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Activity 1…….Where Do I Keep My Money? Activity 2…….Evaluating Financial Services Activity 3…….Banks, Yesterday and Toda

Activity 1…….Where Do I Keep My Money? Activity 2…….Evaluating Financial Services Activity 3…….Banks, Yesterday and Today. Introduction to Financial Services - Activity 1. ACTIVITY 1 Where Do I Keep My Money? Overview • The functions of banks • The cost of alternative financial services

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Activity 1…….Where Do I Keep My Money? Activity 2…….Evaluating Financial Services Activity 3…….Banks, Yesterday and Toda

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  1. Activity 1…….Where Do I Keep My Money? • Activity 2…….Evaluating Financial Services • Activity 3…….Banks, Yesterday and Today

  2. Introduction to Financial Services - Activity 1 ACTIVITY 1 Where Do I Keep My Money? Overview • The functions of banks • The cost of alternative financial services • The stability of banks 2

  3. Slide 1 - Places to Save MoneyLesson Reference: Introduction to Financial Services, Activity 2 – Overhead 1 • PLACES TO SAVE MONEY • Would you save your money in any of these places? Why? Why not? Can you think of other places to save money? • Bed & Mattress • Cookie Jar • Pillow • Wallet • Money Belt • Small House Safe 3

  4. Slide 2 - Alternative Financial Services Lesson Reference: Introduction to Financial Services, Activity 1 – Handout 1 • ALTERNATIVE FINANCIAL SERVICES • Check-Cashing Services • Check-Deferrals, Cash Advances, Payday Loans • Pawn Shops • Rapid Tax Refunds • Rent-to-Own • Other Financial Services 4

  5. Slide 3 – FDIC Lesson Reference: Introduction to Financial Services, Activity 1 – Overhead 2 • FEDERAL DEPOSIT INSURANCE • CORPORATION (FDIC) • Established in 1933. • Insures most Savings, Checking, • and other Deposit Accounts, up to $100,000 per depositor, • per institution. • Applies to most Commercial Banks, Savings Banks, and • Savings Associations. 5

  6. ACTIVITY 2Evaluating Financial Services • Overview • Formal and informal financial services • Costs of alternative financial services and average bank accounts • Advantages of establishing a banking relationship 6 Introduction to Financial Services – Activity 2

  7. FORMALFINANCIAL SERVICES • Accounts • Credit cards • Loans • Investment vehicles • Direct deposit • Wire transfers/ remittances • INFORMAL • FINANCIAL • SERVICES • Payday lenders • Check cashing services • Rent-to-own stores • Pawn shops • Title lenders • Loans from family/friends • Cultural savings clubs • Remittances offered through nonfinancial institutions 7 Slide 1 – Formal and Informal Financial Services Lesson Reference: Introduction to Financial Services, Activity 2 – Overhead 1

  8. HOW A BANK CAN SAVE YOU MONEY Monthly Fees without a Bank Monthly Fees with a Bank* • $0 to directly deposit paycheck • $0 to get cash from bank's ATMs or make debit card purchase • $0 to pay monthly bills using electronic bill payment • $5 to send money to family • Monthly cost: $5.00 • Annual cost: $60.00 • $80 to cash paychecks • $3.81 on money orders and stamps to pay bills • $15 to send money to family with a wire transfer company • Monthly cost: $98.81 • Annual cost: $1,185.72 Annual Savings by Using a Bank: $1,125.72 8 Slide 2 – How a Bank Can Save You Money Lesson Reference: Introduction to Financial Services, Activity 2 – Handout 2

  9. ADVANTAGES OF ESTABLISHING A BANKING RELATIONSHIP Nearly everyone needs a bank account to help manage his or her day-to-day money. Bank accounts can help you to: • Pay bills • Manage your money • Receive money • Send money to a friend or family member • Keep your money secure • Start building wealth • Earn interest 9 Slide 3 – Advantages of a Banking Relationship Lesson Reference: Introduction to Financial Services, Activity 2 – Overhead 2

  10. Introduction to Financial Services - Activity 3 ACTIVITY 3Banks, Yesterdayand Today Overview • The many traditional financial services provided by a bank • Other expanded financial services provided by a bank • The impact of banks throughout the community 10

  11. Slide 1 - Traditional Services of Banks Lesson Reference: Introduction to Financial Services, Activity 3 – Overhead 1 • TRADITIONAL • SERVICES • OF BANKS • Checking Accounts • Savings Accounts • CDs (Certificates of Deposit) • Savings Bonds • Loans • Car • Home • Personal • Safe Deposit Boxes 11

  12. Slide 2 - Expanded Services of Banks Lesson Reference: Introduction to Financial Services, Activity 3 – Overhead 2 • TRADITIONAL • SERVICES • OF BANKS • Checking Accounts • Savings Accounts • CDs (Certificates of Deposit) • Savings Bonds • Loans • Car • Home • Personal • Safe Deposit Boxes • EXPANDED • SERVICES • OF BANKS • Insurance Sales • Small Business Advising and Loans • Investments • Credit Cards • Remittances 12

  13. Slide 3 - Financial Services Modernization Act Lesson Reference: Introduction to Financial Services, Activity 3 – Overhead 3 • FINANCIAL SERVICES • MODERNIZATION ACT (1999) • Transformed the banking industry. Eliminated many • restrictions among companies in the securities, • banking, and insurance industries. • Results? • Banks may offer some insurance and investment services. • Investment and insurance companies may offer some traditional banking services. Investments are not insured by FDIC. 13

  14. Slide 4 - Some Community-Related Services Lesson Reference: Introduction to Financial Services, Activity 3 – Overhead 4 • SOME COMMUNITY-RELATED • SERVICES OF BANKS • Bank employees mentor students in areas of basic financial skills. • Bank employees serve on community organizations’ boards of directors. • Banks provide scholarships to students going into the banking profession. • Banks fund affordable housing construction. 14

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