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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

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Depository Institutions

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depository institutions

Depository Institutions

Take Charge of Your Finances

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
depository institutions2
Depository Institutions
  • Why consumers may not use them:
  • Why consumers may use them:
  • To have the opportunity to receive lower cost loan
  • They wish to keep their financial information private
  • To receive the advantages of interest earning accounts
  • Minimum balances required are too high
  • To keep money safe
  • Fees are too high
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 any/all consumers
  • Examples – Centier Bank, US Bank, Chase Bank, Peoples Bank
credit union
Credit Union
  • Credit Unions
    • Non-profit cooperative depository institution
  • Owned by members who share a common bond
  • Examples – Tech Federal Credit Union, Teachers Federal Credit Union, L C School Employees Federal Credit Union, IUN Credit Union
  • Typically offer interest rates that have the most positive impact on the consumer
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 – Citizen’s Financial, 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 is
Interest Is

The amount earned or paid for using money

Interest Rate Is

  • The % used to calculate the amount of money to be earned or paid for using money.
interest earning accounts
Interest Earning Accounts
  • Ownership, represented by shares in a corporation
  • Stock
  • Share certificate account at a credit union
  • An insured interest – earning savings instrument with restricted access to the funds
  • Certificate of Deposit
  • An account which offers higher interest rates than a savings account and may offer limited check writing privileges
  • Money Market Account
  • A debt instrument issued by an organization such as a business or the government
  • Designed as an investment for the purchasers to earn interest
  • Bond
accounts on which you must pay interest
Accounts On Which You Must Pay Interest
  • 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.
  • Money management is part of everyday life!
  • Depository institutions offer multiple services – shop around for the one which best fits your needs!
  • Ensure the depository institution is insured by the FDIC or NCUA
  • Comparison shop the financial services and interest rates offered before choosing