Introduction to Business © Thomson South-Western ChapterChapter Banking and Financial Services Banks and Other Financial Institutions Financial Services and Electronic Banking Checks and Payment Methods 17

Introduction to Business © Thomson South-Western Chapter 17 Slide 2 LESSON 17-1 Banks and Other Financial Institutions Goals Explain the purpose of the Federal Reserve System. List the types of financial institutions. Discuss factors for selecting a financial institution.

Introduction to Business © Thomson South-Western Chapter 17 Slide 3 Key Terms Federal Reserve System (Fed) commercial bank credit union Federal Deposit Insurance Corporation (FDIC)

Introduction to Business © Thomson South-Western Chapter 17 Slide 4 THE BANKING SYSTEM The Federal Reserve System (Fed) Federal Reserve activities Banking and the economy

Introduction to Business © Thomson South-Western Chapter 17 Slide 5 >> C H E C K P O I N T What is the main purpose of the Federal Reserve System?

Introduction to Business © Thomson South-Western Chapter 17 Slide 6 TYPES OF FINANCIAL INSTITUTIONS Deposit institutions Commercial banks Savings and loan associations Mutual savings banks Credit unions

Introduction to Business © Thomson South-Western Chapter 17 Slide 7 TYPES OF FINANCIAL INSTITUTIONS Non-deposit financial institutions Life insurance companies Investment companies Consumer finance companies Mortgage companies Check-cashing outlets Pawnshops (continued)

Introduction to Business © Thomson South-Western Chapter 17 Slide 8 >> C H E C K P O I N T What are some examples of non-deposit financial institutions?

Introduction to Business © Thomson South-Western Chapter 17 Slide 9 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

Introduction to Business © Thomson South-Western Chapter 17 Slide 10 >> C H E C K P O I N T What factors should be considered when selecting a financial institution?

Introduction to Business © Thomson South-Western Chapter 17 Slide 11 LESSON 17-2 Financial Services and Electronic Banking Goals Identify the financial services used by consumers. Explain types of checking accounts. Describe electronic banking activities.

Introduction to Business © Thomson South-Western Chapter 17 Slide 12 Key Terms safe-deposit box service charge debit card

Introduction to Business © Thomson South-Western Chapter 17 Slide 13 TYPES OF FINANCIAL SERVICES Savings services Payment services Lending services Electronic banking Storage of valuables Investment advice Management of trusts

Introduction to Business © Thomson South-Western Chapter 17 Slide 14 >> C H E C K P O I N T What are the main financial services used by consumers?

Introduction to Business © Thomson South-Western Chapter 17 Slide 15 TYPES OF CHECKING ACCOUNTS Regular checking accounts Interest-earning checking accounts Special checking accounts

Introduction to Business © Thomson South-Western Chapter 17 Slide 16 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

Introduction to Business © Thomson South-Western Chapter 17 Slide 17 >> C H E C K P O I N T What are three main types of checking accounts?

Introduction to Business © Thomson South-Western Chapter 17 Slide 18 ELECTRONIC BANKING E-banking services Automatic teller machines Payments at the point-of-sale Direct deposit Automatic bill payments

Introduction to Business © Thomson South-Western Chapter 17 Slide 19 ELECTRONIC PAYMENT OPTIONS Debit card transactions Online payments Stored-value cards Smart cards

Introduction to Business © Thomson South-Western Chapter 17 Slide 20 BANKING IN THE FUTURE Financial services combined with wireless technology Personalized systems for obtaining, transferring, and using funds

Introduction to Business © Thomson South-Western Chapter 17 Slide 21 >> C H E C K P O I N T What are common electronic banking services?

Introduction to Business © Thomson South-Western Chapter 17 Slide 22 LESSON 17-3 Checks and Payment Methods Goals Describe three main types of endorsements. Describe proper check-writing procedures. Explain the bank reconciliation process. Identify other payment methods.

Introduction to Business © Thomson South-Western Chapter 17 Slide 23 Key Terms endorsement check register stop payment order bank statement bank reconciliation outstanding checks

Introduction to Business © Thomson South-Western Chapter 17 Slide 24 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

Introduction to Business © Thomson South-Western Chapter 17 Slide 25 THE FIRST DEPOSIT Signature card Joint account Deposit slip

Introduction to Business © Thomson South-Western Chapter 17 Slide 26 SIGNATURE CARD

Introduction to Business © Thomson South-Western Chapter 17 Slide 27 TYPES OF ENDORSEMENTS Blank endorsement Full endorsement Restrictive endorsement Special endorsement Two signatures required Restrictive endorsement

Introduction to Business © Thomson South-Western Chapter 17 Slide 28 SAMPLE ENDORSEMENTS

Introduction to Business © Thomson South-Western Chapter 17 Slide 29 >> C H E C K P O I N T What are the three types of endorsements?

Introduction to Business © Thomson South-Western Chapter 17 Slide 30 USING A CHECKING ACCOUNT Check-writing procedures Elements of a check The check register Writing a check Proper check writing Stopping payment

Introduction to Business © Thomson South-Western Chapter 17 Slide 31 PARTS OF A CHECK

Introduction to Business © Thomson South-Western Chapter 17 Slide 32 >> C H E C K P O I N T What is the purpose of a check register?

Introduction to Business © Thomson South-Western Chapter 17 Slide 33 THE RECONCILIATION PROCESS Bank statement information Determine checks paid Find differences Calculate adjusted balance

Introduction to Business © Thomson South-Western Chapter 17 Slide 34 MONTHLY ACCOUNT STATEMENT

Introduction to Business © Thomson South-Western Chapter 17 Slide 35 RECONCILIATION FORM

Introduction to Business © Thomson South-Western Chapter 17 Slide 36 >> C H E C K P O I N T What are causes of differences between the bank statement balance and a person’s check register?

Introduction to Business © Thomson South-Western Chapter 17 Slide 37 OTHER TYPES OF PAYMENTS Certified checks Cashier’s checks Traveler’s checks Money orders

Introduction to Business © Thomson South-Western Chapter 17 Slide 38 CERTIFIED CHECKS Personal check for which a bank has guaranteed payment Certification stamped on face Signed or initialed by a bank officer

Introduction to Business © Thomson South-Western Chapter 17 Slide 39 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

Introduction to Business © Thomson South-Western Chapter 17 Slide 40 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

Introduction to Business © Thomson South-Western Chapter 17 Slide 41 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

Introduction to Business © Thomson South-Western Chapter 17 Slide 42 >> C H E C K P O I N T How does a certified check differ from a cashier’s check?