chapter 10 section 3. service 1: customer can store money banks store currency safely insured...
TRANSCRIPT
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MONEY AND BANKINGChapter 10 Section 3
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Innovations in Modern Banking
Service 1: Customer Can Store Money Banks store currency safely
Insured against failure Safety deposit boxes
Service 2: Customers Can Earn Money Paying interest on savings accounts Money market accounts and CDs pay more interest
Service 3: Customers Can Borrow Money Banks lend money through fractional reserve
banking Bank loans to approved customers Credit card purchases are loans
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Banking Deregulation
Government regulated interest rates 1980’s, 1990’s, deregulation ended restrictions Led to mergers, interstate banking Advantages
More competitive More services More branches
Disadvantages Fear of larger banks
Financial Services Act of 1999 lifted remaining bank restrictions Fear of larger banks
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Technology and Banking
Technology has led to electronic banking Automated teller machines (ATMs)-use special
cards Customers make transactions without bank officers Linked to bank’s computer network Need PIN
Debit Cards-used to withdraw cash or make purchases Linked to bank account Use at ATMs and stores
Stored-value cards-represent money holder has on deposit with issuer Pre-paid cards
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Internet Banking
Online deposits, Direct deposits Transactions reviews Statement review