Financial Institutions
Information on Financial Institutions & Services
Introduction
 Why should a person learn about money management?
 It’s a daily routine.
 Everyone is involved with money.
 Education saves time and money.
 To become a millionaire!
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Definitions
Financial Institutions
Definition – ______________________ which offer multiple services in banking and finance
Services may include savings & checking accounts, loans, investments, and financial counseling
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Depository Institutions
Usually referred to as ______________________
Follow state and federal regulations
Offer banking services and loans
Serves both individuals and businesses
Examples – commercial banks, savings & loan associations, and credit unions
Insurance for Financial Institutions
 Federal Deposit Insurance Corporation (______________________)
 Federal government agency which protects bank accounts
 Each depositor is insured up to ______________________
 Savings Association Insurance Fund (______________________)
 A branch of the FDIC
 Provide insurance for Savings & Loan Associations
 Same insurance level as the FDIC
 National Credit Union Administration (NCUA)
 Same safety as deposits insured by the FDIC
 Provides insurance for Credit Unions
 A sign will be posted if a bank is insured
 OR may say “Backed by the Full Faith and Credit of the United States Government” which insures each depositor up to $250,000
Financial Institutions
 Credit Union
 ______________________ Firm
 ______________________ Bank
 Savings and Loan Association
 ______________________ financial institutions
 Wide variety of services and products
 Operate under state and federal laws
Commercial Bank
 Usually the largest financial institutions
 FDIC insured
 Examples – Wells Fargo, US Bank, First Interstate Bank
Commercial Bank Services
 Certificate of Deposit (CDs)
 They are the only financial institution allowed to offer
 Financial Services
non-interest paying checking accounts
 Investments
 Savings Accounts
 Loans
 ______________________ Boxes
 ______________________
 Credit cards
 Checking Accounts
Savings and Loan Association (S&Ls)
 Focuses on providing loans and mortgages to customers which hold a savings account
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Generally pay a higher ______________________ rate than commercial banks
Offer interest-earning checking accounts
______________________ insured
Examples – American Federal Savings Bank, Pioneer Federal Savings & Loan
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Checking Accounts
Savings Accounts
Certificate of Deposit (CDs)
Retirement Plan Accounts
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Credit Union
Non-profit cooperative financial institution, ______________________ owned
Members may have a common bond such as same employer, union, location, etc.
Usually charge ______________________ fees and loan rates and offer higher interest rates
May offer free financial counseling
NCUA insured
Examples – Rocky Mountain Credit Union, Montana Federal Credit Union
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Share Draft Accounts (checking)
Share Accounts (savings)
Share Certificate Accounts (CDs)
Safe-Deposit Box
Credit Card
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S&L Services
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Financial Counseling
______________________
Loans
Mortgages
Credit Union Services
 Financial Counseling
 Investment
 Loan
 Mortgage
 Retirement Plan Account
Brokerage Firm
Relatively new to the marketplace
______________________ Institutions
Offer money management plans for investing
Provide ______________________ assistance and advice
Monthly statements provided to track account activity
Examples – DA Davidson & Co., Merrill Lynch
Brokerage Firm Services
Investments
 Financial Counseling
Bonds
 Real Estate Investment
Stocks
 Retirement Plan Accounts
Mutual Funds
 ______________________
Benefits & Advantages to using Financial Institutions
 Quick and easy access to money
 Different ways to access money
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Teller’s window, drive-up window, automated teller machine (ATM), and electronic banking
 ______________________ ______________________
 Less expensive to purchase money orders and to cash checks
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Other businesses may charge to cash checks
 Having a checking account instead of buying money orders saves money
 ______________________
 Protection from fire, theft, & loss
 ______________________
 Money is protected by the federal government in federally insured institutions
 Up to $250,000 for each depositor
 Signs are displayed if institutions are insured stating:
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FDIC, NCUA, or Backed by the Full Faith and Credit of the United States Government
Not all are insured – look for the sign and ask!
Advantages
Using ______________________ financial institution may include these advantages:
 Simplicity – having all accounts at one place can simplify banking
 Relationship – establishing relationships can be beneficial when applying for loans
 Lower interest rates on loans may be offered to loyal customers!