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Banking and Financial Services

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Presentation on theme: "Banking and Financial Services"— Presentation transcript:

1 Banking and Financial Services
17 Banking and Financial Services 17-1 Banks and Other Financial Institutions 17-2 Financial Services and Electronic Banking 17-3 Checks and Payment Methods

2 LESSON 17-1 Banks and Other Financial Institutions
Goals Explain the purpose of the Federal Reserve System. List the types of financial institutions. Discuss factors for selecting a financial institution. Chapter 17

3 Key Terms Federal Reserve System (Fed) commercial bank credit union
Federal Deposit Insurance Corporation (FDIC) Chapter 17

4 THE BANKING SYSTEM The Federal Reserve System (Fed)
Main purpose is to supervise and regulate member banks and to help banks serve the public efficiently All national banks are required to join – becoming member banks. United States divided into 12 districts with a central Federal Reserve Bank in each district. Chapter 17

5 Chapter 17

6 THE BANKING SYSTEM Federal Reserve activities Supervise banks
Holding of reserves – banks are required to keep a part of the money they receive from customers on deposit in case the banks need additional funds to meet the daily customer demand As a clearinghouse Uses electronic funds transfer (EFT) to pay checks among different banks in different cities Chapter 17

7 THE BANKING SYSTEM Banking and the Economy
The savings you and others deposit make banking services possible. Deposits do not remain idle in the bank, they are put to work. Chapter 17

8 Some of the activities for which banking services are used include:
Building homes Starting new businesses Planting crops Financing educations Buying goods Paving streets Investing for retirement Building hospitals These activities create jobs and economic growth. Chapter 17

9 TYPES OF FINANCIAL INSTITUTIONS
Chapter 17

10 Deposit Institutions Commercial banks Most common bank organization
Also known as full-service bank because they offer services such as: Checking accounts Savings accounts Loans to businesses and individuals May find branches in shopping centers and grocery stores Chapter 17

11 Deposit Institutions Savings and loan associations
Traditionally specialized in savings accounts and making loans for home mortgages Recently have expanded to offer a wider variety of services Chapter 17

12 Deposit Institutions Mutual savings banks
A savings bank that is owned by, and operated for the benefit of, its depositors. Profits are distributed in proportion to the amount of business each participant does with the company. Organized mainly for savings and home loans. Located mainly in the northeastern United States. Chapter 17

13 Deposit Institutions Credit unions
User-owned, not-for-profit, cooperative financial institution Comprised of people in the same company, government agency, or profession Accept savings deposits and make loans Regulated by NCUA, the National Credit Union Administration Chapter 17

14 TYPES OF FINANCIAL INSTITUTIONS
(continued) Non-deposit financial institutions Life insurance companies Investment companies Consumer finance companies Mortgage companies Check-cashing outlets Pawnshops Chapter 17

15 >> C H E C K P O I N T What are some examples of non-deposit financial institutions? Chapter 17

16 SELECTING A FINANCIAL INSTITUTION
Services offered Savings accounts Checking and payment accounts Loans and other credit plans Other services, such as safe deposit boxes Chapter 17

17 SELECTING A FINANCIAL INSTITUTION
Safety Federal Deposit Insurance Corporation (FDIC) helps to regulate banks and protects depositors’ money in case of the failure of a bank Insures all accounts in the same name at each bank up to an amount of $100,000 (temporarily increased by the government to $250,000 per depositor through December 31, 2009) Chapter 17

18 SELECTING A FINANCIAL INSTITUTION
Convenience 24-hour banking Branch offices in convenient locations ATMs in convenient locations On-line banking Chapter 17

19 SELECTING A FINANCIAL INSTITUTION
Fees and charges Compare your needs with the price you pay Watch for hidden fees such as ATM fees Restrictions Minimum deposit requirements Amount Time Chapter 17

20 >> C H E C K P O I N T What factors should be considered when selecting a financial institution? Chapter 17

21 LESSON 17-2 Financial Services and Electronic Banking
CHAPTER 17 4/19/2017 LESSON 17-2 Financial Services and Electronic Banking Goals Identify the financial services used by consumers. Explain types of checking accounts. Describe electronic banking activities. Chapter 17

22 Key Terms safe-deposit box service charge debit card Chapter 17

23 TYPES OF FINANCIAL SERVICES
Savings services Payment services Lending services Electronic banking Storage of valuables Investment advice Management of trusts Chapter 17

24 >> C H E C K P O I N T What are the main financial services used by consumers? Chapter 17

25 TYPES OF CHECKING ACCOUNTS
Regular checking accounts Interest-earning Checking accounts Special checking accounts Chapter 17

26 COMPARING CHECKING ACCOUNTS
Minimum balance Interest rate earned, if any Monthly service charge Fees for other services, such as printing checks and stop payment orders Other restrictions Chapter 17

27 >> C H E C K P O I N T What are three main types of checking accounts? Chapter 17

28 ELECTRONIC BANKING E-banking services Automatic teller machines
Payments at the point-of-sale Direct deposit Automatic bill payments Chapter 17

29 ELECTRONIC PAYMENT OPTIONS
Debit card transactions Online payments Stored-value cards Smart cards Chapter 17

30 BANKING IN THE FUTURE Financial services combined with wireless technology Personalized systems for obtaining, transferring, and using funds Chapter 17

31 >> C H E C K P O I N T What are common electronic banking services? Chapter 17

32 LESSON 17-3 Checks and Payment Methods
Goals Describe three main types of endorsements. Describe proper check-writing procedures. Explain the bank reconciliation process. Identify other payment methods. Chapter 17

33 Key Terms endorsement check register stop payment order bank statement
bank reconciliation outstanding checks Chapter 17

34 OPENING A CHECKING ACCOUNT
Benefits of checking accounts Convenience and ease of making payments Safety to make payments with less risk than using cash Proof of payment A record of finances for managing your money Chapter 17

35 THE FIRST DEPOSIT Signature card Joint account Deposit slip Chapter 17

36 SIGNATURE CARD Chapter 17

37 TYPES OF ENDORSEMENTS Blank endorsement Full endorsement
Restrictive endorsement Special endorsement Two signatures required Chapter 17

38 SAMPLE ENDORSEMENTS Chapter 17

39 >> C H E C K P O I N T What are the three types of endorsements?
Chapter 17

40 USING A CHECKING ACCOUNT
Check-writing procedures Elements of a check The check register Writing a check Proper check writing Stopping payment Chapter 17

41 PARTS OF A CHECK Chapter 17

42 >> C H E C K P O I N T What is the purpose of a check register?
Chapter 17

43 THE RECONCILIATION PROCESS
Bank statement information Determine checks paid Find differences Calculate adjusted balance Chapter 17

44 MONTHLY ACCOUNT STATEMENT
Chapter 17

45 RECONCILIATION FORM Chapter 17

46 >> C H E C K P O I N T What are causes of differences between the bank statement balance and a person’s check register? Chapter 17

47 OTHER TYPES OF PAYMENTS
Certified checks Cashier’s checks Traveler’s checks Money orders Chapter 17

48 CERTIFIED CHECKS Personal check for which a bank has guaranteed payment Certification stamped on face Signed or initialed by a bank officer Chapter 17

49 CASHIER’S CHECKS Check that a bank draws on its own funds
Costs the amount of the check plus a service fee More acceptable than the personal checks Chapter 17

50 TRAVELER’S CHECKS Special forms designed for making payments when away from home Require your signature in two places Cash a check or pay for a purchase Commonly accepted throughout the world Chapter 17

51 MONEY ORDERS Form of payment that orders the issuing agency to pay the amount printed on the form to another party A bank money order A postal money order An express money order A telegraphic money order Chapter 17

52 >> C H E C K P O I N T How does a certified check differ from a cashier’s check? Chapter 17


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