1. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 1 17-1 17-1Banks and Other Financial Institutions 17-2 17-2Financial Services and Electronic Banking 17-3 17-3Checks and Payment Methods 17 C H A P T E R Banking and Financial Services

2. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 2 THE BANKING SYSTEM ●The Federal Reserve System (Fed) ●12 Banks ●Federal Reserve activities ●Reserves ●Clearing Checks ●Banking and the economy

3. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 3 Checkpoint ●What is the main purpose of the Federal Reserve System? ● The Federal Reserve System was created by the federal government to supervise and regulate member banks and to help banks serve the public efficiently by holding reserves and clearing checks.

4. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 4 TYPES OF FINANCIAL INSTITUTIONS ●Deposit institutions ●Non-deposit financial institutions

5. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 5 DEPOSIT INSTITUTIONS ●Commercial banks ●Savings and loan associations ●Mutual savings banks ●Credit unions ●Not-for-Profit. People in the same company or profession might start one.

6. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 6 NON-DEPOSIT FINANCIAL INSTITUTIONS ●Life insurance companies ●Investment companies ●Consumer finance companies ●Mortgage companies ●Check-cashing outlets ●Pawnshops

7. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 7 Checkpoint ●What are some examples of non-deposit financial institutions? ●Examples of non-deposit financial institutions include life insurance companies, investment companies, consumer finance companies, mortgage companies, check-cashing outlets, and pawnshops.

8. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 8 SELECTING A FINANCIAL INSTITUTION ●Services offered ●Savings accounts ●Checking and payment accounts ●Loans and other credit plans ●Other services, such as safe-deposit boxes ●Safety ●Convenience ●Fees and charges ●Restrictions

9. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 9 TYPES OF FINANCIAL SERVICES ●Savings services ●Payment services ●Lending services ●Electronic banking ●Storage of valuables ●Investment advice ●Management of trusts

10. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 10 TYPES OF CHECKING ACCOUNTS ●Regular checking accounts ●Interest-earning ●Checking accounts ●Special checking accounts

11. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 11 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

12. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 12 ELECTRONIC BANKING ●E-banking services ●Automatic teller machines ●Payments at the point-of-sale ●Direct deposit ●Automatic bill payments

13. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 13 ELECTRONIC PAYMENT OPTIONS ●Debit card transactions ●Online payments ●Stored-value cards ●Smart cards

14. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 14 BANKING IN THE FUTURE ●Financial services combined with wireless technology ●Personalized systems for obtaining, transferring, and using funds

15. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 15 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

16. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 16 THE FIRST DEPOSIT ●Signature card ●Joint account ●Deposit slip

17. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 17 TYPES OF ENDORSEMENTS ●Blank endorsement ●Full endorsement ●Restrictive endorsement ●Special endorsement ●Two signatures required ●Restrictive endorsement

18. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 18 SAMPLE ENDORSEMENTS

19. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 19 USING A CHECKING ACCOUNT ●Check-writing procedures ●Elements of a check ●The check register ●Writing a check ●Proper check writing ●Stopping payment

20. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 20 PARTS OF A CHECK

21. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 21 THE RECONCILIATION PROCESS ●Bank statement information ●Determine checks paid ●Find differences ●Calculate adjusted balance

22. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 22 RECONCILIATION FORM

23. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 23 Checkpoint ●What are causes of differences between the bank statement balance and a check register? ●Checks that have not cleared ●Deposits mailed to the bank that may not have arrived by the time the statement was issued ●Transactions that may not have been recorded in the check register ●Transactions that were not recorded correctly ●Service charges or interest earned

24. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 24 OTHER TYPES OF PAYMENTS ●Certified checks ●Cashier’s checks ●Traveler’s checks ●Money orders

25. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 25 CERTIFIED CHECKS ●Personal check for which a bank has guaranteed payment ●Certification stamped on face ●Signed or initialed by a bank officer

26. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 26 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

27. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 27 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

28. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 28 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

29. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 17 SLIDE 29 Checkpoint ●How does a certified check differ from a cashier’s check? ●A certified check is a personal check for which a bank has guaranteed payment. ●A cashier’s check is a check that a bank draws on its own funds.