Chapter 7

Name 3 reasons why check writing is becoming obsolete.

1. Mobile banking 2. Advanced technology 3. Banking app

Commercial Bank

A for-profit institution that offers a full range of financial services, including checking, savings, and lending.

Credit Union

A nonprofit financial institution that is owned by its members and organized for their benefit.

Direct Deposit

An automatic deposit of net pay to an employee's designated bank account.

Fees and Restrictions

Does it have monthly fees? Minimum balance? ATM cahrges?

Is the bank convenient?

Does it offer direct deposit, online banking, ATM or debit card access? Is it close to home?

Why do experts recommend using check cashing services sparingly?

High fees

Borrowing

Includes credit cards, car loans, mortgages.

Other Financial Services

Includes insurance, investments, financial planning, business accounts, safe deposit boxes.

NCUA (National Credit Union Association)

Insures depositors money in case of Credit Union failure. Insures up to $250,000.

Finance Company

Make higher interest loans to consumers and small businesses. Usually cater to below-avergae credit ratings.

Pawnshop

Male loans off of valuable items. Used to get cash quickly, but will pay high fees.

Savings

Money you have easy access to. Liquid.

6 guidelines to writing a check.

Name/Address, Payee, Amount in Figures, Amount in Words, Purpose, Signature.

Mobile Banking

Offers everything a bank does. More convient, always with you. An app.

What does the FDIC not insure?

Other financial products and services banks may offer.

Mutual Savings Bank

Owned by a depositor. Specialize in savings and mortgages. Similar to a credit union, normally offers lower fees and higher interest rates.

Life Insurance Company

People buy this to provide financial security for their dependents.

Investment Company

People choose investments for long-term growth of their money. Offers mutual funds, stocks, bonds, etc.

FDIC (Federal Deposit Insurance Corporation)

Protects depositors money incase of bank failure. Insures up to $250,000 per person per account. Made ue to the Great Depression and the Stock Market Crash.

Mortgage Company

Provide loans for buying a home or other real estate. Most offer other services such as checking/savings.

Difference between savings and CD's? Why would you choose one over the other?

Savings are liquid and CD's are locked up for a term to earn you more interest. you would choose CD's if you want to make more money off the money you already have. You would choose savings if you want easy access to your money.

Savings and Loan Association

Similar to commercial banks. Traditionally omly offered savings accounts and mortgages.

CD's

Svings you don't have easy access to. Locked up for a period of time to earn you more interest.

Payment

Transferring money to pay bills. Includees checking accounts.

Check Cashing Outlet

Used by people who don't have a checking account. Cah payroll checks, offer money orders, utility bill. High fees.

What does it mean when you overdraft your account?

You spend money on a transaction but you don't have enough in your checking account. You take out more money than you have.