1. Chapter 10
Banking

2. 10.1 Comparing Financial Institutions
Bank = an institution where you can deposit money
Interest = fee paid for using someone else’s money for a certain period of time
Banks offer
Checking, savings, safe deposit boxes, financial services

3. Types of Financial Institutions
Commercial Banks = owned by shareholders and operates on a profit
Savings and Loans = owned by the depositors and profits held in reserve
Credit Union = nonprofit, owned by its members and have a common bond
FDIC – Federal Depository Insurance Company

4. 10-2 Banking Electronically
Electronic Funds Transfer (EFT) = movement of funds by electronic means
ATM (Automated teller machine) = gives you electronic access to your money
PIN = Personal ID Number= security for your account

5. Point-of-sale-transaction = paying for an item by electronic means
Debit Card = allows the user to subtract money from bank account in order to obtain cash or make a purchase
Automated Services…
Direct deposit, automated transfers between accounts, loan payments
Online banking

6. 10-3 Managing a Checking Account
Payee- person who the check is made
Cancelled Check = has cleared the system and has been paid
Overdraft= lack of sufficient funds

7. Advantages of Checks Choosing a Checking Account Minimum Balance Fees
Transaction limits
Interest

8. Using a Checking Account
Making a Deposit
Endorsing a Check
Endorsement = signature on the back saying it can be cashed.
Blank – signature
Special – transfer money to someone else
Restrictive – limits the check – deposit only

9. Recording Transaction = Check Register.
Writing a Check = date, payee, amount in dollars, words, sign it, memo,
Receiving Your Bank Statement = by mail or electronically
Reconciling

10. 10-4 Using other Payment Methods
Certified Checks = check from personal account, that has been stamped for guarantee payment

11. Cashiers Check = check issued by the bank

12. Money order= get them at bank or post office, safe for travel
Travelers Checks
Wire Transfer
Prepaid Cards
Online Payment Services