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

© 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

© 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.

© 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

© 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.

© 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

© 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.

© 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

© 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

© 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

© 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

© 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

© 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

© 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

© 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

© 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

© 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

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

© 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

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

© 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

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

© 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

© 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

© 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

© 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

© 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

© 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

© 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.