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Financial Services and Electronic Banking . 17-2. Types of financial services . Savings services Financial institutions accept money for safekeeping. A broad range of savings plans are available Payment services The ability to transfer money to others Several types Checking accounts

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types of financial services
Types of financial services
  • Savings services
    • Financial institutions accept money for safekeeping.
    • A broad range of savings plans are available
  • Payment services
    • The ability to transfer money to others
    • Several types
      • Checkingaccounts
      • Debit cards
      • Online payments
      • Automatic withdrawals
types of financial services cont
Types of Financial services cont.
  • Lending Services
    • Most people, businesses and government need to borrow money at some time.
    • Banks offer many types of lending
      • Auto loans
      • Business loans
      • Student loans
      • Home loans
    • When paying with a bank credit card (not a debit card) you are borrowing money from the bank
types of services cont
Types of services cont.
  • Electronic Banking
    • Electronic fund transfer refers to the use of computer and other technology for banking services.
    • Includes: ATM, Point-of-sale transactions, direct deposit, and automated bill payment.
  • Storage of valuables
    • Banks offer safe deposit boxes
    • Individuals keep jewelry, rare coins, investment certificates birth records, list of insurance policies, and other valuable documents
    • Banks do not have the right to open your box only you do.
types of services cont1
Types of services cont
  • Investment advice
    • Many financial institutions offer investment advice
    • Can assist customers whether it is wise to buy a certain house, how to manage money, or how to exchange money in foreign currency
  • Management of trusts
    • Banks mange investments on the behalf of customers
    • When thy do this the money or property turned over is said to be held in “trust”
    • Mainly used for very young and very old people.
types of checking accounts
Types of Checking accounts
  • Regular checking accounts
    • If you write a lot of checks use a regular checking
    • There are no service charges for writing checks
    • You must maintain a certain balance
      • Often $300 or higher
  • Interest Earning Checking Accounts
    • You earn money on your money
    • Usually must have a high monthly balance
    • If it falls below the monthly balance you will not receive interest and will have a service charge
    • Usually interest rates vary depending on the amount in the account.
types of checking accounts1
Types of Checking Accounts
  • Special checking accounts
    • If you do not write a lot of checks this may be for you
    • Banks usually charge a monthly service charge or 10-20 cents a check
comparing checking accounts
Comparing Checking accounts
  • When selecting a checking account evaluate the following items
    • Minimum balance
    • Interest rate earned, if any
    • Monthly service charge
    • Fees for other services such as printing checks and stop payment orders
    • Other restrictions
  • Some banks lure you by having a low monthly balance but, beware of service fees.
electronic banking
Electronic Banking
  • Automatic Teller Machines
    • A debit or cash card is used for ATM transactions
      • With a debit card you are using money in your account
      • Notify bank within 2 days if debit card is stolen or is being used by an unauthorized. Your liability for unauthorized use is $50 in those 2 days. If you do not notify the bank within 2 days you have a $500 liability.
    • Some ATM’s allow you to buy bus passes, postage stamps, and gift certificates
    • Be aware of ATM fees.
      • Make sure the amount you are taking out is worth the fees
  • Payment at the point of sales
    • A merchant accepts a debit card to pay for purchases.
      • Most gas stations, stores, and restaurants accept them
        • Some places are starting to put them in vending machines.
electronic banking cont
Electronic banking cont.
  • Direct Deposit
    • Your paychecks are electronically deposited in your account.
    • Most places use direct deposit.
  • Automatic Bill Payment
    • You must authorize a bank to make the payments for you.
    • For things such as rent, utilities, loans, and other bills.
    • The bank automatically sends a check out for you
electronic payment options
Electronic payment Options
  • Debit Card Transactions
    • Most restaurant, stores and other businesses accept debit cards if they are issued by visa or MasterCard
    • When you make a purchase the amount is taken out of your checking account.
    • Debit cards are used in 1 of 2 ways
      • You sign a receipt similar to a credit card
      • You are asked to enter your pin number similar to an ATM
  • Online Payments
    • Many online companies offer this feature
    • They automatically take the payment out of your account
      • Make sure there are no fees and that it is secure.
electronic payment options cont
Electronic payment Options cont.
  • Stored-Value cards
    • Prepaid cards for things such as phone service, transit fees, highway tolls, laundry service, and school lunches
    • Some of them are disposable
    • Some can be recharged.
  • Smart cards
    • Sometimes called “electronic wallets”
    • They have microchips and stores prepaid amounts, account balances, transaction records, insurance information, and medical history.
banking in the future
Banking in the future
  • Almost every aspect will be electronic with wireless technology.
  • Almost any transaction will be able to be made away from the financial institution
  • An access card or a handheld device will provide a large number of services.