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
 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
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
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
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
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
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 Money is withdrawn immediately upon use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

Bank Vocabulary
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Direct Deposit
Interest bearing
account
Signature card
Overdrawn
Overdraft protection
Stop payment
Debit Card

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Check Register
Endorsement
Bank statement
Canceled checks
Bank Reconciliation
Outstanding Checks