Banks

1
Banks
2
How Banks Work

• The term bank in a general sense, refers to any
  type of financial institution where you may
  deposit money.
• Consumers look to banks as secure places to save
  money, obtain credit, and withdraw cash.

3
What is interest??

• Interest-a fee paid for the opportunity to use
  someone elses money over a period of time.
• Can it be good or bad??

4
What do Banks Offer?

• savings account
• loans
• checking accounts
• safe deposit boxes
• investment and financial planning.

5
3 Functions of Banks

• Accept money
• Transfer Money
• Create Money

6
Types of Deposits

• Demand deposit-checking account
• Time deposit-savings account

7
Types of Banks

• Commercial Banks
• Mutual Savings Banks
• Savings and Loans
• Credit union

8
Commercial Banks

• Most banks in the United States are commercial
  banks.
• Provide a large range of services.
• Receive their charter to accept and transfer
  money and to make loans from either the state or
  federal government.

9
Mutual Savings Banks

• State-chartered financial institutions.
• Profits are either paid to depositors as interest
  or held in reserve.
• Offer savings accounts, checking accounts, money
  market deposit accounts (MMDAs) and certificates
  of deposit (CDs).

10
Savings Loans

• Originated for home buyers, but now offer a
  variety of services.
• Accept deposits and transfer and lend money.
• Interest rates tend to be a little lower than
  commercial banks.
• Most of their business comes from individuals and
  families rather than businesses. State and
  Federal chartered

11
Credit Union

• A nonprofit financial institution
• Members have a common bond-work in same place,
  belong to a labor union, live in same community.