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Money is withdrawn immediately upon use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