Activity 1…….Where Do I Keep My Money?Activity 2…….Evaluating Financial ServicesActivity 3…….Banks, Yesterday and Today

By-mynk

ACTIVITY 1

Where Do I Keep My Money?

Overview

• The functions of banks

• The cost of alternative financial services

• The stability of banks

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PLACES TO SAVE MONEY

Would you save your money in any of these places? Why? Why not? Can you think of other places to save money?

• Bed & Mattress• Cookie Jar• Pillow• Wallet• Money Belt• Small House Safe

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ALTERNATIVE FINANCIAL SERVICES

•Check-Cashing Services

•Check-Deferrals, Cash Advances, Payday Loans

•Pawn Shops

•Rapid Tax Refunds

•Rent-to-Own

•Other Financial Services

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FEDERAL DEPOSIT INSURANCECORPORATION (FDIC)

• Established in 1933.• Insures most Savings, Checking,

and other Deposit Accounts,up to $100,000 per depositor,per institution.

• Applies to most CommercialBanks, Savings Banks, andSavings Associations.

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Overview

• Formal and informal financial services• Costs of alternative financial services and

average bank accounts • Advantages of establishing a banking

relationship

ACTIVITY 2

Evaluating Financial Services

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INFORMAL FINANCIALSERVICES

• Payday lenders• Check cashing services• Rent-to-own stores• Pawn shops• Title lenders• Loans from family/friends• Cultural savings clubs• Remittances offered through

nonfinancial institutions

FORMALFINANCIAL SERVICES

• Accounts• Credit cards• Loans• Investment vehicles• Direct deposit• Wire transfers/ remittances

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HOW A BANK CAN SAVE YOU MONEY

Monthly Fees without a Bank Monthly Fees with a Bank*

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• $80 to cash paychecks• $3.81 on money orders and

stamps to pay bills• $15 to send money to family

with a wire transfer company

Monthly cost: $98.81 Annual cost: $1,185.72

• $0 to directly deposit

paycheck• $0 to get cash from bank's

ATMs or make debit card purchase

• $0 to pay monthly bills using electronic bill payment

• $5 to send money to family

Monthly cost: $5.00 Annual cost: $60.00Annual Savings by Using a Bank: $1,125.72

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ADVANTAGES OF ESTABLISHING A BANKING RELATIONSHIP

Nearly everyone needs a bank account to help manage his or her day-to-day money.

Bank accounts can help you to:• Pay bills• Manage your money• Receive money• Send money to a friend or family member• Keep your money secure• Start building wealth• Earn interest

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ACTIVITY 3

Banks, Yesterdayand Today

Overview

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• The many traditional financial services provided by a bank

• Other expanded financial services provided by a bank

• The impact of banks throughout the community

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TRADITIONALSERVICESOF BANKS

• Checking Accounts• Savings Accounts• CDs (Certificates of

Deposit)• Savings Bonds• Loans

• Car• Home• Personal

• Safe Deposit BoxesHappy to help…!11

EXPANDEDSERVICESOF BANKS

• Insurance Sales• Small Business

Advising and Loans• Investments• Credit Cards• Remittances

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TRADITIONALSERVICESOF BANKS

• Checking Accounts• Savings Accounts• CDs (Certificates of

Deposit)• Savings Bonds• Loans

• Car• Home• Personal

• Safe Deposit Boxes12

FINANCIAL SERVICESMODERNIZATION ACT (1999)

Transformed the banking industry. Eliminated many

restrictions among companies in the securities, banking, and insurance industries.

Results?• Banks may offer some insurance and

investment services.

• Investment and insurance companies may offer some traditional banking services. Investments are not insured by FDIC. Happy to help…!13

SOME COMMUNITY-RELATEDSERVICES OF BANKS

• Bank employees mentor students in areas of basic financial skills.

• Bank employees serve on community organizations’ boards of directors.

• Banks provide scholarships to students going into the banking profession.

• Banks fund affordable housing construction. Happy to help…!14