Financial Institutions & forms of payment

1. Personal Finance 4.02 Financial Institutions & forms of payment

2. A full service financial institution that offers a variety of services such as: • Checking • Savings • Loans and mortgages • Credit cards • Investments • Insured by Federal Deposit Insurance Corporation (FDIC) • Examples include Wells Fargo and Bank of America Commercial Banks

3. Originally specialized in providing funds to home buyers • Now they provide financial services as well such as: • Checking • Savings • Insured by Savings Association Insurance Fund (SAIF) part of the FDIC Savings and loan associations

4. Nonprofit financial cooperative owned and operated by its members Membership available to people of certain employers, unions, and/or community organizations, etc. Insured by National Credit Union Administration (NCUA) Offers same services as banks Credit unions

5. Licensed institutions that specialize in investments Buy and sell stocks, bonds, etc. Examples include Edward Jones and Fidelity Investments Brokerage firms

6. Benefits • Convenience • Cost savings • Safety and security • Types of Services • Accounts • Investments • Loans • Other such safe deposit boxes Traditional services

7. Benefits • 24-hour access • Fast, paperless, convenient • Worldwide access • Offers a variety of services • Services • ATM • Online banking • Direct deposits E-banking

8. Pay in full at time of purchase • Cash • No hidden costs • Convenient • May get lost or stolen • Personal check • More secure than cash through mail • Only uses by payee • Provides record of payment • Debit card • Online or at Point of Sale (in person) • Take precautions to protect against identity theft • Protect PIN # • Sign back of card and write “See ID” Forms of payment

9. Special use checks – available from most financial institutions, usually for a fee • Cashier’s check – bought at bank; guaranteed by bank • Certified check – personal check with guarantee form bank • Money order – convenient to send money through mail to people without access to a bank account • Traveler’s check – used in place of cash when traveling Forms of payment

10. Payment through credit • Open-end credit • Credit cards • Accurate record keeping • Convenient • High interest rates • May result in overspending • Closed-end credit • Installment loans • Car loans, student loans, mortgages • Secured loans – require collateral • Unsecured loans – no collateral but may need a co-signer • Borrows a set amount and repays with interest in regular installments Forms of payment