdrawals, and transfers Personal financial ________often available

Foundations of Personal Finance Ch. 8 Overdraft Protection _______—the act of withdrawing money or writing a check for an amount ______than an _______ ___________ Financial institutions offer overdraft protection Banks _____ ____ for each overdraft

_____ _______ A financial institution will _______to ______a ______ written by a customer A ____is usually________ Customers _______request this service

_____-___ and _____-__ Services Foundations of Personal Finance Ch. 8 _____-___ and _____-__ Services Customers make deposits and withdrawals by _____ drive-up____________

Foundations of Personal Finance Ch. 8 _____-_______ Boxes Customers’ important documents and valuables are stored in a secure______ An ______ ____ is usually charged

Other Special Programs ______ preparation ___________ ____reporting____________ ________ ____________ _______ ________ _______ __________ _______

Personal ______Accounts _______of checking accounts: _____place to keep money ____way to _____goods and services ____way to ___ _____ Provides ________of deposits and receipts Aids in _______ ______________ Helps ______sound ______ ________

Accounts and Services Look for financial institutions that offer the accounts and services you want in a checking account Ask about availability of different features and their fees, if any

Restrictions and Penalties Foundations of Personal Finance Ch. 8 Restrictions and Penalties __________ ______requirements Withdrawal ______________ ________penalties ____ _________on credit penalties

Fees and Charges __________ fees ______for _____use ____-__________ penalties _____ -_________ fees _______-__________ costs

Interest Rates Interest rates paid on ________-________ checking accounts charged to _______ _________charged to use a bank credit card _____for ____ _______ on _______and ____ ________ for using _________

Convenience Convenient_______ ______in various and convenient ____________ ______banking availability _______ _______offered

Checking Account______ Foundations of Personal Finance Ch. 8 Checking Account______ ______checking accounts are good for people who write _____ ______ and can keep the _________balance continued

Checking Account Types _________savings and checking account Also called _____ _______ or ______accounts (Negotiable Orders of Withdrawal) ___________account: An option for ____-_________ customers (low min. dep., min. bal., low monthly fee, limit on # of checks written)

Opening a Checking Account _____a signature______ Those _____ ___usually need a _____ _______with a______; spouses often share joint accounts ______all ____ ______ and _______ _____ that you use Keep ______of transactions with a ________

Managing the Cards Linked to Your Account ______of _____and ______cards: _______need to carry lots of_____ ________to your ______at any_______ Access to your money almost________ Access to goods and services of businesses that ___ ____ _____ ________ continued

Managing the Cards Linked to Your Account _____all __________ _______ _______ and _____in checkbook register __________ your card and PIN ______ _____ ______ and don’t overdraw your account

Foundations of Personal Finance Ch. 8 ATM Cards Use ATMs _______with your bank’s________ Usually ___ ____ charged Other ATMs charge fees, which can add up

Debit Cards Used at _____and ________that accept credit cards _______to writing a______; the purchase ______ ______ directly ____your ________ account

Making Deposits Deposits can be made _____out a deposit_____ By________ at an____ _____out a deposit_____ ______ _______ and ______ _______in your register

Foundations of Personal Finance Ch. 8 _________Checks ______you _____or _______a ______made out in your name, you must endorse it continued

Endorsing Checks _______ways to endorse a check: _______endorsement–just the payee signs ( use at time and place of deposit or cashing) _________endorsement–the specific use is noted, such as “____ ________ _____” (Used when banking by mail or ATM) _________endorsement–the payee writes “pay to the order of…” and signs, and the ____ _____ also ________

Writing Checks Use ____ _____ In case of_____, ______check and write a new one Fill in the ______ ________name check amount in ______and_______ Your___________ continued

Writing Checks Filling out checkbook _________ Record check_____, _____,_______, and_________ _______ check amount ____ __________ ______ _______ _____ and_______ ____ _______ amount to_______ For destroyed checks, write number and “_______”

Balancing Your Checkbook Foundations of Personal Finance Ch. 8 Balancing Your Checkbook Bank statements are sent out_________ Always check the statements against your records continued

Balancing Your Checkbook Bank statement contents include beginning and ending___________ Total ______of ______and________ total amount of _______and_________ _______of checks paid (dates, numbers, amounts) and canceled checks or check photocopies other items paid (withdrawals, fees, bills) deposits and credits (dates, descriptions, amounts) continued

Balancing Your Checkbook 1. _______canceled _______with those recorded in checkbook register 2. ______ _______in register with those on statement and your receipts 3. _____ _____ transactions and _____in register against those on statement continued

Balancing Your Checkbook 4. _______ service ______on statement from register balance 5. Account for checks, ATM transactions, and deposits not yet on statement 6. If numbers from Step 5 and bank statement ______are ___ _____, check math or _____the _____for help

In Your Opinion Why might you want to balance your checkbook more often if you make debit purchases or bank online?

Foundations of Personal Finance Ch. 8 Special-Use Checks Most financial institutions offer these, usually for a fee ________ checks (A bank ck. That guarantees payment) _______checks (personal ck. – bank guarantees payment) ______orders (Order for specific amt. to be paid to a payee) traveler’s checks (If lost – replaced. Sign only when cashing)

Central Ideas of the Chapter Financial institutions are vital to the economy because they make financial transactions possible. A checking account is a basic tool to help you manage your financial resources.

Glossary of Key Terms Back ATM card. A card that allows customers to withdraw cash from and make deposits to their accounts using an ATM. automated teller machine (ATM). A computer terminal used to transact business with a financial institution. bank statement. A record of checks, deposits, and charges on a checking account.

Glossary of Key Terms Back cashier’s check. A check drawn by a bank on its own funds and signed by an authorized officer of the bank. certified check. A personal check with a bank’s guarantee the check will be paid. commercial bank. A bank owned by stockholders and organized to receive, transfer, and lend money to individuals, businesses, and governments.

Glossary of Key Terms Back credit union. A nonprofit financial cooperative owned by and operated for the benefit of its members. It accepts deposits, makes loans, and provides other services. electronic funds transfer (EFT). The movement of money electronically from one financial institution to another. endorse. To sign one’s name on the back of a check in order to cash or deposit the check.

Glossary of Key Terms Back Federal Deposit Insurance Corporation (FDIC). A U.S. government agency that protects bank customers by insuring deposits as well as examining and supervising financial institutions. money order. An order for a specific amount of money payable to a specific payee.

Glossary of Key Terms Back mutual savings bank. A saving depository owned by the depositors that divides the profits among depositors in the form of dividends. National Credit Union Administration (NCUA). An agency that grants federal charters to qualified groups, supervises credit unions, and insures accounts in all federally chartered and many state chartered credit unions.

Glossary of Key Terms Back savings and loan association (S&L). A for-profit financial institution that receives and pays dividends on depositors’ savings, makes mortgage loans, and offers most of the services commercial banks offer. traveler’s checks. Checks that can be cashed in most places around the world. They are often used by people who travel and do not want to carry large amounts of cash.