FMGT55 – 1 Deposit Transactions

A. Banking: Depository and Lending Operations  Financial institutions can charge fees for the convenience of using ATMs
Automated Teller Machines (ATMs)
Types of Banking Services: (Categories Of Banking Services) - Computer terminal that allows a withdrawal of Cash from an account.
1. Deposit Debit card
2. Payment Services - Cash card that allows one to withdraw money or pay for purchases with a checking
3. Lending or savings account.
4. Other Financial Services D. Plastic Money
 Electronic payments
How to Manage Your Cash:  Online payments
 Stored-value cards
A. Financial Services for Short-Term Needs  Smart cards
•Daily purchases •Living expenses •Emergency Fund
a. Daily Needs b. Savings c. Checking c. Credit Card Evaluating Financial Services
- Check cashing - Regular savings - Regular checking ❓ Questions to Ask
- Automated teller account a account  Is a higher interest rate on a certificate of deposit worth giving up liquidity?
machines (ATMs) - Money market - Online payments (Dormant account/Dormancy – charges P300)
- Prepaid cards account - Automatic  Would you trade the convenience of getting cash from the ATM near your
Preauthorized office for lower ATM fees?
Payments  Is it worth opening a checking account that has no fees but does not earn
- Payment by interest, if you must keep a minimum balance?
phone
- Cashier’s checks DEPOSIT INSTITUTIONS
- Money orders  Commercial Banks
 Thrift Banks
B. Financial Services for Long-Term Needs  Universal Banks
•Major purchases. •Long-term financial security  Cooperatives
a. Savings b. Credit Services c. Investment d. Other Services
Services Commercial bank
- Certificates of - Cash loans for - Mutual funds - Tax preparation A for-profit institution that offers a full range of financial services, including checking,
deposit (CDs) cars, - Financial advice - Insurance savings, and lending.
- US. Savings - Education - Budgeting Savings and loan association (S&L)
Bonds - Home loans A financial institutional that traditionally specialized in savings accounts and mortgage
loans, but now offers many of the same services as commercial banks.
Cooperatives
Electronic Banking Services
A nonprofit financial institution that is owned by its members and organized for their
A. Direct Deposit
benefit.
- Saves time, money, and effort, safe
- automatic deposit of net pay to an employee’s designated bank account
NON-DEPOSITORY INSTITUTIONS
B. Automatic Payments
 Life Insurance Companies
 With authorization, funds are withdrawn from your account
 Investment Companies
 Make sure there are sufficient funds in your account
 Finance Companies
 Check your bank statement to make sure the transfer is correct
C. Automated Teller Machines (ATMs)
OTHER FINANCIAL BUSINESSES
 ATMs are used with a debit card
 Pawn shops
 A debit card is used with a PIN
FMGT55 – 1 Deposit Transactions
 Check cashing outlets EVALUATING SAVINGS PLANS
 Payday loans Factors affecting your selection of a savings plan
 Rent-to-own centers Rate of Return
– Compounding
COMPARING FINANCIAL INSTITUTIONS – Annual percentage rate (APR)
Where can you get the highest rate of interest on your savings? Inflation
Where can you obtain a checking account with low (or no) fees? Tax Considerations
Will you be able to borrow money from the institution—with a credit card Liquidity
Or another type of loan—when you need it? Safety
Do you need an institution that offers free financial advice? Restrictions and Fees
Is the institution PDIC member?
Does the institution have convenient locations? Rate of return
Does it have online banking services? Percentage of increase in the value of savings from earned interest
Does it have any special banking services that you might need?
Compounding
B. Savings Accounts and Payment Methods The process in which interest is earned on both the principal and on any previously
earned interest
Type of Account Benefits Drawbacks
Annual percentage yield (APY)
Regular savings accounts Low minimum balance. Low rate of return
- Amount of interest that a Php100 deposit would earn, after compounding, for one
Ease of withdrawal
year
Insured
Certificates of deposit Guaranteed rate of return Possible penalty for early
Types of Checking Accounts
(CDs) for time of CD withdrawal
Checking Accounts
Insured Minimum deposit
 Regular Checking Accounts
Money market accounts Good rate of return Minimum balance
 Checking Account with ADA
Some check writing No interest and possible
Insured service charge if below a  Interest-Earning Accounts
certain balance
U.S. Savings Bonds Low minimum deposit Lower rate of return when Evaluating Checking Accounts
Guaranteed by the cashed in before bond Restrictions Fees and Charges Interest Special Services
government reaches maturity date • Minimum balance • Monthly fee • Rates • ATM
Free from state and local • Number of • Printing, • Compounding • Telephone banking
taxes Transactions overdraft, • Online banking
• Stop-payment • Overdraft
TYPES OF SAVINGS PLANS fees protection
Three Limitations of a Certificate of Deposit (CD)
 Your money must stay in the account for one month to five or more years.
 You must pay a penalty for withdrawing your money early.
 There is usually a minimum deposit amount.

Certificate of deposit (CD)

- Savings alternative in which money is left on deposit for a stated period of time to
earn a specific rate of return
FMGT55 – 1 Deposit Transactions
Using a Checking Account  Prepaid Travelers Cards

Checking Accounts
- Restrictions
- Interests
- Fees and Charges
- Special Services

Banking Institutions and Your Money

Banks make money by making loans. The amount of money a bank can lend is
affected by the reserve requirement set by the Bangko Sentral.

Stop-payment order
- Request made to a bank or other financial institution to not cash a particular check.
* If a check is lost or stolen, you can ask the bank to issue a stop-payment order.

Endorsement - Signature of the payee.

Types of Endorsements
 Blank
 Restrictive
 Special

Information on Your Bank Statement

 Deposits
 Checks You Have Written
 ATM Withdrawals
 Debit Withdrawals
 Interest Earned and Fees

Bank reconciliation
- Report that accounts for the differences between a bank statement and a checkbook
balance.
* Use a bank reconciliation form to determine your true balance.

Other Payment Methods

 Certified Check
 Cashier’s Check
 Money Order
 Travelers Check