Wednesday, November 11, 2015 Objective: Students will be able to examine the roles of financial institutions and their impact on everyday Americans. Purpose: You will or already have your own bank account and will need to know what services are available through banks.

Banks Bank: A financial institution licensed as a receiver of deposits Two types: Commercial Banks and Investment Banks Banks are heavily regulated by the government Why do you think this is the case?

Commercial Banks

Commercial Banks Main Responsibilities: managing withdrawals and deposits Also supply short-term loans to individuals and small businesses Help customers manage day-to-day transactions Purpose for consumers: Use for basic checking and savings accounts, certificates of deposit and sometimes for home mortgages

Offshore Banks Offshore Bank: a bank located outside the country of residence of the depositor Advantages: greater privacy, easy access to deposits, generally higher interest rates Disadvantages: Limited access, less secure due to different regulations

Impact of Bank Size Large Banks Small-Bank Networks “Big Four” banks: Chase, Citibank, Wells Fargo, Bank of America Advantages: many convenient branch and ATM locations Disadvantages: higher fees and impersonal nature Small-Bank Networks Advantage: more personalized Disadvantages: only regional or local service, fewer ATMs Examples: US Bank, PNC, BB&T

Credit Unions vs. Banks Fees and loan rates at credit unions are generally lower and less numerous Savings account interest rates are generally higher than banks In order to join a credit union, potential members must be part of a field of membership, which is typically based on one’s employment, community, or membership in an association or organization