What are banks/financial

institutions?

Go-betweens between
savers and borrowers

savers ______ money in bank

bank lends savers money to
__________
borrowers repay the loan plus
__________ as price of using
others savings
bank pays interest, provides
services, and charges ____ to
savers for allowing them to
loan out their money

savers

$
bank

$
borrowers

Kinds of Financial Institutions

Commercial Banks
+ Most services, convenience
-- Lowest interest rates, highest fees and loan rates

Credit unions, savings and loans,

savings banks
+ Member-owned - higher interest rates, lower fees and
loan rates
-- Limited access

Internet banks
+ Often higher interest rates, lower fees
-- Fewer services, no ATMs

Check-cashing outlets
-- AVOID charge high fees (sometimes 2 or 3 percent)
just to have a paycheck or government check cashed.

Benefits of checking accounts

_________________: Avoid carrying lots of cash

If your checkbook is lost or stolen, just
___________________ and open a new one so that
nobody can use your old checks.
No fees for depositing or cashing checks
________________
Withdraw cash
Make purchases with ________________
Make automatic payments
_______ most FDIC-insured up to $250,000
Monthly statements, which can be used to prove
youve ____________________________________, if needed.
_________________
direct deposit, ATMs, EFT (electronic funds transfer)
Transfer funds between ___________ and savings
accounts easily and quickly

Choosing a checking account

___________________

availability of ATMs?
branch offices nearby? many?
hours of operation?

__________________

fees for using non-bank ATMs?

monthly fees?
fee charged for falling below
necessary balance?
per check fees?
check printing fees?
bounced check fees?
teller fees?
fees for use of debit card?

Look for free checking

accounts

____________________

special features

minimum balance?
deposit insurance?
holding period for deposited checks?
direct deposit?
automatic payments?
overdraft protection?
online banking?
discounts or free checking for
students, seniors, or employees of
certain companies?

other charges

overdraft charge?
stop-payment fees?
certified check fees?

Types of Savings Accounts

Savings

Account

Access your money at any time.

Earn interest.
Move money easily from one account to another.
Savings insured by the FDIC up to $250,000.

____________________

Account

Earn interest.
Pay no fees if you maintain a minimum balance.
May offer check-writing services.
Savings insured by the FDIC up to $250,000.

_______________________________

(CD)

Earn interest during the term (three months, six months, etc.).
Receive the principal and interest at the end of the term.
Savings insured by the FDIC up to $250,000.
Must leave the deposit in the account for the entire term to avoid an early
withdrawal penalty.