If you have seen the movie It’s a Wonderful Life, you may remember that all of the people in the town race down to the bank to withdraw all of their money at one time. So, what happened? Did they all receive the money that was in their accounts? No. Why not? George tries to explain to them that all of their money is not just sitting in that particular bank's vault. The bank actually takes the money you deposit and lends it out to other individuals. How does this all work? How banks function is what this module is all about.

Financial institutions are businesses that offer services such as checking and savings accounts, car loans, credit cards, home mortgages, retirement plans, and investment services. These institutions help people manage, protect, and even increase their money. You may use different types of financial institutions at different points in your life: commercial banks, savings and loan associations, credit unions, and financing companies. Each company can offer different services that benefit you in a unique way. Get ready to learn about the various companies and how they can meet your needs.

In addition to knowing which institutions offer what services, you need to know the services available to you. What bank account is best for you? How do you open an account? What fees are associated with banking services? All of these questions will be answered in this module. You will also learn the importance of reconciling your checkbook to prevent overdrawing your account and catch any errors the bank might make, as well as learn the advantages of online banking.

Pre-Assessment

Take a moment to discover how much you already know about your banking needs. Click the player button to get started.

 

 

Key Vocabulary:

To view the definitions for these key vocabulary terms, visit the course glossary.

Automatic Teller Machine (ATM)	Debit card	M1	Required reserve ratio
Bad check	Deposit Slip	M2	Restrictive Endorsement
Bank	Deposit	National Credit Union Administration(NCUA)	Special Endorsement
Blank Endorsement	Electronic Funds Transfer (EFT)	Non-sufficient funds (NSF)	Stale Check
Check	Endorse	Outstanding Checks	Stop payment
Check Register	Federal Deposit Insurance Corporation (FDIC)	Overdraft Protection	Statement
Checking account	Federal Reserve	Payee	Withdrawal
Cleared Check	Forged check	Personal Identification Number (PIN)
Credit Union	Interest	Reconciling