Financial Services and Electronic Banking

Financial Services and Electronic Banking
Chapter 17-2

Types of Financial Service Savings Services Payment Services Lending Services Electronic Banking Storage of Valuables Investment Advise Management of Trust

Savings Services One of the main services that financial institutions offer is accepting money from customers for safekeeping.

Payment Services The ability to transfer money to others is necessary for daily business activities. Types of payment services include: Checking Accounts Debit Cards Online Payments Automatic Withdrawals

Lending Services Most people, businesses, and government borrow money at some time. Banks make loans and charge interest. Types of loans include: Auto loans Business loans Mortgage Credit cards

Electronic Banking Electronic funds transfer (EFT) refers to the use of computers and other technology for the banking activities. EFTs include: Automated teller machines (ATM) Direct Deposit Automatic bill payment Point of sale transactions Transfer funds View account history and activity Debit card retail purchases Web banking to apply for loans, manage investments, and other services

Storage of Valuables Safe-deposit boxes are for storage of valuables. Safe place to keep things like jewelry, rare coins, investment certificates, and important papers. Only you may open the safe-deposit box You rent safe-deposit boxes by the year and come in a variety of sizes.

Investment Advise Many financial institutions offer financial advice and investment services. This involves savings that are put to work to earn more money. Types of investments include government bonds, stocks, and mutual funds.

Management of Trust Many banks manage investments on behalf of customers. The money or property that is turned over for the bank to manage is said to be held in trust. Trust are especially useful for very young people and for some elderly people. http://www.businessinsider.com/7-celebs-whose-parents-decimated-their-fortunes-2014-4

Regular Checking Account Regular Checking Accounts – appropriate if you write a lot of checks each month. Service charge is a fee a bank charges for handling a checking account. Most banks do NOT charge a service fee for regular checking accounts as long as you keep a certain balance.

Interest Earning Checking Account This is a checking account that earns interest. Requires a higher monthly balance than regular checking accounts. Interest rates on checking accounts are quite low.

Special Checking Accounts Usually charge each check written. Only use if write few checks a month. Primarily for business use only. AKA “Activity Account”

Electronic Banking Each day, the use of electronic banking services grows. You can do your banking from an ATM, home computer, or cell phone. ATM – allows many banking services Debit cards are used for ATM transactions Debit vs. Credit cards: With a debit card issued by your bank, you are using money that is in your account. With a credit card, you are borrowing from the bank and paying later.

Financial Services and Electronic Banking