1. Numbers In the U.S. Over 11,000 banks
2,000 savings and loans associations
12,000 credit unions
What do all these institutions do with your money?

2. Personal Finance
Chapter 5
Banking

3. Objectives Identify available financial services
Distinguish between types of financial institutions

4. What’s Your Financial ID?
A bank CD is a
Cash Deposit
Compact Disc
Certificate of Deposit
Compact Deposit

5. What’s Your Financial ID?
To borrow money from the bank, you need to ask for a
Loan
Money Market Account
Safe-Deposit Box
Transfer

6. What’s Your Financial ID?
You can store valuables in the bank’s vault if you have
Permission
A Money Market Account
Safe-Deposit Box
An ATM Card

7. What’s Your Financial ID?
You keep money in a bank account to
Keep it safe
Earn interest
Learn financial responsibility
All of the above

8. What’s Your Financial ID?
The total amount of money in your bank account is called
The statement
The interest
The balance
Peanuts

9. What’s Your Financial ID?
The amount of money your bank account earns depends on the
Type of account you have
Balance in your account
Interest rate
All of the above

10. What’s Your Financial ID?
When you make a purchase and have the funds taken directly from your checking account, you use a
Credit card
Note from your mother
Debit card
Driver’s License

11. What’s Your Financial ID?
To set up a savings plan that requires a low minimum balance and allows you to withdraw funds at any time, you would
Buy a CD
Buy a U.S. Savings Bond
Put the money under your mattress
Open a Savings Account

12. Types of Services Savings Borrow: ATM’s Loans CD’s Credit Cards
Money Market Accounts
Checking Account
Borrow:
Loans
Credit Cards
Other:
Insurance
Stocks/Bonds
Mutual Funds
Taxes
Financial Planning

13. Electronic Banking Direct Deposit: Automatically put into your account
What’s the advantage of Direct Deposit?
Automatic Payments: Bank withdraws and pays your bill automatically
Advantages/Disadvantages?

14. More Electronics
Automated Teller Machines: Withdraw cash from your accounts
You can also transfer and deposit
Debit Card: Withdraw money and pay for purchases from savings or checking accounts

15. Point-of-Sale Transaction
The use of a debit card to purchase an item or a service at a retail store, in a restaurant, or elsewhere

16. Opportunity Costs of Financial Services
Is a higher interest rate on a CD worth giving up liquidity?
Would you trade the convenience of getting cash from the ATM near your work or school for a lower ATM fee?
Is it worth opening a checking account that has no fees, but doesn’t earn interest if you keep a minimum balance

17. Question
What other financial institutions do people use, other than traditional banks?

18. Deposit-Type Institutions
Commercial Bank:
For Profit
Full range of services
Savings & Loans: Traditionally specialized in savings accounts and mortgages.

19. More Deposit-Type
Credit Union: Non-Profit that is owned by its members and organized for their benefit.
Members usually have a common bond: job or union

20. Non deposit-Types Life Insurance Companies:
Financial security for your dependents.
Investment Planning
Investment Companies: Buy stocks, bonds, and other securities.
Mortgage Companies: Specialize in loans for homes

21. Banking Activity In groups of 2 or 3:
Discuss 5 specific services that a bank will provide
How/Why would you use the services?
3 Column Table:
1. Service, 2. Description, 3. When/Why you would use

22. Complete
Research:
Credit Unions
Life Insurance Companies
Investments Companies
Mortgage Companies
List services each institution provides and explain why you would choose each institution over a local bank