Financial Service Providers
SELECT YOUR OWNFINANCIAL SERVICE PROVIDER
1©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
PreviewToday we will answer these questions:• Where can I cash my paycheck?
• What is the difference between a bank, credit union, and check cashing business?
• What do I need to know about using banking services?
• How do I decide where to do my banking?
Use what you learn todayto select a financial service provider.
2©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
What’s the Difference?
3©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Teach Your Peers
• Describe the financial service business– Share description in one or two sentences– Reference at least one local example
• List typical consumer finance services
• Explain how consumers use the services– Explain in 30-60 seconds– Give examples of how teens use services
4©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Read the Fine Print
• Do you think the fees and fee conditions are reasonable?
• Be prepared to share your findings with the class.
5©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Payday Loan• Customer leaves post-dated check with lender
– Fill out application– Leave a check to cover principal (amount borrowed) and fee– Must be employed and must have bank account– Must be at least 18 years old
• Customer receives borrowed amount
• Customer decides options by due date:– Instruct lender to deposit post-dated check– Pay cash and reclaim post-dated check– Renew loan
• Customer pays fees– High interest– Additional fees for “bounced” check
6©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Payday Loan … Good Choice?
What are other options rather than using payday loans?
7
Principal Time Interest APRTotal Owed
$500 (rent) 2 weeks 15%
$300 (car loan) 4 weeks 12%
$1,000 (household and credit card bills)
2 weeks 10%
Principal Time Interest APRTotal Owed
$500 (rent) 2 weeks 15% 390% $575
$300 (car loan) 4 weeks 12% 156% $336
$1,000 (household and credit card bills)
2 weeks 10% 260% $1,100
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Services That Matter
Life Style
• In-person or ATM deposits and withdrawals
• Online or mobile banking
• Convenient hours
• Convenient location
• Number of branch locations
• Other services (overdraft, automatic savings programs, alerts/reminders, etc.)
Fees and User Requirements
• Minimum opening deposit
• Required monthly balance
• Overdraft fees
• ATM fees
• Penalties and withdrawal limitations
• Monthly maintenance fee
• Interest rates
8©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Challenge
5-B: Which is Best for Me?Use the DECIDE steps to select a
financial institution with servicesthat are right for you.
9©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
Reflection
Where do you keep your money now and why?•Is it safe?•Is it growing?•Can you track it?
10©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers