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Debit Cards Similar to a credit card Money is withdrawn immediately upon use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