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© Family Economics & Financial Education – Revised May 2009– 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 February 2009 – 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
They are regulated by various state and federal agencies
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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
Services include:
Federal Reserve Bank
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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
Which federal reserve bank located in your region?
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© Family Economics & Financial Education – Revised February 2009 – 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
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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 February 2009 – 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 Available to a variety of consumers
Examples – Wells Fargo, US Bank, Chase Bank
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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 Examples – Rocky Mountain Credit
Union, Teachers Federal Credit Union
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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
Examples – American Federal Savings Bank, Pioneer Federal Savings & Loan.
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© Family Economics & Financial Education – Revised February 2009 – 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
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© Family Economics & Financial Education – Revised February 2009 – 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
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 the risk of loss Risk of Loss is used to determine which party
should be responsible for damage occurring to products after a service transaction has been completed but prior to delivery
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© Family Economics & Financial Education – Revised February 2009 – 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 Interest - the amount of money that is either gained or lost
when accessing services offered by a depository institution Interest rate - the percentage used annually to calculate
the total interest either gained or lost
Type of account Interest rateImpact on the
consumerInterest earning - money earned from an investment instrument
HighMore money earned by the consumer
LowLess money earned
Interest bearing - the charge for money that a consumer borrows from a depository institution
HighMore money paid by the consumer
Low Less money paid
Credit unions typically offer rates which have the most positive impact on the consumer
1.7.3.G1
© Family Economics & Financial Education – Revised February 2009 – 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 February 2009 – 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
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© Family Economics & Financial Education – Revised February 2009 – 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 Earning Accounts
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© Family Economics & Financial Education – Revised February 2009 – 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.
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© Family Economics & Financial Education – Revised February 2009 – 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.
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© Family Economics & Financial Education – Revised February 2009 – 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
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© Family Economics & Financial Education – Revised February 2009 – 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