1. Depository Institution Discovery

2. Depository Institution
Business that offers and sells financial services to people
Checking Accounts
Savings Tools
Assist people with daily financial tasks

3. Types of Depository Institutions
Credit Union
Savings and Loan Institution
Commercial Bank

4. Commercial Bank The most popular type of depository institution
Lend, issue, borrow and protect customer’s money
Offer a better way to track and manage money
Provide records of money deposited, or put into an account, and money withdrawn, or taken out of an account

5. Checking Account Very common type of account
Offers safety and convenience
Most do not pay interest, or additional money earned
Frequent withdrawals and deposits are expected

6. Withdrawing Money Checks Debit Card
Legal documents that function like cash
If sufficient funds are not in the account, checks can “bounce”
Fee
Harm future opportunities for credit
Debit Card
Electronically connected to an account
When purchases are made, money is automatically withdrawn from the designated account
A PIN (Personal Identification Number) is required to confirm the user is authorized to access the account

7. Check 21 Check Clearing for the 21st Century Act
Money is automatically withdrawn from an account as soon as a check is written
Makes it difficult to “bounce checks”
An individual must have money in his/her account to make a purchase

8. Opening a Checking Account
Read through the contract from the bank
Complete a Signature Authorization Card
Printed name
Signature
Social Security number
Telephone number
Address
Date of birth
Make an initial deposit

9. Interest Earning Checking Account
Checking account that pays a small amount of interest
Usually require a minimum balance, which is the smallest amount of money that must be kept in the account in order to keep paying interest

10. Savings Tools Savings Account Money Market Deposit Account
Certificate of Deposit (CD)

11. Savings Account Keeps money safe until the owner needs it
Emergencies
Purchase expensive items
Money can be deposited and withdrawn an unlimited number of times each month
No check writing privileges
A debit card may be used with certain accounts
Money has the opportunity to earn more interest than if it was in an interest earning checking account

12. Money Market Deposit Account
Pays a higher interest rate than a regular savings account
Requires more money to open than a regular savings account
Money can be withdrawn only a limited number of times each month with checks or a debit card

13. Certificate of Deposit
Pays interest on a lump sum of money
Once money is placed in a CD, it must remain there for a specific time period
If withdrawn early, a penalty fee is charged
Interest rate is higher than a savings account and Money Market Deposit account
The rate of interest money earns in a CD increases as the length of time the money is required to stay in the CD increases

14. Commercial Banks Safety
Storing large amounts of money in a commercial bank is safer than at home
Fire, burglary, or other type of disaster
Federal Deposit Insurance Corporation (FDIC)
Protects money in bank accounts from loss

15. Quick Review Depository Institution Checking Account Savings Tools
Savings Account
Money Market Deposit Account
Certificate of Deposit (CD)
FDIC