1. Financial Institutions
Information on Financial Institutions & Services
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at The University of Arizona

2. Financial Institutions Outline
Introduction
Definitions
Financial Institutions & Services Available
Benefits & Advantages
Financial Services
Review
This is what the power point presentation will cover to give the students an idea of the topics.
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

3. Introduction Why should a person learn about money management?
It’s a daily routine.
Everyone is involved with money.
Education saves time and money.
To become a millionaire!
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

4. Definitions
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

5. Financial Institutions
Definition – businesses which offer multiple services in banking and finance
Services may include savings & checking accounts, loans, investments, and financial counseling
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

6. Depository Institutions
Usually referred to as banks
Follow state and federal regulations
Offer banking services and loans
Serves both individuals and businesses
Examples – commercial banks, savings & loan associations, and credit unions
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

7. Insurance for Financial Institutions
Federal Deposit Insurance Corporation (FDIC)
Federal government agency which protects bank accounts
Each depositor is insured up to $100,000
Savings Association Insurance Fund (SAIF)
A branch of the FDIC
Provide insurance for Savings & Loan Associations
Same insurance level as the FDIC
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

8. Insurance for Financial Institutions continued
National Credit Union Administration (NCUA)
Same safety as deposits insured by the FDIC
Provides insurance for Credit Unions
A sign will be posted if a bank is insured
OR may say “Backed by the Full Faith and Credit of the United States Government” which insures each depositor up to $100,000
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

9. Financial Institutions
Commercial Bank
Savings and Loan Association
Credit Union
Brokerage Firm
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

10. Commercial Bank Full-service financial institutions
Wide variety of services and products
Operate under state and federal laws
Usually the largest financial institutions
FDIC insured
Examples – Wells Fargo, US Bank, First Interstate Bank
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

11. Commercial Bank Services
Checking Accounts
They are the only financial institution allowed to offer non-interest paying checking accounts
Savings Accounts
Safe-Deposit Boxes
Credit cards
Certificate of Deposit (CDs)
Financial Services
Investments
Loans
Mortgages
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

12. Savings and Loan Association (S&Ls)
Focuses on providing loans and mortgages to customers which hold a savings account
Generally pay a higher interest rate than commercial banks
Offer interest-earning checking accounts
SAIF insured
Examples – American Federal Savings Bank, Pioneer Federal Savings & Loan
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

13. S&L Services Checking Accounts Savings Accounts
Certificate of Deposit (CDs)
Retirement Plan Accounts
Financial Counseling
Investments
Loans
Mortgages
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

14. Credit Union
Non-profit cooperative financial institution, member owned
Members may have a common bond such as same employer, union, location, etc.
Usually charge lower fees and loan rates and offer higher interest rates
May offer free financial counseling
NCUA insured
Examples – Rocky Mountain Credit Union, Montana Federal Credit Union
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

15. Credit Union Services Share Draft Accounts (checking)
Share Accounts (savings)
Share Certificate Accounts (CDs)
Safe-Deposit Box
Credit Card
Financial Counseling
Investment
Loan
Mortgage
Retirement Plan Account
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

16. Brokerage Firm Relatively new to the marketplace Licensed institutions
Offer money management plans for investing
Provide financial assistance and advice
Monthly statements provided to track account activity
Examples – DA Davidson & Co., Merrill Lynch
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

17. Brokerage Firm Services
Investments
Bonds
Stocks
Mutual Funds
Financial Counseling
Real Estate Investment
Retirement Plan Accounts
**Customers can move money between accounts easily
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

18. Benefits & Advantages to using Financial Institutions
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

19. Benefits of Financial Institutions
Convenience
Quick and easy access to money
Different ways to access money
Teller’s window, drive-up window, automated teller machine (ATM), and electronic banking
Cost savings
Less expensive to purchase money orders and to cash checks
Other businesses may charge to cash checks
Having a checking account instead of buying money orders saves money
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

20. Benefits continued Safety Security Protection from fire, theft, & loss
Money is protected by the federal government in federally insured institutions
Up to $100,000 for each depositor
Signs are displayed if institutions are insured stating:
FDIC, NCUA, or Backed by the Full Faith and Credit of the United States Government
Not all are insured – look for the sign and ask!
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

21. Advantages
Using one financial institution may include these advantages:
Simplicity – having all accounts at one place can simplify banking
Relationship – establishing relationships can be beneficial when applying for loans
Lower interest rates on loans may be offered to loyal customers!
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

22. Remember
Shop around for the best service, rates, products, and locations before choosing a financial institution!!!
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

23. Financial Institution Services
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

24. Definition of Services
Bonds
Lending money to an organization as an investment, an “IOU”
Purchased at a fixed interest rate and period of time
Certificate of Deposit (CD)
An insured interest earning savings instrument with restricted access to the funds.
An investment with no risks and no fees
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

25. Services continued Checking Account Credit Card
Paper checks or debit cards are used to withdraw money deposited into the account to pay for items
May be interest or non-interest bearing
Credit Card
A plastic card used to make a purchase now to be repaid later usually with interest to the credit card company
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

26. Services continued Financial Counseling Investment Loan
Information and advice given to customers to help them make decisions about financial issues
Investment
A commitment of money to achieve long-term financial goals
Many different types are available
Loan
Borrowed money consumers apply for at financial institutions
Paid back at various interest rates in payments
Investment examples – stocks, bonds, CDs, mutual funds, etcl
Examples of loans – car loans, mortgages, personal loans, etc.
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

27. Services continued Mortgage Mutual Fund Real Estate Investment
A long-term loan to purchase real estate such as a house
Mutual Fund
Groups of stocks, bonds, and other investments managed by an investment firm
Real Estate Investment
Purchasing real estate as an investment
May buy a lower priced house, make improvements, and sell at a higher price
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

28. Services continued Retirement Plan Account Safe-Deposit Box
Plans to set aside money for retirement
Money is tax-deferred until withdrawn
May be offered through an employer or set up through a financial institution
Safe-Deposit Box
A secured box in a bank to be used for valuable and important personal items
Items are safe from theft and fire
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

29. Services continued Savings Account Share Account
Money is deposited into an account to earn interest
Funds are easily accessible and safe
Share Account
A savings account at a Credit Union
Share Certificate Account
A certificate of deposit at a Credit Union
Share Draft Account
A checking account at a Credit Union
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

30. Services continued Stock Ownership in corporation
Represented by shares
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

31. Review
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

32. Review Money management is part of everyday life!
Financial institutions offer multiple services – shop around for the one which best fits your needs!
Check to see if the financial institution is insured by the FDIC, SAIF, or the NCUA.
Learn about the financial services before choosing one.
Example – checking, savings, investments, etc.
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

33. The End
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona