Depository Institutions Take Charge of Your Finances

Depository Institutions Depository Institutions – businesses which offer multiple services in banking and finance These institutions include: Banks Savings and Loans Credit Unions They are regulated by the Federal Reserve or other state and federal agencies This is what the power point presentation will cover to give the students an idea of the topics.

Depository Institutions Commercial Bank Credit Union Savings and Loan Association

Commercial Bank Primary Characteristics Examples Usually the largest depository institutions Considered full-service depository institutions Checking & savings accounts, loans, credit cards, trusts, safety deposits, foreign exchange, investments and/or financial counseling Available to a variety of consumers (personal & business) Examples Local or regional banks~Pulaski, Eagle or FCB National banks~Wells Fargo, US Bank, Chase Bank (offer banking and investment service)

Commercial Banks Advantages Disadvantages Convenience Multiple locations locally and/or nationally Wide variety of services to meet individual needs Updated on current banking trends (mobile /online banking) FDIC insured up to $250,000 Federal Government Agency that insures commercial banks and savings & loans against loss For Profit Interest rates on interest-bearing accounts may be lower than credit unions Interest rates on loans may be higher than credit unions Fees associated with services may be higher than other institutions

Credit Union Primary Characteristics Non-profit cooperative depository institution Owned by members who share a common bond live in same community, work, religious based Examples – First Community, Anheuser-Busch Credit Union, Christian Community

Credit Union Advantages Disadvantages Interest rates on interest-bearing accounts may be higher than commercial banks Interest rates on loans may be lower than commercial banks Common affiliation may provide personalization NCUA insured up to $250,000 Insurance protection through the National Credit Union Association Fewer locations Fewer services provided Slower to stay updated on trends in banking

Savings and Loan Association (S&Ls) Primary Characteristics It is generally a locally owned and privately managed home financing institution. It receives individuals' savings and uses these funds to make long-term loans to home purchasers. It makes loans for the construction, purchase, repair, or refinancing of houses. It is state or federally chartered. Examples – American Federal Savings Bank, Ozarks Federal Savings

Savings & Loan Associations Advantages Disadvantages Focus on mortgage lending and have experts to assist in the process Interest rates on interest-bearing accounts may be higher than commercial banks Interest rates on loans may be lower than commercial banks FDIC insured up to $250,000 Federal Government Agency that insures commercial banks and savings & loans against loss Fewer locations Fewer services provided May not meet all your banking needs

Brokerage Firms Examples – Edwards Jones, Wachovia, Morgan Stanley Primary Characteristics Business whose main responsibility is to accept trades between buyers and sellers of stocks, bonds, mutual funds and other investments.  Brokerage companies are paid commission after the transaction has been successfully completed. May provide investment advice for wealth planning such as college funds, retirement savings and estate planning Examples – Edwards Jones, Wachovia, Morgan Stanley

Brokerage Firms Advantages Disadvantages Receive advice on growing wealth Buys and sells investment options Experts educated in wealth planning and investing Not FDIC insured Pay for service or advice Provides fewer banking services