FINANCIAL SERVICES AND INSTITUTIONS

Financial Services  Services offered by banks and other financial institutions 1. Savings and Investment 2. Payment Services 3. Borrowing

Services for Short Term Needs  Daily cash needs  Check Cashing  Automated teller machines (ATM’s)  Prepaid cards  Savings  Regular savings account  Money market account

Services for Short Term Needs  Checking  Regular checking account  Online payments, payment by phone  Automatic preauthorized payments  Cashier’s checks, Money orders  Credit Cards

Services for Long Term Needs  Savings  Certificates of Deposit (CD’s)  U.S. Savings Bonds  Credit Services  Loans for cars, educations, etc.  Home equity loans  Mortgages

Services for Long Term Needs  Investment Services  Mutual funds  Financial advice  Other Services  Tax preparation  Insurance

Types of Financial Institutions  Deposit Institutions  Commercial Banks  Savings and Loans  Mutual Savings Banks  Credit Unions

Types of Financial Institutions  Non-Deposit Institutions  Life Insurance Companies  Investment Companies  Finance Companies  Others?

Electronic Banking / Payment  Direct deposit  Automatic payments  ATM’s  Fees  Debit cards  Cash card and point of sale  Overdraft “protection”  Prepaid cards and gift cards  Electronic cash

Savings Plans Type of AccountBenefitsDrawbacks Regular Savings Account- Low minimum balance - Ease of withdrawal - Insured - Low rate of return Certificates of Deposit (CD’s) - Guaranteed rate of return - Insured - Penalty for early withdrawal - Minimum deposit Money Market Account- Good rate of return - Some check writing - Insured - Minimum balance - Penalties if below minimum U.S. Savings Bond- Low minimum deposit - Guaranteed by gov’t - No state/local taxes - Lower rate of return if cashed in early

Truth in Savings Law  Financial institutions must provide:  Fees on deposit accounts  Interest rates  Annual percentage yield  Terms and conditions

Banking Vocabulary APY ATM Bad check Cashier’s check CDs Certified check Check Checking account Commercial bank Credit union Debit card Demand deposits EFT transaction fee FDIC Joint account Money-market account Money order Savings and Loan Association Sweep Trust

Checking Accounts  Regular checking accounts  Interest earning checking accounts  Special types  Student  Activity accounts

Checking Accounts  Key Factors  Restrictions Minimum balance? Maximum number of transactions or checks  Fees and charges Monthly service charge Check printing Overdraft protection Stop payment order  Interest

Writing Checks Routing number Account number Your name

Cashing Checks  Endorsements  Blank endorsement  Restrictive endorsement  Special endorsement  Tips  Do not endorse until ready to cash  Use a pen  Use exact same name as on front  Give time for check to clear

Check Writing Simulation  You have $1,000 to spend – do not spend more  Buy the items you wish (3 total) by writing checks  Be sure to put your name at the top of the check  Keep an active register with current and final balances  Hand in both sheets properly labeled  Scoring  Checks properly written (7 pts)  Register properly written (7 pts)  Balances correct (6 pts)