Unit 3: Financial Institutions & Banking Systems

1. Dollars & Sense Unit 3: Financial Institutions & Banking Systems Part 2: Accounts

2. Accounts Offered by Banks & Credit Unions • Savings • Certificates of Deposits (CD’s) • Money Market • Checking

3. Section 2 Savings Plans and Payment Methods Types of Savings Plans

4. Section 2 Savings Plans and Payment Methods Types of Savings Plans Three Limitations of a Certificate of Deposit (CD) Your money must stay in the account for one month to five or more years. You must pay a penalty for withdrawing your money early. There is usually a minimum deposit amount.

5. Section 2 Savings Plans and Payment Methods Types of Savings Plans money market account a savings account that requires a minimum balance and earns interest that varies from month to month

6. Section 2 Savings Plans and Payment Methods Types of Checking Accounts • Checking: • A transactional bank account. • Easy access to your money Regular Checking Accounts Interest-Earning Accounts

7. Advantages of a Checking Account • Convenience • Safety • Proof of Payment • Record of Finances

8. Advantages of a Checking Account 1. Convenience • Write checks at home • Pay bills by mail • Debit Card • Online payments • Swipe card and money is taken directly out of checking account • Need Cash? = ATM

9. Advantages of a Checking Account 2. Safety • Money on hand involves risk of losing it by fire, theft, or carelessness • Less temptation to spend money • Check can only be cashed by person or business to whom it is payable

10. Advantages of a Checking Account 2. Safety • FDIC & NCUA • Most banks & credit unions are members • FDIC insures deposits up to $250,000

11. Advantages of a Checking Account 3. Proof of Payment • Check is legal proof of your finances • Payment to others • Confirm with bank • All checks are now electronically imaged

12. Advantages of a Checking Account 4. Record of Finances • Check is legal proof of your finances • How much are you spending • Where your money is going • How much you have remaining

13. Types of Checking Accounts - Overview • Differ in what they offer to customers • Annual Fee • Minimum Balance • Fee for each check written (Service Charge) • Fee for ATM use (Service Charge) • Interest earning accounts

14. Types of Checking Accounts • Regular Checking Accounts • No service charges • Low Minimum Account Balance • Typically No Interest on Account • Student Checking Accounts • Senior Checking Accounts

15. Types of Checking Accounts • Interest Checking Accounts • Most require Minimum Monthly Balance • Most $500 or more • Service Charges/Fees • May require a specific # of checks written or debit card transactions • May require direct deposit • Monthly Service Charge • Pays a Low Rate of Interest on Account

16. Your Task • Complete and email the Bank Account Comparison Worksheet