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Banking Basics

Personal Finance. Banking Basics. What Are Financial Institutions?. Four common Financial Institutions Commercial banks Savings and loan associations (S&Ls) Credit Unions Brokerage Firms. Deposit Services . Checking Accounts Savings accounts and certificates of deposit (CDs)

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Banking Basics

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  1. Personal Finance Banking Basics

  2. What Are Financial Institutions? • Four common Financial Institutions • Commercial banks • Savings and loan associations (S&Ls) • Credit Unions • Brokerage Firms

  3. Deposit Services • Checking Accounts • Savings accounts and certificates of deposit (CDs) • Automated teller machines (ATMs) • Direct deposits and automated withdrawals • Online banking • Deposit insurance

  4. Credit Services • Credit cards • Installment loans and credit lines • Mortgages • Home equity loans • Student loans • Small business loans

  5. Investment Services • Retirement accounts (IRAs, SEPs, KEOGHs) • Stocks, bonds, and mutual funds • Answer questions a – e on page 63 of Exercise 9.1

  6. Checking Out Checking Accounts • Choosing a checking account • Special account • Standard account • Interest-bearing account • Opening a checking account • Identification • Choose type • Signature card • Deposit

  7. Checking Out Checking Accounts • Making a deposit

  8. ATM And Debit Cards • ATM machines are convenient to use to deposit or withdraw funds • Need an ATM card and PIN • Charge to use ATM if ATM is not your bank’s ATM • ATM cards are often debit cards as well and can be used to make purchases • Debit card allows you to make purchases and have the money withdrawn directly from your bank account

  9. Phone Banking • Bill paying, transferring funds between accounts, account information

  10. Online Banking • Use 24/7 with secure connections • Pay bills • Transfer funds • Check account balance • Requires a user name and password • All bank transactions are included

  11. Endorsing a Check • A signature on the back of the check instructing the bank as to how the check may be cashed • Blank endorsement allows you to cash or deposit a check made out to you • Restrictive endorsement, e.g. for deposit purposes only • Special endorsement allows you to transfer the check to another person

  12. Writing a Check • Be sure you have enough money in your account to cover the check • Record the number, date, payee and amount in your check register • Subtract the amount of the check from the balance

  13. Keep a Check Register • Keep a check register even if when making all transactions via an ATM machine • All withdrawals and deposits should be recorded and the balance calculated after each transaction

  14. Questions • Answer questions on page 67 in Exercise 9.2

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