Introduction to Financial Services: Activities on Money Management, Evaluating Financial Services, and Banks

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 • Cheque-Cashing Services • Cheque-Deferrals, Cash Advances, Payday Loans • Pawn Shops • Rapid Tax Refunds • Rent-to-Own • Other Financial Services 4

5. Slide 3 – CDIC Lesson Reference: Introduction to Financial Services, Activity 1 – Overhead 2 • CANADA DEPOSIT INSURANCE • CORPORATION (CDIC) • Established in 1967 by Parliament, CDIC was incorporated as a Crown corporation. • Insures most Savings, Chequing, GICs, 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 • Cheque 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* • $10 monthly base service charge • $0 to directly deposit paycheque • $0 to get cash from bank's ABMs or make debit card purchase • $0 to pay monthly bills using electronic bill payment • $5 to send money to family • Monthly cost: $15.00 • Annual cost: $180.00 • $80 to cash paycheques • $4.16 on money orders and stamps to pay bills • $20 to send money to family with a wire transfer company • Monthly cost: $104.16 • Annual cost: $1,249.92 Annual Savings by Using a Bank: $1,069.92 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 • Chequing Accounts • Savings Accounts • GICs (Guaranteed Investment Certificates) • Canada Savings Bonds • Loans • Car • Home (mortgages and home equity loans) • 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 • Chequing Accounts • Savings Accounts • GICs (Guaranteed • Investment Certificates) • Canada Savings Bonds • Loans • Car • Home (mortgages and home equity loans) • Personal • Safe Deposit Boxes • EXPANDED • SERVICES • OF BANKS • Insurance Sales • Small Business Advising and Loans • Investments • Credit Cards • Remittances 12

13. Slide 3 – Bank Act Reform 2001 Lesson Reference: Introduction to Financial Services, Activity 3 – Overhead 3 • BANK ACT REFORM 2001 (BILL C-8) • Eliminated many restrictions among banks, but also put in place a new review process for bank mergers. • Results? • Banks are required to open accounts for individuals without demanding a minimum deposit or that the individual be employed. • Financial institutions are also required to cash government cheques for non-customers, with a minimum form of identification. • Banks are required to make a low-cost account available to consumers. 13

14. Slide 4 - 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. • Banks organize fund-raising events, such as “Run For the Cure.” • Bank branches participate in fundraising for many community • organizations, such as children’s hospitals. 14