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1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Depository Institutions
Take Charge of Your Finances 1.7.3
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Depository Institutions
Depository Institutions – businesses which offer multiple services in banking and finance These institutions include:
Banks Savings and Loans Credit Unions
Institutions are regulated by various state and federal agencies
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Depository InstitutionsWhy consumers may not use them:
Fees are too high Minimum balances
required are too high
They wish to keep their financial information private
Why consumers may use them:
To keep money safe
To receive the advantages of interest earning accounts
To have the opportunity to receive lower cost loan
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Federal Reserve Bank
Federal Reserve Bank – is part of the central banking system in the United States Services provided to depository
institutions include: Collecting checks Electronically transferring funds Distributing and receiving cash and coin
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Life of a Deposited Check
Look closely at steps 2-4 to see how the Federal Reserve bank plays an integral role in how a check transaction works
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Depository Institutions
Commercial Bank
Credit Union Savings and
Loan Association
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Commercial Bank
Commercial Banks Usually the largest depository
institutions Considered full-service depository
institutions because offer a wide variety of services and products
Available to a variety of consumers Examples – Wells Fargo, US Bank,
Chase Bank
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Credit Union
Credit Unions Non-profit cooperative depository
institution Owned by members who share a
common bond Example – Vantage Credit Union
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Savings and Loan Association (S&Ls)
Savings and Loan AssociationFocus on providing loans and mortgages
Customers must have a savings account with them
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
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 Each depositor is insured up to
$250,000 The same protection is available from
both FDIC and NCUA
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Depository Institution Services
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Common Services Offered Checking account (also known as a
Share Draft Account at a credit union) Savings account (also known as a
Share Account at a credit union) Stock
Ownership, represented by shares in a corporation Certificate of deposit (also known as a
Share Certificate account at a credit union) Money market account Bond
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Interest Bearing Accounts 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.
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
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
Mutual FundA group of stocks, bonds, and other
investments managed by a brokerage firm.
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Conclusion& Review
1.7.3.G1
© Family Economics & Financial Education – Revised March 2008 – Financial Institutions Unit – Depository Institutions
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
Review 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 a depository institution