Savings and Banking

Jason is a high school sophomore. He has a part-time job and a little money in savings, but has a hard time keeping it there. Jason wants to buy a car in a few years. Which account type best matches his financial goals?

Certificate of Deposit - Jason can choose a term that ends when he wants to buy his car, and his money will earn more interest than in a simple savings account

cash checking services

Check-cashing services cash your paychecks for a fee

Credit Union

Credit Unions offer many of the same services as retail banks, but to join a credit union, you have to become a member. This is usually restricted to people living or working in a certain area or working for a specific organization or industry. For example, there are credit unions whose membership requires that you be a student or employee at a university or be a member of the military.

Customer Service Representative:

Helps bank customers with any questions they may have.

Bank Teller:

Helps with account transactions like depositing or withdrawing money.

What does it mean if an account is "FDIC-insured

It protects up to $250,000 per person per bank in each account category. And if you have money at a credit union, they have their own insurance, which is managed by the National Credit Union Administration.

What does it mean if an account is "liquid"

Liquidity refers to how easy it is to get at your money. High liquidity means it's easy to get your money right away. Low liquidity means it's harder to access your funds. A checking account has high liquidity, since it's easy to take your money out immediately. On the other hand, a Certificate of Deposit has low liquidity since you won't have access to your money for a specified amount of time, sometimes for a few years! Other accounts are somewhere in-between, like a money market account, for instance.

Bank manager

Manages all the personnel at a specific location

Aidan is a graduating high school senior. He has been saving money for several years and needs to have some access to his money to pay for ongoing living expenses. Aidan wants to rent his own apartment after college. Which account type best matches his financial goals?

Money Market - Since Aidan already has some savings, he can meet the minimum requirements for a money market account. Plus, Aidan won't have his money tied up in the meantime - he can continue to write checks from this account to cover his expenses.

retail banks

Retail Banks offer services like savings and checking accounts, mortgages, personal loans, debit cards, and credit cards. For the most part, a retail bank deals directly with individual customers like you, but they may also serve businesses

which types of banking services usually have access to ATMs

Retail banks Credit Unions online banks

which types of banking services usually have online options

Retail banks Credit Unions online banks

Pay Yourself First

Set aside some of the money from your paycheck each month. Even if it's just a small amount, you'll build up savings that you can use to pay for emergencies, buy a big-ticket item, or for college

Rosa is a high school freshman with no savings. She wants to buy a new smartphone in a few months for $300. Which account type best matches Rosa's financial goals?

Simple savings account - A simple savings account works best since she just started saving and needs to withdraw money easily if unexpected expenses come up

three parts of the federal reserve

The Board of Governors Reserve Banks FOMS

What do reserve banks do

They collect data and research on the economy and keep an eye on the banks in their regions. They also provide financial services to other banks and to the U.S. government.

money market account

Usually, these accounts offer higher interest rates than savings accounts; in exchange for a higher rate, they might require a high minimum balance

online banking

You can access services like savings and checking accounts, and debit and credit cards, but you won't find a physical location near you. Instead, you'll have to fire up your web browser or download an app, because they do their business online.

required balance

Your account balance is the amount of money you have in your account. Some of our accounts require that you have a minimum amount in there at all times. If you don't have the minimum required balance, you could be charged a fee.

What kind of special features are available for a typical checking account?

auto pay - pay bills automatically auto save- automatically transfer $ to savings Direct deposit- deposit paycheck from employer directly to acc

What does the FOMC do?

decides monetary policy and bank rates about the money supply and interest rates charged to banks.

What does the board of governors do

ensures that banks behave responsibly. It supervises the 12 Reserve Banks and helps decide monetary policy, like how much money is available to the economy.

What will help maximize interest

higher interest rates and longer periods of time

Would a compounding account earn more money if it compounded twice a year compared to daily?

no, the more often it compounds the more money you will make

pay day lenders

o be clear, these are not banks. While they do provide some banking services, they also come with high rates and fees. Payday lenders allow you to receive a loan in the form of cash before your payday

Best budgeting practices

pay yourself first don't spend money you don't have save for a rainy day save early save often

Banking options

retail bank credit union online banks pay day lenders and cash checking services

relationship between liquidity and interest rates

the lower the liquidity the higher the interest rate

Certificate of Deposit (CD)

this is a deposit that is held for a specific period of time, or "term," like three months, six months, one year, or even longer. During the term, the bank pays interest to you on your deposit. Each CD has different terms around how much you'll earn and when you can take out your money. Typically, the longer you let the bank keep the money, the higher your interest rate, which means you'll wind up making more money

What happens if you withdraw money from a CD before your term is over

you'll be penalized

Loan Officer

Advises, evaluates, and signs off on loans to individuals and businesses.

Four types of fees

Atm fee Return check fees ( bounced check and Return check) Service Fee