Unit 3: Financial Institutions & Banking Systems

Part 2: Accounts

Dollars & Sense

Accounts Offered by Banks & Credit UnionsSavingsCertificates of Deposits (CD’s)Money MarketChecking

Types of Savings PlansSection 2

Savings Plans and Payment Methods

Types of Savings PlansSection 2

Savings Plans and Payment Methods

Three Limitations of a Certificate of Deposit (CD)

Your money must stay in the account for one month to five or more years.

You must pay a penalty for withdrawing your money early.

There is usually a minimum deposit amount.

Types of Savings PlansSection 2

Savings Plans and Payment Methods

money market accounta savings account that requires a minimum balance and earns interest that varies from month to month

Types of Checking AccountsSection 2

Savings Plans and Payment Methods

Regular Checkin

g Account

s

Interest-

Earning Account

s

Checking:• A transactional bank account.• Easy access to your money

Advantages of a Checking Account1. Convenience2. Safety3. Proof of Payment4. Record of Finances

Advantages of a Checking Account1. Convenience

Write checks at homePay bills by mailDebit Card

Online payments Swipe card and money is taken directly out of

checking account Need Cash? = ATM

Advantages of a Checking Account2. Safety

Money on hand involves risk of losing it by fire, theft, or carelessness

Less temptation to spend moneyCheck can only be cashed by person or

business to whom it is payable

Advantages of a Checking Account2. Safety

FDIC & NCUA Most banks & credit unions are members FDIC insures deposits up to $250,000

Advantages of a Checking Account3. Proof of Payment

Check is legal proof of your finances Payment to others Confirm with bank All checks are now

electronically imaged

Advantages of a Checking Account4. Record of Finances

Check is legal proof of your financesHow much are you spendingWhere your money is goingHow much you have remaining

Types of Checking Accounts - OverviewDiffer in what they offer to customers

Annual FeeMinimum BalanceFee for each check written (Service Charge)Fee for ATM use (Service Charge)Interest earning accounts

Types of Checking AccountsRegular Checking Accounts

No service chargesLow Minimum Account BalanceTypically No Interest on Account

Student Checking Accounts Senior Checking Accounts

Types of Checking AccountsInterest Checking Accounts

Most require Minimum Monthly Balance Most $500 or more

Service Charges/Fees May require a specific # of checks written or debit

card transactions May require direct deposit Monthly Service Charge

Pays a Low Rate of Interest on Account

Your TaskComplete and email the Bank Account

Comparison Worksheet