1. Banking
Chapter 5

2. Banks? Why do we need banks? Payment Savings Loans Payment Services

3. What is a bank?
An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.

4. When Did banks start in America?
1791
Soon after America declared independence congress established the nation’s first central bank with eight branches.
Today we have over 11,ooo banks, 12,000 credit Unions, 2,000 savings and loan institutions

5. Your choice of financial services will depend on your daily cash needs and your savings goals

6. Daily Cash Needs How do you Pay? Buying lunch Going to the movies
Filling the car with gas
Paying for activities
shopping
How do you Pay?
Cash
Security
Credit Card
interest
Debit Card
Some banks charge fee
Go to ATM
May Charge fee

7. Sources of Quick Cash
You need money now
Savings
Borrow Money

8. Financial Services Savings—Liquidity???
Payment Services—most common is a checking account
Borrowing—Loans, credit, mortgages
Other—stock and bonds, insurance protection, income tax assistance, financial planning services

9. Electronic Banking Direct Deposit Automatic Payments
Automated Teller Machines
Plastic Payments
Debit Cards
Stored Value Cards

10. FDIC Federal Deposit Insurance Corporation (FDIC) Great Depression
Protects up to 100,000 per account

11. Types of financial Institutions
Deposit Institutions
Commercial Banks
Savings and Loan Associations
Mutual Savings Banks
Credit Unions
Non-Deposit Institutions
Life Insurance Companies
Investment Companies
Finance Companies
Mortgage Companies

12. Comparing financial institutions
Where can you get the highest rate of interest on your savings?
Where can you obtain a checking account with low (or no) fees?
Will you be able to borrow money from the institution when you need it?
Do you need an institution that offers financial advice?
Is the institution FDIC or SAIF insured?
Does the institution have convenient locations?
Does it have online banking services?
Does it have any special banking services that you might need?