1. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at The University of Arizona Financial Institutions Information on Financial Institutions & Services

2. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Financial Institutions Outline Introduction Definitions Financial Institutions & Services Available Benefits & Advantages Financial Services Review

3. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Introduction Why should a person learn about money management?  It’s a daily routine.  Everyone is involved with money.  Education saves time and money.  To become a millionaire!

4. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Definitions

5. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Financial Institutions Definition – businesses which offer multiple services in banking and finance Services may include savings & checking accounts, loans, investments, and financial counseling

6. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Depository Institutions Usually referred to as banks Follow state and federal regulations Offer banking services and loans Serves both individuals and businesses Examples – commercial banks, savings & loan associations, and credit unions

7. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Insurance for Financial Institutions Federal Deposit Insurance Corporation (FDIC)  Federal government agency which protects bank accounts  Each depositor is insured up to $100,000 Savings Association Insurance Fund (SAIF)  A branch of the FDIC  Provide insurance for Savings & Loan Associations  Same insurance level as the FDIC

8. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Insurance for Financial Institutions continued National Credit Union Administration (NCUA)  Same safety as deposits insured by the FDIC  Provides insurance for Credit Unions A sign will be posted if a bank is insured  OR may say “Backed by the Full Faith and Credit of the United States Government” which insures each depositor up to $100,000

9. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Financial Institutions Commercial Bank Savings and Loan Association Credit Union Brokerage Firm

10. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Commercial Bank Full-service financial institutions Wide variety of services and products Operate under state and federal laws Usually the largest financial institutions FDIC insured Examples – Wells Fargo, US Bank, First Interstate Bank

11. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Commercial Bank Services Checking Accounts  They are the only financial institution allowed to offer non-interest paying checking accounts Savings Accounts Safe-Deposit Boxes Credit cards Certificate of Deposit (CDs) Financial Services Investments Loans Mortgages

12. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Savings and Loan Association (S&Ls) Focuses on providing loans and mortgages to customers which hold a savings account Generally pay a higher interest rate than commercial banks Offer interest-earning checking accounts SAIF insured Examples – American Federal Savings Bank, Pioneer Federal Savings & Loan

13. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona S&L Services Checking Accounts Savings Accounts Certificate of Deposit (CDs) Retirement Plan Accounts Financial Counseling Investments Loans Mortgages

14. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Credit Union Non-profit cooperative financial institution, member owned Members may have a common bond such as same employer, union, location, etc. Usually charge lower fees and loan rates and offer higher interest rates May offer free financial counseling NCUA insured Examples – Rocky Mountain Credit Union, Montana Federal Credit Union

15. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Credit Union Services Share Draft Accounts (checking) Share Accounts (savings) Share Certificate Accounts (CDs) Safe-Deposit Box Credit Card Financial Counseling Investment Loan Mortgage Retirement Plan Account

16. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Brokerage Firm Relatively new to the marketplace Licensed institutions Offer money management plans for investing Provide financial assistance and advice Monthly statements provided to track account activity Examples – DA Davidson & Co., Merrill Lynch

17. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Brokerage Firm Services Investments Bonds Stocks Mutual Funds Financial Counseling Real Estate Investment Retirement Plan Accounts **Customers can move money between accounts easily

18. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Benefits & Advantages to using Financial Institutions

19. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Benefits of Financial Institutions Convenience  Quick and easy access to money  Different ways to access money Teller’s window, drive-up window, automated teller machine (ATM), and electronic banking Cost savings  Less expensive to purchase money orders and to cash checks Other businesses may charge to cash checks  Having a checking account instead of buying money orders saves money

20. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Benefits continued Safety  Protection from fire, theft, & loss Security  Money is protected by the federal government in federally insured institutions  Up to $100,000 for each depositor  Signs are displayed if institutions are insured stating: FDIC, NCUA, or Backed by the Full Faith and Credit of the United States Government Not all are insured – look for the sign and ask!

21. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Advantages Using one financial institution may include these advantages:  Simplicity – having all accounts at one place can simplify banking  Relationship – establishing relationships can be beneficial when applying for loans Lower interest rates on loans may be offered to loyal customers!

22. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Shop around for the best service, rates, products, and locations before choosing a financial institution!!! Remember

23. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Financial Institution Services

24. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Definition of Services Bonds  Lending money to an organization as an investment, an “IOU”  Purchased at a fixed interest rate and period of time Certificate of Deposit (CD)  An insured interest earning savings instrument with restricted access to the funds.  An investment with no risks and no fees

25. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Services continued Checking Account  Paper checks or debit cards are used to withdraw money deposited into the account to pay for items  May be interest or non-interest bearing Credit Card  A plastic card used to make a purchase now to be repaid later usually with interest to the credit card company

26. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Services continued Financial Counseling  Information and advice given to customers to help them make decisions about financial issues Investment  A commitment of money to achieve long-term financial goals  Many different types are available Loan  Borrowed money consumers apply for at financial institutions  Paid back at various interest rates in payments

27. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Services continued Mortgage  A long-term loan to purchase real estate such as a house Mutual Fund  Groups of stocks, bonds, and other investments managed by an investment firm Real Estate Investment  Purchasing real estate as an investment  May buy a lower priced house, make improvements, and sell at a higher price

28. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Services continued Retirement Plan Account  Plans to set aside money for retirement  Money is tax-deferred until withdrawn  May be offered through an employer or set up through a financial institution Safe-Deposit Box  A secured box in a bank to be used for valuable and important personal items  Items are safe from theft and fire

29. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Services continued Savings Account  Money is deposited into an account to earn interest  Funds are easily accessible and safe Share Account  A savings account at a Credit Union Share Certificate Account  A certificate of deposit at a Credit Union Share Draft Account  A checking account at a Credit Union

30. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Services continued Stock  Ownership in corporation  Represented by shares

31. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Review

32. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Review Money management is part of everyday life! Financial institutions offer multiple services – shop around for the one which best fits your needs! Check to see if the financial institution is insured by the FDIC, SAIF, or the NCUA. Learn about the financial services before choosing one.  Example – checking, savings, investments, etc.

33. 1.7.3.G1 © Family Economics & Financial Education – Revised October 2004 – Financial Institutions Unit – Financial Institutions Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona The End