Activity 1.Where Do I Keep My Money? Activity 2.Evaluating Financial Services Activity 3.

Banks, Yesterday and Today

ACTIVITY 1

Where Do I Keep My Money?

Overview

The functions of banks The cost of alternative financial services The stability of banks
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Introduction to Financial Services - Activity 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?
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Bed & Mattress Cookie Jar Pillow Wallet Money Belt Small House Safe
Slide 1 - Places to Save Money Lesson Reference: Introduction to Financial Services, Activity 2 Overhead 1

ALTERNATIVE FINANCIAL SERVICES

Check-Cashing Services Check-Deferrals, Cash Advances, Payday Loans

Pawn Shops Rapid Tax Refunds Rent-to-Own Other Financial Services

Slide 2 - Alternative Financial Services Lesson Reference: Introduction to Financial Services, Activity 1 Handout 1

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.
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Slide 3 FDIC Lesson Reference: Introduction to Financial Services, Activity 1 Overhead 2

Evaluating Financial Services

Overview
Formal and informal financial services Costs of alternative financial services and average bank accounts Advantages of establishing a banking relationship

ACTIVITY 2

Introduction to Financial Services Activity 2

FORMAL FINANCIAL 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

Slide 1 Formal and Informal Financial Services Lesson Reference: Introduction to Financial Services, Activity 2 Overhead 1

HOW A BANK CAN SAVE YOU MONEY

Monthly Fees without a Bank
$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 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: $98.81 Annual cost: $1,185.72

Monthly cost: $5.00 Annual cost: $60.00

Annual Savings by Using a Bank: $1,125.72

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Slide 2 How a Bank Can Save You Money Lesson Reference: Introduction to Financial Services, Activity 2 Handout 2

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
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Slide 3 Advantages of a Banking Relationship Lesson Reference: Introduction to Financial Services, Activity 2 Overhead 2

Banks, Yesterday and 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
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Introduction to Financial Services - Activity 3

ACTIVITY 3

TRADITIONAL SERVICES OF BANKS

Checking Accounts Savings Accounts CDs (Certificates of Deposit) Savings Bonds Loans Car Home Personal Safe Deposit Boxes

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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

EXPANDED SERVICES OF BANKS

Insurance Sales Small Business Advising and Loans Investments Credit Cards Remittances

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Slide 2 - Expanded Services of Banks Lesson Reference: Introduction to Financial Services, Activity 3 Overhead 2

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.
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Slide 3 - Financial Services Modernization Act Lesson Reference: Introduction to Financial Services, Activity 3 Overhead 3

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.
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Slide 4 - Some Community-Related Services Lesson Reference: Introduction to Financial Services, Activity 3 Overhead 4