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BANKING 101

BANKING 101. Different Types of Banking Institutions. Commercial Bank Serves both individuals/businesses Well located Branches Broad range of services FDIC Insured Savings and Loans Services better and lower fees than commercial FDIC insured. Banking Institutions. Credit Unions

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BANKING 101

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  1. BANKING 101

  2. Different Types of Banking Institutions • Commercial Bank • Serves both individuals/businesses • Well located Branches • Broad range of services • FDIC Insured • Savings and Loans • Services better and lower fees than commercial • FDIC insured

  3. Banking Institutions • Credit Unions • Lowest fees/loan rates because they are non-profit • Earnings are paid to members • Small and tend to know their clients • Insured by NCUA not FDIC • Mutual Fund/Brokerage Firms • Offer limited banking services • Require larger minimum balances for investments • Not FDIC insured by are privately insured

  4. Banking Institutions • Virtual Banks • No “brick or mortar” all online • Con: they may have limited ATM machines so you may pay more in fees • Consumer Finance Company • Specialize in providing loans to consumers who are unable to get a bank loan • Generally charge a very high interest rate

  5. Banking Institutions • Check Cashing Outlet • Will cash checks for a fee • Used by people without bank accounts • Offer short-term loans such as advance paycheck loans for a % of the value of your check • Pawnshop • Give you a loan in exchange for something of value • Or takes items on consignment

  6. Bank Services • Checking Accounts • An account that handles deposits and withdrawals • Account holder is responsible for keeping track of available funds • CHECK BOUNCING • Check is written for more than what is available in the acct. • High Fees will be charged • Possibly lose of the ability to have a checking accts

  7. Savings Accounts • Standard Savings: • Withdraw money without penalties • Offers low Interest • Certificates of Deposit (CDs) • Higher interest rates • Need to leave money in for a specific period of time • Money Market Accounts • Higher interest rates • May withdraw money a limited number of times • Requires a minimum balance

  8. Debit Cards & Bank Fees • Debit Cards • Similar to a credit card • Money is withdrawn immediately upon use • Bank Fees • Before choosing a bank you need to understand charges up front • ATM Fees • Debit Card Fees • Stop payment fees • Check printing fees • Overdraft Fees • Monthly Checking Acct Fees

  9. Bank Vocabulary • Direct Deposit • Interest bearing account • Signature card • Overdrawn • Overdraft protection • Stop payment • Debit Card • Check Register • Endorsement • Bank statement • Canceled checks • Bank Reconciliation • Outstanding Checks

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