Intro. to Business Chap 20

Investment companies

Allow people to choose investment opportunity for long term growth of their money.

Are banks like businesses?

Banks are businesses because they sell services such as checking accounts, saving accounts and loans. They want to earn revenues and make profits.

Can anyone start a bank?

No, not everyone can start a bank. They have to meet federal and government's state requirements. They take people's money so they must be fair. Must have enough captail.

Life insurance companies

Peeps buy this to provide financial security for dependents. Offer financial services and helps expand business in economy

Check cashing outlets

Peeps who don't have banks may use for check cashing outlets to cash paychecks and obtain finacial services

How can people start a bank?

People can start a bank, but they have to apply for charter from the federal government. If they apply to their state and the charter is granted, the bank will open as a state bank. If it is a charter from the federal government it will operate as a national association (N.A).

FDIC

Protects depositors money in case of failure... Insures all account in same bank

ATMs (Automatic Teller Machines)

Provide automatic teller service quickly and easily 24 hours a day. Can give instructions to write letter instructing the banks to make electronic transfers. Some banks may charge fees if dont belong.

Mortages companies

Provide loans for purchasing a home or restate

Mutual Savings Bank

Provides a variety of services. It organized mainly savings accounts and to make loans to home buyers. Owned by depositors

Nondeposit financial institution

Refers to financial institution

Investments

Savings put to work to earn more money (financial institutions help their customers through financial advice)

Is government regulation of a bank necessary?

Yes, it is necessary because if a bank fails thousands of people will loose money. The government has to regulate the banking laws to assure the saftey of customers' money. State banks= state banking laws and National banks= federal law

Electronic Funds Transfer (EFT)

a system through which funds are moved electronically from one account to another and from one bank to another. (job)

Deposit type institutions

accept deposits for people in the future (main types: commercial, s&l, mutual, credit union)

Trust Companies

are businesses that manage people's money and property for them. Good for young and old because people may not have skills or experience to handle money.

Financial Institutions and Economic Growth

banking services are commonly used for many things such as buy goods, building homes,pave streets, hospitals, etc. Deposits do not remain idle in bank vaults they help the community for example earn revenue

Federal Reserve Activities

banks cannot lend all of the money they receive from their customers. Must keep certain amount of money to keep customers cash

point of sale transactions

in which atm cards are accepted @ gas stations grocery, to pay for purchases

Federal Reserve bank

is the banks for banks. banks is similar to relationship of your bank to you.

direct deposit

paycheck automatically deposited in checkings or savings account

Home banking

payments are made and loans are obtained by customers and telephones

lending money

people borrow money to expand on business and many other things. Can offer loans through credit cards or checks.

Safe Deposit Box

place to store vaulables. someone has one key and someone else has another

Accepting Deposits (Financial Services)

safe storage funds for the future. One of main services is they offer to keep money for safe keeping.

Transferring funds (Financial Services)

the ability to transfer to others is extremely important . Money in a checking account can be accessed at any time, by writing a check and this can be deposited in the account of the person who receives the check

interest

the amount paid for the use of money

Federal Reserve System

to supervise and regulate member banks in order to help the banks serve the public efficiently and all national banks must join and state banks may join. Banks that join called member banks.

Pawnshops

Make loans based on tangible possessions

Commercial banks

Full service banks that offer a wide range of financial services. Bank offer checking accounts, provide savings accounts, make loans to individuals and to businesses, And offer other services. Have been opened in supermarkets and offer everything!

Credit union

Is a user-owed, not-for-profit, cooperative financial instution. Usually formed by peeps in same company, church, community,etc. Offer other services...(NCua- insures depositors funds in case of failure) like fdic

Savings and Loans Association

Specalized in savings accounts and making loans for home mortages

Consumer finance company

Specializes in making loans for long lasting or durable goods and for financial emergencies