1 / 16

Depository Institutions

Depository Institutions. Take Charge of Your Finances 1.7.3. Depository Institutions. Depository Institutions – businesses which offer multiple services in banking and finance These institutions include: Banks Savings and Loans Credit Unions

adonis
Download Presentation

Depository Institutions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Depository Institutions Take Charge of Your Finances 1.7.3

  2. Depository Institutions • Depository Institutions – businesses which offer multiple services in banking and finance • These institutions include: • Banks • Savings and Loans • Credit Unions • Institutions are regulated by various state and federal agencies

  3. Depository Institutions Why consumers may not use them: Why consumers may use them: To keep money safe To receive the advantages of interest earning accounts To have the opportunity to receive lower cost loan • Fees are too high • Minimum balances required are too high • They wish to keep their financial information private

  4. Federal Reserve Bank • Federal Reserve Bank – is part of the central banking system in the United States • Services provided to depository institutions include: • Collecting checks • Electronically transferring funds • Distributing and receiving cash and coin

  5. Life of a Deposited Check • Look closely at steps 2-4 to see how the Federal Reserve bank plays an integral role in how a check transaction works

  6. Depository Institutions • Commercial Bank • Credit Union • Savings and Loan Association

  7. Commercial Bank • Commercial Banks • Usually the largest depository institutions • Considered full-service depository institutions because offer a wide variety of services and products • Available to a variety of consumers • Examples – Wells Fargo, US Bank, Chase Bank

  8. Credit Union • Credit Unions • Non-profit cooperative depository institution • Owned by members who share a common bond • Example – Vantage Credit Union

  9. Savings and Loan Association (S&Ls) • Savings and Loan Association • Focus on providing loans and mortgages • Customers must have a savings account with them

  10. Types of Insurance • Federal Deposit Insurance Corporation (FDIC) • Federal government agency which protects depository institution accounts • Insures commercial banks and savings and loan associations • National Credit Union Administration (NCUA) • Provides insurance for credit unions • Insurance protection • Each depositor is insured up to $250,000 • The same protection is available from both FDIC and NCUA

  11. Depository Institution Services

  12. Common Services Offered • Checking account (also known as a Share Draft Account at a credit union) • Savings account(also known as a Share Account at a credit union) • Stock • Ownership, represented by shares in a corporation • Certificate of deposit (also known as a Share Certificate account at a credit union) • Money market account • Bond

  13. Interest Bearing Accounts • Credit card • A card used to make a purchase now and repay later • If the balance is paid before the grace period ends, interest is not added • If the balance is paid after the grace period, the payment of interest is required • Loan • Money borrowed and paid back with interest • Mortgage – loan for a home • Personal – interest rates vary depending upon type of loan • Loan types can include vehicle, school, etc.

  14. Additional Services Which May Be Offered • Safe-deposit box • A secured box in a bank to be used for valuable and important personal items • Financial counseling • Information and advice is given to customers to help make financial decisions • Mutual Fund • A group of stocks, bonds, and other investments managed by a brokerage firm.

  15. Conclusion& Review

  16. Review • Money management is part of everyday life! • Depository institutions offer multiple services – shop around for the one which best fits your needs! • Ensure the depository institution is insured by the FDIC or NCUA • Comparison shop the financial services and interest rates offered before choosing a depository institution

More Related