Download Banking Services

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All the available in the U.S.
M1
◦ Liquid Money (Easy Access)
◦ 44%= Currency, money not in an account
◦ 55%= Checking Accounts
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M2
◦ M1 + Near Money (Interest Bearing)
◦ Exp. Savings Accounts, CD, Money Market
Storing Money
1.
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Saving Money
2.
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3.
Safe place to keep money
Savings, Checking, Money Market, CDs
Loans (More money out than in)
◦ Lending helps economy function, money in hands
of consumers increases demand, money in
investors’ hands leads to more businesses
◦ Banks loose money if borrowers default on loans,
do not pay back
Mortgages
4.
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Loan to buy real estate
Down Payment, minimum of 20% to avoid
insurance fees
Period of time, usually 30 years
Credit Cards
5.
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Interest Based Loans
bank lend at time of purchase and consumer
repays in bill
1.
2.
3.
4.
Interest = price paid to use borrowed
money
Principal = initial amount of borrowed
money
Simple interest is only applied on the
principal
Compound interest is applied to both
principal and accumulated interest
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Commercial banks
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Savings and Loan Associations
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Savings Banks
◦ Traditionally provided services to businesses
◦ Offer checking, savings, and loans
◦ Some state chartered others are national
◦ Traditionally just savings accounts and loans
for homes
◦ Thrifts- loans for working class people
◦ Offered savings and checking accounts for
people with less deposits than commercial
banks
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Credit Unions
◦ Co-ops that specialize in lending and some
offer checking accounts
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Finance Companies
◦ Offer consumer installment loans for large
cost items
◦ Higher rates due to better chance of defaults
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Automated Teller Machines
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Debit Cards
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Home Banking
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Automatic Clearing Houses
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Stored Value Cards
◦ Replaces the need for some tellers
◦ Able to withdraw money from a checking account
from ATM or purchase goods at stores with an
‘electronic check’
◦ Internet banking, paying bills and other banking
services
◦ Regular payments in place of writing physical
checks for bills
◦ Pre-paid cards, electronic gift cards, rebate cards