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Banking and Financial Services

17. 17-1 Banks and Other Financial Institutions 17-2 Financial Services and Electronic Banking 17-3 Checks and Payment Methods. Banking and Financial Services. Goals Explain the purpose of the Federal Reserve System. List the types of financial institutions.

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Banking and Financial Services

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  1. 17 17-1 Banks and Other Financial Institutions 17-2 Financial Services and Electronic Banking 17-3 Checks and Payment Methods Banking and Financial Services

  2. Goals Explain the purpose of the Federal Reserve System. List the types of financial institutions. Discuss factors for selecting a financial institution. Chapter 17 LESSON 17-1Banks and Other Financial Institutions

  3. Federal Reserve System (Fed) commercial bank credit union Federal Deposit Insurance Corporation (FDIC) Chapter 17 Key Terms

  4. A bank is a business that sells services such as checking and payment accounts, savings accounts, loans, and investments. • Regulated more strictly than most businesses due to the number of people involved if the bank fails. • The Federal Reserve System (Fed) • A bank that will not allow you to make deposits. • A bank for other banks Chapter 17 THE BANKING SYSTEM

  5. Federal Reserve Bank activities • Holds reserves….a part of the money deposited by customers @ a bank in case additional funds are needed to meet daily customer demand • A bank will lend only a certain percentage of deposited funds. • Regulation is designed to help the banking system and the economy operate efficiently to protect depositors • Clearing checks….paying of checks among different banks in different cities. • Ensures the correct amounts are added and subtracted from the appropriate customer accounts. Chapter 17 THE BANKING SYSTEM

  6. What is the main purpose of the Federal Reserve System? Chapter 17 >> C H E C K P O I N T

  7. Deposit institutions • Commercial banks – most common • Also called full-service banks • Offer a wide range of financial services; checking, savings, loans to individuals and businesses • Savings and loan associations – specialize in savings accounts and home mortgages. • Mutual savings banks – a savings bank owned by and operated for its depositors • Credit unions – a user-owned, not-for-profit cooperative financial institution. Chapter 17 TYPES OF FINANCIAL INSTITUTIONS

  8. Non-deposit financial institutions • Life insurance companies • Investment companies • Consumer finance companies • Mortgage companies • Check-cashing outlets • Pawnshops Chapter 17 TYPES OF FINANCIAL INSTITUTIONS (continued)

  9. What are some examples of non-deposit financial institutions? Chapter 17 >> C H E C K P O I N T

  10. Services offered • Savings accounts • Checking and payment accounts • Loans and other credit plans • Other services, such as safe deposit boxes • Safety • FDIC • NCUA • Convenience • Fees and charges • Restrictions Chapter 17 SELECTING A FINANCIAL INSTITUTION

  11. What factors should be considered when selecting a financial institution? Chapter 17 >> C H E C K P O I N T

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