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Depository Institutions. Take Charge of Your Finances 1.7.3. Depository Institutions. Depository Institutions – businesses which offer multiple services in banking and finance These institutions include: Banks Savings and Loans Credit Unions

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Depository institutions

Depository Institutions

Take Charge of Your Finances 1.7.3


Depository institutions1
Depository Institutions

  • Depository Institutions – businesses which offer multiple services in banking and finance

    • These institutions include:

      • Banks

      • Savings and Loans

      • Credit Unions

    • They are regulated by various state and federal agencies



Federal reserve bank
Federal Reserve Bank

  • Services include:


Federal reserve bank1
Federal Reserve Bank

  • Which federal reserve bank is located in your region?



Depository institutions3
Depository Institutions

  • Commercial Bank

  • Credit Union

  • Savings and Loan Association


Commercial bank
Commercial Bank

  • Commercial Banks

    • Usually the largest depository institutions

    • Considered full-service depository institutions

    • Available to a variety of consumers

  • Examples – Wells Fargo, US Bank, Chase Bank


Credit union
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


Savings and loan association s ls
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.


Types of insurance
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


Insurance protection
Insurance Protection

  • Insurance protection

    • Each depositor is insured up to $250,000 for money deposited in a regular account and $250,000 for retirement deposits

    • Available from both FDIC and NCUA

  • Insurance is important because of the risk of loss

  • Risk of Loss is used to determine which party should be responsible for damage or loss of products after a service transaction has been completed but prior to delivery


Interest
Interest

  • Interest - the amount of money that is either gained or lost when accessing services offered by a depository institution

  • Interest rate - the percentage used annually to calculate the total interest either gained or lost





Interest bearing accounts1
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.


Additional services which may be offered
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.




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