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Cash Or Liquid Asset Management

Cash Or Liquid Asset Management. Financial Institutions. Deposit-Type Financial Institutions Commercial Banks Savings and Loan Associations Savings Banks Credit Unions Nondeposit -Type Financial Institutions Mutual Funds Stockbrockerage Firms. Commercial Banks.

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Cash Or Liquid Asset Management

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  1. Cash Or Liquid Asset Management

  2. Financial Institutions • Deposit-Type Financial Institutions • Commercial Banks • Savings and Loan Associations • Savings Banks • Credit Unions • Nondeposit-Type Financial Institutions • Mutual Funds • Stockbrockerage Firms

  3. Commercial Banks • Offer widest variety of financial services • Checking and savings accounts, credit cards, safety deposit boxes, financial consulting, and lending • Dominate in terms of dollar value of the assets they hold • Have more branch offices or locations than any other type of financial institution • Many offer online banking services

  4. Commercial Banks • Citibank, NationsBank, Regions, Bank of America, US Bank

  5. Community Banks • Are similar to commercial banks but are located in a particular area or region • Less locations and not as many services offered • Many pride themselves on customer service • “Small-town” • CFSB, Heritage, Murray Bank, Citizens Deposit, 1st Kentucky

  6. Credit Union • Not-for-profit cooperatives • Established by churches, univerisities, trade unions, and corporations • Only open to members of that organization • Offer a wide range of competitive financial services • More efficient, smaller scale • Pay higher interest rates and have lower fees and minimum balances

  7. Credit Union • Murray State Credit Union, Navy Federal Credit Union, General Tire Credit Union

  8. Nondeposit-type Financial Institutions • Mutual Fund- An investment fund that raises funds from investors, pools the money, and invests it in stocks, bonds, and other investments. • Investors own shares proportionate to the amount of their investment level.

  9. Cash Management Alternatives • Checking Accounts • Saving Accounts • Money Market Deposit Accounts • Certificates of Deposit • Money Market Mutual Funds • U.S. Treasury Bills, or T-Bills • U.S. Series EE Bonds

  10. Checking Account • Demand Deposit- A type of checking account on which no interest is paid • NOW (Negotiable Order of Withdrawal) Account- A checking account on which you earn interest on your balance • Minimum balance • Monthly Fees

  11. Savings Account • Time deposit • May be required to keep money deposited for a minimum time period • A deposit account that pays interest • Make withdrawals at the bank with a withdrawal slip or with an ATM card

  12. Money Market Deposit Accounts • Alternative to savings account offered by commercial banks • Rate of interest varies with the current market rate of interest • Interest rate is higher that regular savings account • Offers limited check writing service • Requires higher minimum balance than regular savings ($1000 +)

  13. Certificate of Deposit • Pays a fixed rate of interest while keeping your funds on deposit for a set period of time • 30 days to several years • The longer time period funds are deposited, the higher rate of interest • Interest rate stays fixed for the life of the CD • Early withdrawal penalties

  14. Money Market Mutual Funds • Mutual funds that invest in short-term notes of very high denomination • Earn a higher rate of return • Limited check writing privileges

  15. U.S. Treasury Bills (T Bills) • Short term notes of debt issued by the federal government, with maturities ranging from 3 months to 12 months • Minimum denomination is $1000

  16. U.S. Series EE Bonds • A type of security that’s actually a loan on which you receive interest • When bond matures you get back your investment • Low denominations and variable interest rates • When a bond is purchased, its price is ½ its face value (buy a $50 bonds for $25, but it will be worth $50 when it matures)

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