Intro to Business

1. Intro to Business Unit Eight Review Financial Institutions & Banking Systems Chapter 25, 26, 27, 28

2. Chapter 25 Review (1) • Banks earn most of their revenue by charging for loans they make and by investing part of the money deposited by customers. • The main types of deposit-type institutions are commercial banks, savings and loan associations, mutual savings banks, and credit unions.

3. Chapter 25 Review (2) • Nondeposit financial institutions include: • Life insurance companies • Investment companies • Consumer finance companies • Mortgage companies • Check-cashing outlets • Pawnshops

4. Chapter 25 Review (3) • The most common services offered by financial institutions are: • Accepting deposits, • Transferring funds, • Lending money • Storing valuables • Providing financial advice • Investment services • Managing trusts

5. Chapter 25 Review (4) • The Federal Reserve System serves member banks by accepting their deposits, lending them money, and providing other services.

6. Chapter 25 Review (5) • Banks and other financial institutions serve communities by: • employing people • lending money to build homes • start new businesses • plant crops • finance educations • buy goods, • pave streets • build hospitals • buy new business equipment

7. Chapter 26 Review (1) • A checking account provides: • Convenience • Safety • Proof of payment • A record of finances

8. Chapter 26 Review (2) • The main types of checking accounts are: • Regular Checking Accounts • May or may not charge fees • Interest Checking Accounts • Pay interest so long as the balance meets the requirements.

9. Chapter 26 Review (3) • When opening a checking account, you must sign your name on a signature card, which becomes the bank’s official record of your signature, make your deposit and select your checks • The purpose of a check stub and check register is to record deposits and to maintain a record of checks written.

10. Chapter 26 Review (4) • The purpose of an endorsement is to allow the recipient of the check to cash deposit, or transfer it to someone else. • 3 Main Types of Endorsements: • Blank endorsement • Special endorsement • Restrictive endorsement

11. Chapter 27 Review (1) • Proper check writing includes: • filling in the check register or check stub • Writing checks in numerical order • Writing the date • Writing the payee • Writing the amounts • Writing the purpose • Proper signature on the check.

12. Chapter 27 Review (2) • Good check writing tips include: • Using check forms provided by the bank • Writing in ink • Not overdrawing • Using the current date • Not making checks payable to Cash or to Bearer • Always filling in the amount • Voiding checks with errors • Recording every payment

13. Chapter 27 Review (3) • A stop-payment order is a written notice from the drawer telling the bank not to pay a certain check. • Only accept checks written or endorsed by people whom you know and trust or those who provide valid identification.

14. Chapter 27 Review (4) • 3 Special types of checks that may be used for payments are: • Certified checks • Cashier’s checks • Traveler's checks • 4 Main sources of money orders are: • Banks • Post offices • Express companies • Telegraph offices

15. Chapter 27 Review (5) • Electronic Funds Transfer (EFT) makes it possible to move funds by computer through: • an ATM, • automatic bill payment, and • direct deposit.

16. Chapter 28 Review (1) • Checks clear the banking system when financial institutions exchange funds based on the amounts of checks written and deposited by customers. • Information on a bank statement includes the: • Beginning balance • Deposits made during the month • ATM transactions • EFTs or special payments • Service charges • Any interest earned • Balance at the end of the month

17. Chapter 28 Review (2) • Information on a bank statement includes the: • Beginning balance • Deposits made during the month • ATM transactions • EFTs or special payments • Service charges • Any interest earned • Balance at the end of the month

18. Chapter 28 Review (3) • Reconciling a checking account involves finding the differences between the balance on the bank statement and the balance in your checkbook. • To obtain the best value for your financial services dollar, investigate and compare: • services offered, • safety, • convenience, • fees and charges • restrictions