SSEPF2a Compare services offered by different financial institutions Standard SSEPF2a Compare services offered by different financial institutions

Financial Institutions Financial institutions are places where people manage, protect, and increase their money.

Types of Financial Institutions Commercial Banks Savings and Loans associations (S&L’s) Credit Unions Pay day loan company

Roles of financial institutions Banks Banks provide a safe means to store earnings Services offered: Direct deposit Check-writing services Debit & credit cards Loans (cars, business, home, etc) +more! (eg. INVESTMENT SERVICES, SAFE DEPOSIT BOXES)

Roles of financial institutions Credit Union Similar to a bank however credit unions have members and services are only offered to its members. Members own and control the credit union Benefit of a CU: higher interest rates for savings and lower interest rates for loans Credit unions offer all or most of the same services of a bank

Roles of financial institutions Savings and Loan Offers only 2 services: savings accounts and home loans (called mortgages) Money put into an s&L is not as easily accessible however savers earn higher rates of interest. S&L’s are mortgage experts and therefore often handle complex home loans.

Roles of financial institutions Payday Loan Company Payday loan companies provide small loans in return for a portion of a borrowers upcoming check Example: you need $50 on Wednesday, but do not get paid until Friday. You borrow the money from a payday loan company and owe $55 on Friday. These companies often charge VERY high interest rates. It is easy to become trapped in the payday loan company service.

Roles of financial institutions Payday Loan Company “Most payday loan borrowers get stuck in 'revolving door of debt‘” "Many consumers would never dream of paying an annual percentage rate of 400% on a credit card or any other type of loan, but they might do it for a payday loan where it feels like they can get in and out of the loan very quickly," he said. The report said it can be difficult for borrowers to pay off such loans, causing their costs to skyrocket. Only 15% of borrowers are able to pay off the loan within 14 days without rolling it over or taking out another, the bureau said. http://articles.latimes.com/2014/mar/24/business/la-fi-payday-loans- 20140325

Types of banking services

Checking account Checking accounts- safe place to keep money with access at almost any time Use of a check card (looks like a visa or master card) to pay for goods and services with money coming directly from your checking account Ability to write paper checks Consumers must keep up with their account balance at all time to avoid bank fees.

Savings Account Savings Account safe place to let your money grow Consumers earn interest on their money while it is in the account Limited amount of withdrawals allowed without fees Not for consumers who want to access their money frequently

Credit Services Credit Services Installment Loan Credit Card Mortgages Home equity Student Loans Small Business Loans

Activity-Brochure You will need 2 sheets of copy paper Stagger the two sheets and fold hotdog style so that you have 4 “leafs” in which to work with The top should be labeled “Financial institutions” There should be 4 sections along the top with each of the types we learned about today You will use the pieces to provide a description of the financial institution, the products offered, and an example or picture.