4.10E Financial Institutions

Purpose of Financial Institutions

Open Ended

What does a bank do?

Financial Institutions

Three Basic Purposes

• Keeps customers' money safe

  • Money deposited into a bank is insured by the FDIC (Federal Insurance Corporation)

• Borrow money from customers

• Lend money to customers for large purchases for a fee

Table Talk:

Discuss at your tables and be ready to share.

• Why do you think banks need people to deposit their money?

• Why is it safer to store your money at a bank or credit union than a piggy bank?

Multiple Choice

Which of these services is NOT provided by a financial institution such as a bank or credit union?

• Informing customers of the amount of money in their accounts.

• Informing customers of how the money in their accounts must be spent.

• Providing cash when customers make withdrawals from their accounts.

• Providing loans to customers that can be paid back over time with interest.

Multiple Choice

Which statement describes a primary service of a bank?

• Banks offer checking and savings accounts to their customers

• Banks help customers decide which expenses to pay.

• Banks help customers meet their neighbors.

• Banks sell stamps and deliver mail.

Multiple Choice

Raina sold pens decorated with fancy tape.

-Raina's expenses were $11.57 for supplies.

-Raina sold 12 pens for $2 each.

What was Raina's profit?

• $24.00

• $35.57

• $12.43

• $2.43