money 101 | finance-lectures.com1 banking and transactions daniel folkinshteyn, phd ...

Money 101 | finance-lectures.com 1

Banking and Transactions

Daniel Folkinshteyn, PhDhttp://finance-lectures.com/personal@finance-lectures.com

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Learning objectives

Describe the role of transactional financial institutions and services

Explain the function of checking accounts and checks

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Banks

Financial intermediaries

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Bank services

Transactional Savings/Safekeeping Investment Loans/credit Currency exchange Advisory/reporting Commercial

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Transactional services

Deposit/Checking account Check writing/clearing Debit card Bank wire ACH (automated clearing house) ATM (automated teller machine) Bill pay (ACH)

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Checking accounts and checks

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Check transaction

Alice Bob

Check clearing

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Quiz 1

What if someone writes you a check for $500, but they only have $400 in their account at the time?

A: you get $400

B: you get nothing

$400

$500

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Bounced check

Alice Bob

bad check

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Debit cards

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Bank wire and ACH

Alice Bob

Wire: Same or next day Costly, $20-$50,

on each side International

payments Forms usually

required

ACH: 3-4 business days Free U.S. domestic

payments only Easy setup via

bank website, online bill pay

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ATM

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Online banks

"brick and mortar" bank online bank

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Additional reading

https://en.wikipedia.org/wiki/Transaction_account

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Attributions

All images, unless otherwise noted, are sourced from pixabay.com or Wikimedia Commons, and are licensed under CC0, public domain.

Image of Jefferson check, sourced from Wikimedia Commons, by National Numismatic Collection at the Smithsonian Institution, CC-BY-SA 3.0.

Image of personal check sample, sourced from Wikimedia Commons, by Sergio Ortega, CC-BY-SA 3.0.