Download Financial Institutions

Personal Financial Literacy
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Chapter 5 Supplemental Activity
Financial Institutions
Banks, credit unions, savings banks, and savings and loans are competitors. As a banking
services customer, you will want to know the differences between these organizations. They
provide choices for you in terms of both services and costs.
Banks
Banks are profit-seeking businesses. They provide a variety of services to customers, from
checking accounts to financial advice. Banks tend to have many customers and offer many ATM
locations. Banks may be chartered by the federal government or by a state. Both types of banks
are controlled by the Federal Reserve System. Banks are often called commercial banks.
Accounts at banks are insured by the Federal Deposit Insurance Corporation (FDIC). This
insurance is for up to $100,000 per depositor per bank. You can learn more about the FDIC at its
Web site. A link to the Web site is provided on the Web site for this textbook.
Credit Unions
A credit union is owned by the people who use its services. These people are called members.
Credit unions serve member groups based on where people work, live, or go to church or school.
Credit unions are not-for-profit organizations. They provide a safe place for members to save
money and get loans at good rates. Deposits are insured for up to $100,000. There are more than
9,000 federal and state credit unions.
Credit unions are regulated by the National Credit Union Administration (NCUA). This is an
agency of the federal government.
Savings Banks
In many states, savings banks exist for the main purpose of accepting deposits and making loans.
They may provide other banking services, such as checking accounts. These organizations are
not considered full-service banks. They often offer a higher rate of interest on savings deposits
than banks offer. Savings banks are insured by the FDIC.
Savings and Loan Associations
Savings and loans (S&Ls) are in business to accept savings deposits and make mortgage loans.
They often pay higher rates on savings than do commercial banks. Deposits from customers are
invested in the real estate mortgage market. This enables people to purchase and remodel homes.
In the United States, a significant percentage (almost half) of home loans are made by S&Ls.
These institutions are often known as thrifts. Accounts at S&Ls are insured by the FDIC.
Personal Financial Literacy
Directions
Look in the phone book yellow pages under “banking.” List all of the financial institutions
(commercial banks, credit unions, savings banks, or thrifts) in your area. In groups, visit these
organizations online or in person. Find the following information:
1. List the types of checking and savings accounts that are offered.
 Checking (what kinds, minimum deposits, monthly fees)
 Savings
2. List the bank cards that are available to qualifying customers.
 ATM/debit cards
 Credit cards
 Other
3. List the other services that are offered (and costs).
 Loans
 Car buying
 Investment advice
 Investment center (where you can buy)
 Cashier’s checks
 Safe deposit boxes
 Other (list)
4. Pick up brochures or print Web pages that describe services and fees. How do they compare
among the institutions in your area?
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