1 / 20

Depository Institutions

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

Télécharger la présentation

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.


Presentation Transcript

  1. Depository Institutions Take Charge of Your Finances

  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. Federal Reserve Bank • Which federal reserve bank located in your region?

  6. 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

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

  8. 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

  9. Credit Union • Credit Unions • Non-profit cooperative depository institution • Owned by members who share a common bond • Examples – Rocky Mountain Credit Union, Teachers Federal Credit Union

  10. Savings and Loan Association (S&Ls) • Savings and Loan Association • Focus on providing loans and mortgages • Customers must have a savings account with them • Examples – American Federal Savings Bank, Pioneer Federal Savings & Loan.

  11. 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

  12. Insurance Protection • Insurance protection • Each depositor is insured up to $100,000 for money deposited in a regular account • Each depositor is insured up to $250,000 for qualified retirement deposits • The same protection is available from both FDIC and NCUA • Insurance is important because the risk of loss. • Risk of Loss is used to determine which party should be responsible for damage occurring to products after a service transaction has been completed but prior to delivery.

  13. Interest • Interest – the amount of money that is either gained or lost when accessing services offered by a depository institution • Two types of interest include: • Interest earning - Money earned from an investment instrument • Interest bearing - The charge for money that a consumer borrows from a depository institution

  14. Interest Rates • Interest rate – the percentage used annually to calculate the total interest either gained or lost

  15. Depository Institution Services

  16. Common Services Offered • Checking account (also known as a Share Draft Account at a credit union) • Paper checks or debit cards that are used to withdraw money • May or may not be interest bearing • Savings account(also known as a Share Account at a credit union) • An account in which money is typically deposited to earn interest • Interest bearing

  17. Interest Earning Accounts • Stock • Ownership, represented by shares in a corporation • Certificate of deposit (also known as a Share Certificate account at a credit union) • An insured interest-earning savings instrument with restricted access to the funds • Money market account • An account which offers higher interest rates than a savings account and may offer limited check writing privileges • Bond • A debt instrument issued by an organization, such as a business or the government • Designed as an investment for the purchasers to earn interest

  18. 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.

  19. 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

  20. AssignmentDepository Institutions:Note taking guide

More Related