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Banking And Credit Project
Transcript of Banking And Credit Project
Automatic payments occur when you give authorization to your bank to withdraw the amount of your monthly payment or bill from your account.
Plastic payments are usually when you purchase something with a debit card, prepaid cards or gift cards, and electronic cash. Insures each account in a federally charted bank up to $100,000 per account.
It's purpose is to protect deposits in banks. To make sure it's safe and you won't lose your money. Deposit Institutions handle people's banking needs. Some examples would be commercial banks, savings and loan associations, and mutual savings banks.
Non-Deposit Institutions are for your other financial needs not found in banks. Some examples would be life insurance companies, investment companies, and mortgage companies. Regular Savings Account
Little to no minimum balance.
Can withdrawal and deposit money on demand.
Low interest rate.
It's hard to earn money fast. There is not enough security. The Number One Issue of Online Shopping Savings is a safe storage of funds for future use. There is little or no limit to how much money you need to leave in your account.
Payment services are the transferring of money from a personal account to businesses or individuals for payments. The most common one used is a checking account, which means you are paying with your own money.
Borrowing can be done by short term or long term. Using a credit card and taking out a personal cash loan, are examples of short term borrowing. Long term examples would be taking out a car loan or a mortgage on your house. Financial Services Long Term Services:
Mutual Fund Investment Accounts
Financial Planning Services
Auto Loans Financial Services Offered By A Bank Short Term Services:
Personal cash Loans You are liable for nothing most of the time.
You need to notify your bank within two days of losing the card.
If you fail to do so you might be held responsible for up to $500 for its unathorized use for up to 60 days. If Debit Card is Lost Or Stolen Online Point Sale Transactions
Use a pin to authorize the payment.
Money is transferred from your account instantly. Offline Point Sale Transactions
Do not require a pin.
Funds are deducted from your account within a day or two. The FDIC was created by the Banking Act of 1929. This occurred because right before the Great Depression everyone was pulling money out of the bank so they wouldn't lose their money. By doing so the banks went bankrupt because they didn't have all the money to meet the demands. Federal Act Certificates of Deposit
Longer it's in the more money you get.
Higher interest rate than regular savings accounts.
Has to stay in longer.
There is a minimum deposit. Money Market Accounts
High interest rates.
High minimum amount.
Have to pay fees if lower than minimum. US Savings Bond
You only pay half of what your bond will earn if you leave it in long enough.
You can choose how much you wanna spend.
If you take the bond out early you won't get interest for the past three months.
You can only buy them online. 1) How To Evaluate A Savings Plan Types of Financial Institutions Consider the rate of return, inflation, tax considerations, liquidity, restrictions, and fees Evaluating A Savings Plan Rate of Return: the percentage of increase in the value of you savings from earned interest. You would want a higher percentage for more money.
Compounding: the process in which is interest is earned on both the principal and on any previously earned interest. Depending on the banks rate at which it's compound determines how much you will make.
Annual Percentage Rate: the amount of interest that a $100 deposit would earn, after compounding, for one year. You want that bank you choose to offer you more interest.
Inflation: If the inflation goes up you could lose value on your money.
Tax Considerations: You don't want to pay taxes on money you are earning. So you should consider looking into tax-exempt and tax-deferred savings plans
Liquidity: Determine whether there is a penalty cost for taking money out early, if you are considering withdrawing your money easy put it in a liquid account.
Restrictions and Fees: Beware of any fees or restrictions on savings plans. Such as delay on your interest that you earn. Check to see if there are fees when you deposit or withdrawal your money. The Importance of Considering These Factors Costs and Benefits of Checking Accounts Blank endorsement least is when you or the check holder signs the back of the check.
Restrictive endorsement requires the check holder's signature and a restriction on how the paper may be used by the bank.Most common expression used is "For deposit only." This would be the safest because you are giving direct orders.
Special endorsement allows you to transfer a check to an organization or another person. On the back of the check you write "pay to the order of." This is the least safest because if anyone finds a check they can write pay to the order of on the back, then in turn they would get the money. Check Endorsements Regular checking accounts don't usually require a minimum balance, but if they do it's a small one.
Interest earning checking accounts pay interest for a minimum balance when maintained.
Activity accounts have no minimum balance but charge fees for depositing and taking out money with an additional fee at the end of the month. Different Types of Checking Account Check 21 Regular Checking Accounts
Usually do not require a minimum balance. Interest earning checking accounts
Combination of checking and savings accounts.
Pay interest if you maintain a minimum balance. The Act allows banks to dispense with original paper checks. Banks can now transmit electronic images of checks through the check-clearing process. If you want to receive you canceled paper check, the bank will provide a substitute check , such as a printout of an electronic image, for a fee. You should always keep track of your checking account just in case things don't match up on your bank's balance and your balance.
To check that your checking account and financial institution are the same you would use a bank reconciliation.
It's important to use a reconciliation to make sure that you're not paying for something you shouldn't be or that your math is done right. Keeping Track Of Your Checking Account