1. Depository Institution Essentials

2. What is a Depository Institution?
Depository institutions are businesses which offer multiple services in banking and finance
Commercial
Banks
Credit Unions
These are the two most common types of depository institutions.
What is the name of a depository institution in your community? ?

3. Types of Depository Institutions
Commercial Bank
Credit Union
Description
Full service institutions- may offer all of the services provided by depository institutions
Non-profit cooperative institution that is owned by the members and often provides more customer friendly interest rates than commercial banks
Used by?
Open to anyone who wants to utilize a depository institution
Members must possess a common bond
Type of Insurance Coverage
Federal Deposit Insurance Corporation (FDIC)
National Credit Union Administration (NCUA)
Insurance Protects
Will restore the lost funds in savings tool accounts up to $250,000 per account

4. Choosing a Depository Institution
All depository institutions differ from one another in regards to locations, services offered, interest rates offered, and specific features provided
Choose the correct depository institution to meet individual needs
Individuals may choose to use one depository institution or multiple depository institutions
Individuals may have more than one type of account at the same depository institution

5. Choose a depository institution that will help meet financial goals
A goal is defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish
Financial goals are specific objectives to be accomplished through financial planning

6. Advantages and Disadvantages of Using a Depository Institution
Do you use a depository institution? ?
Assists in managing finances and reaching financial goals
Protection from loss (insurance)
Opportunity to earn interest
May have to pay fees
May have required minimum balances
Sharing financial information

7. Services Offered by Depository Institutions
Individual depository institutions may offer all or some of these services.
Services Offered by Depository Institutions
Savings Tools
Investment Tools
Credit
Safe-Deposit Boxes
Financial Counseling

8. Services Many services offered by depository
institutions are interest bearing
Interest bearing accounts either charge the consumer interest for money borrowed or earn interest for the consumer
Interest rate - percentage rate used annually to calculate the total interest either gained or lost from an account
Interest - the price of money
Look for high interest rates on interest-earning accounts and low interest rates when borrowing money.

9. Savings Tools
Savings tools are secure, easily accessible accounts that assist in money management
May be interest or non-interest earning
As long as the depository institution is insured, savings tools are insured against lost
Checking Accounts
Savings Accounts
Money Market Deposit Accounts
Certificate of Deposits (CDs)

10. Savings Tools Checking Account Savings Account
Used to transfer funds deposited into the account to make a cash purchase
Interest or non-interest earning
Hold money not spent on current consumption
Interest earning
At a credit union a checking account is known as a share draft account and a savings account is known as a share account.

11. Savings Tools Money Market Deposit Account Certificate of Deposit
Offers higher interest rates than a savings account
Have a minimum balance requirement
Limited to a certain number of transactions each month
Interest earning
Restricted access to the funds

12. Investment Tools Stocks Bonds
Earn higher interest rates than savings tools but the funds are not as easily accessible
Not insured against loss
Stocks
Bonds

13. ? Credit Loans Credit Cards
Credit is when goods, services, or money is received in exchange for a promise to pay a definite sum of money at a future date
Consumer is charged interest
Loans ?
What might a person need a loan to purchase?
Credit Cards

14. ? Other Services Safe-Deposit Boxes Financial Counseling
A secured box to store valuable and important personal items
Information and advice is given to customers to help them make financial decisions
What services offered by depository institutions would you use? ?

15. Depository Institution Features
Electronic Banking (E-Banking)
Made possible by electronic funds transfers (EFTs)- utilize computer networks to transfer funds electronically (rather than by check or cash) among depository institution accounts
Adds to the convenience and money management tools of certain depository institution services
Allows 24-hour access to move money electronically in a fast and paperless way

16. Advantages and Disadvantages of E-Banking
24-hour access
Fast transactions
Paperless transactions
Convenience
Worldwide access
Increased risk of fraud and identity theft if consumers are not careful with their personal information
Regulation E was established to combat the security issues of electronic banking
Covers all EFT’s including transfers occurring through an electronic terminal, computer, telephone, or magnetic tape

17. E-Banking Safety
To take full advantage of
e-banking:
Keep personal security as your first priority
Know how to protect your personal information
If a consumer feels his or her funds have been accessed without permission
Report the problem immediately to the depository institution involved

18. Direct Deposit & Direct Payment
Types of E-Banking
Will vary among depository institutions
Will vary between services and accounts at the same depository institution
Direct Deposit & Direct Payment
Debit
Cards
Online
Banking
ATM’s

19. Debit Cards
Plastic card which looks like a credit card but is electronically connected to the cardholder’s depository institution account
Functions like a check but electronically
Usually used for savings tools, especially checking, savings, and money market deposit accounts
Require using a personal identification number (PIN) or signature to perform transactions

20. Debit Card Safety Tips
Keep receipts and check statements carefully and frequently for any unauthorized or incorrect charges
Sign the back of the card in the signature box with “Please see ID” in addition to a signature
Do not make a PIN number one that reveals a birth date, social security number, address, or telephone number
Keep PIN numbers safe
If a debit card is lost, report it to the depository institution as soon as possible

21. Fraudulent Debit Card Charges
If reported within 2 days, the consumer is held responsible for no more than $50 in fraudulent charges
If reported within 60 days, the consumer is held responsible for no more than $500 in fraudulent charges
After 60 days, the consumer is held liable for no more than the amount of unauthorized transfers

22. Automated Teller Machines (ATMs)
Electronic computer terminals which offer automated, computerized banking
Usually used for savings tools, especially checking and savings accounts
Accessed with ATM and/or debit cards
Allow customers to make deposits, withdrawal cash, make account transfers, and check account balances
May be offered in many different locations or few (if any) locations

23. Direct Deposit & Direct Payment
Direct Payments
Allows paychecks and benefit checks to be directly deposited into a specified depository institution account (savings or investment tools)
Authorize bills to be paid electronically by a specified depository institution account (savings or investment tools)

24. Online banking is also known as internet banking.
Complete transactions with a depository institution from a personal computer (PC) or through other wireless technology (personal digital assistant (PDA) or cellular phone)
May access account information and statements, transfer funds, manage and pay bills, and apply for loans and mortgages
May be used for savings tools, investment tools, and credit accounts

25. Online Banking Safety Tips
The Uniform Resource Locator (URL) should end with an “s,” Or, have a closed pad lock in the bottom right hand corner of the website
Do not authorize online bill paying through an account, go directly to the company’s website
Passwords should be combinations of letters, numbers, and characters
Change passwords at least once per month
Make sure to log out from online bill paying sites immediately
Never enter an online banking site on a wireless network away from home; use a wireless network at home only if it is thoroughly protected
What features offered by depository institutions would you use? ?

26. Researching Depository Institutions
What services does the depository institution offer? What features of these services are offered?
Does the depository institution offer high interest rates on interest-earning accounts and low interest rates on credit accounts?
Where is the depository institution located?
Is the depository institution insured against loss?

27. Summary What is a depository institution?
How do depository institutions differ from one another?
How should an individual choose a depository institution?
Businesses which offer multiple services in banking and finance
Type
Services offered
Interest rates offered
Location
Features offered
Research depository institutions and choose the one(s) that best fits needs and helps reach personal financial goals

28. Summary
Depository institutions offer many services to customers. What are these services?
Depository institutions offer features to their services. What are these features?
Savings tools
Credit
Safe-deposit boxes
Investment tools
Financial counseling
Electronic banking-
Debit cards
ATMs
Direct deposit
Direct payment
Online banking
Find the depository institution that best fits your
needs and helps you reach financial goals!