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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Banking and Financial Services17-117-1 Banks and Other Financial
Institutions
17-217-2 Financial Services and Electronic Banking
17-317-3 Checks and Payment Methods
1717
Chapter 17
Slide 2Introduction to Business
© Thomson South-Western
LESSON 17-1
Banks and Other Financial Institutions
Goals Explain the purpose of the Federal
Reserve System. List the types of financial institutions. Discuss factors for selecting a financial
institution.
Chapter 17
Slide 3Introduction to Business
© Thomson South-Western
Key Terms
Federal Reserve System (Fed) commercial bank credit union Federal Deposit Insurance Corporation
(FDIC)
Chapter 17
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THE BANKING SYSTEM
The Federal Reserve System (Fed) Federal Reserve activities Banking and the economy
Chapter 17
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>> C H E C K P O I N T
What is the main purpose of the Federal Reserve System?
Chapter 17
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TYPES OF FINANCIAL INSTITUTIONS Deposit institutions
Commercial banks Savings and loan associations Mutual savings banks Credit unions
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TYPES OF FINANCIAL INSTITUTIONS Non-deposit financial institutions
Life insurance companies Investment companies Consumer finance companies Mortgage companies Check-cashing outlets Pawnshops
(continued)
Chapter 17
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>> C H E C K P O I N T
What are some examples of non-deposit financial institutions?
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SELECTING A FINANCIAL INSTITUTION Services offered
Savings accounts Checking and payment accounts Loans and other credit plans Other services, such as safe deposit boxes
Safety Convenience Fees and charges Restrictions
Chapter 17
Slide 10Introduction to Business
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>> C H E C K P O I N T
What factors should be considered when selecting a financial institution?
Chapter 17
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LESSON 17-2
Financial Services and Electronic Banking
Goals Identify the financial services used by
consumers. Explain types of checking accounts. Describe electronic banking activities.
Chapter 17
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Key Terms
safe-deposit box service charge debit card
Chapter 17
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TYPES OF FINANCIAL SERVICES Savings services Payment services Lending services Electronic banking Storage of valuables Investment advice Management of trusts
Chapter 17
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>> C H E C K P O I N T
What are the main financial services used by consumers?
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TYPES OF CHECKING ACCOUNTS Regular checking accounts Interest-earning Checking accounts Special checking accounts
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COMPARING CHECKING ACCOUNTS Minimum balance Interest rate earned, if any Monthly service charge Fees for other services, such as
printing checks and stop payment orders
Other restrictions
Chapter 17
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>> C H E C K P O I N T
What are three main types of checking accounts?
Chapter 17
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ELECTRONIC BANKING
E-banking services Automatic teller machines Payments at the point-of-sale Direct deposit Automatic bill payments
Chapter 17
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ELECTRONIC PAYMENTOPTIONS Debit card transactions Online payments Stored-value cards Smart cards
Chapter 17
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BANKING IN THE FUTURE
Financial services combined with wireless technology
Personalized systems for obtaining, transferring, and using funds
Chapter 17
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>> C H E C K P O I N T
What are common electronic banking services?
Chapter 17
Slide 22Introduction to Business
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LESSON 17-3
Checks and Payment Methods
Goals Describe three main types of
endorsements. Describe proper check-writing
procedures. Explain the bank reconciliation process. Identify other payment methods.
Chapter 17
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Key Terms
endorsement check register stop payment order bank statement bank reconciliation outstanding checks
Chapter 17
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OPENING A CHECKING ACCOUNT Benefits of checking accounts
Convenience and ease of making payments
Safety to make payments with less risk than using cash
Proof of payment A record of finances for managing your
money
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THE FIRST DEPOSIT
Signature card Joint account Deposit slip
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SIGNATURE CARD
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TYPES OF ENDORSEMENTS Blank endorsement Full endorsement Restrictive endorsement
Special endorsement Two signatures required Restrictive endorsement
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SAMPLE ENDORSEMENTS
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>> C H E C K P O I N T
What are the three types of endorsements?
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USING A CHECKING ACCOUNT Check-writing procedures
Elements of a check The check register Writing a check Proper check writing
Stopping payment
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PARTS OF A CHECK
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>> C H E C K P O I N T
What is the purpose of a check register?
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THE RECONCILIATION PROCESS Bank statement information Determine checks paid Find differences Calculate adjusted balance
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MONTHLY ACCOUNT STATEMENT
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RECONCILIATION FORM
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>> C H E C K P O I N T
What are causes of differences between the bank statement balance and a person’s check register?
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OTHER TYPES OF PAYMENTS Certified checks Cashier’s checks Traveler’s checks Money orders
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CERTIFIED CHECKS
Personal check for which a bank has guaranteed payment
Certification stamped on face Signed or initialed by a bank officer
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CASHIER’S CHECKS
Check that a bank draws on its own funds
Costs the amount of the check plus a service fee
More acceptable than the personal checks
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TRAVELER’S CHECKS
Special forms designed for making payments when away from home
Require your signature in two places Cash a check or pay for a purchase Commonly accepted throughout the
world
Chapter 17
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MONEY ORDERS
Form of payment that orders the issuing agency to pay the amount printed on the form to another party
A bank money order A postal money order An express money order A telegraphic money order
Chapter 17
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>> C H E C K P O I N T
How does a certified check differ from a cashier’s check?
