Depository institutions
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Depository institutions Depository institutions Presentation Transcript

  • Depository Institutions Take Charge of Your Finances 1.7.3
  • Depository Institutions
    • Depository Institutions – businesses which offer multiple services in banking and finance
      • These institutions include:
        • Banks
        • Savings and Loans
        • Credit Unions
      • They are regulated by various state and federal agencies
  • Depository Institutions
    • Services include:
    Federal Reserve Bank
  • Federal Reserve Bank
    • Which federal reserve bank located in your region?
  • Commercial Bank
    • Commercial Banks
      • Usually the largest depository institutions
      • Considered full-service depository institutions
      • Available to a variety of consumers
    • Examples – Wells Fargo, US Bank, Chase Bank
  • Credit Union
    • Credit Unions
      • Non-profit cooperative depository institution
    • Owned by members who share a common bond
    • Examples – Rocky Mountain Credit Union, Teachers Federal Credit Union
  • Savings and Loan Association (S&Ls)
    • Savings and Loan Association
      • Focus on providing loans and mortgages
    • Customers must have a savings account with them
    • Examples – American Federal Savings Bank, Pioneer Federal Savings & Loan.
  • Types of Insurance
    • Federal Deposit Insurance Corporation (FDIC)
      • Federal government agency which protects depository institution accounts
      • Insures commercial banks and savings and loan associations
    • National Credit Union Administration (NCUA)
      • Provides insurance for credit unions
  • Insurance Protection
    • Insurance protection
      • Each depositor is insured up to $250,000 for money deposited in a regular account and $250,000 for retirement deposits
      • Available from both FDIC and NCUA
    • Insurance is important because of the risk of loss
  • Interest
    • Interest - the amount of money that is either gained or lost when accessing services offered by a depository institution
    • Interest rate - the percentage used annually to calculate the total interest either gained or lost
    Type of account Interest rate Impact on the consumer Interest bearing - money earned from an investment instrument High More money earned by the consumer Low Less money earned Interest bearing - the charge for money that a consumer borrows from a depository institution High More money paid by the consumer Low Less money paid Credit unions typically offer rates which have the most positive impact on the consumer
  • Common Services Offered
  • Additional Services Which May Be Offered
    • Safe-Deposit Box
      • A secured box in a bank to be used for valuable and important personal items.
    • Financial Counseling
      • Information and advice is given to customers to help make financial decisions.