Where do I keep my money?
Financial Institution – Organization that channels savings to investors. How does it work? ◦ You deposit money ◦ You get paid in interest for keeping your money there ◦ They loan some of your money to borrowers ◦ Borrowers repay loan plus interest ◦ They keep the difference in interest amounts
Def. – Payment made for the use of borrowed money. Interest Rate – Percentage a bank will pay to depositors or charge to borrowers. Interest rates set by central bank of each country
Most common & safest – WHY? ◦ Deposits are insured by FDIC What do they do? ◦ Accept deposits ◦ Lend & transfer funds ◦ Manage day-to-day transactions
Def. – Not-for-profit banks that have been created for a specific group of people. Examples: ◦ State Employees ◦ School Districts ◦ Big Companies Benefits: ◦ Goal – Share profits with the members ◦ Offer perks big banks cannot offer ◦ Lower fees & interest rates
Some financial institutions do not accept deposits, but still channel savings to borrowers. Finance Companies – Make loans directly to customers to finance large purchases. Life Insurance Companies – Lend surplus funds Investment Banks – Buy & sell stocks (Securities)
Routing Number Check Number Amount Account Holder Account Number Who Gets Paid
Date: 9/1/2015 Who are we paying? Whoever you live with How much? $ Why are we paying? Rent for September Sign your name
9/2/2015 Groceries (Pick your favorite grocery store) $250.00
Why? How? ◦ Check Number ◦ Date ◦ Reason ◦ Amount (Withdrawal/Deposit) ◦ Balance Balance your checkbook for the groceries you bought
Use the following transactions to fill in your check book register 1.On 9/10 you paid your cellphone bill ($75) 2.On 9/15 you received your monthly paycheck ($3000) 3.On 9/18 you made a car payment ($500) 4.On 9/21 you paid your cable bill ($175) 5.On 9/24 you bought groceries again ($200) 6.On 9/28 you bought a soccer shirt ($30) 7.On 9/30 you paid to have your car repaired ($2000) 8.Calculate your ending balance.