FIN 420 - Week 2 - DQ 2

FIN 420 - Week 2 - DQ 2 - interest on checking accounts now...

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Many different types of financial institutions exist. Differentiate between deposit institutions and non-deposit institutions. Provide two examples of deposit and non- deposit financial institutions with a brief explanation of each. How can you use each of these financial institutions to manage your cash flows and develop or enhance your personal financial plan? There are many types of financial institutions falling into two categories deposit and non-deposit institutions. The deposit institutions are banks and credit unions which take in deposits and help their customers to save their money in either savings, checking, or money market accounts that are interest-bearing or non- interest bearing. Most savings and money market accounts are interest-bearing, an incentive to keeping deposits at that institution, and many checking accounts are non-interest-bearing. However, many financial institutions are offering
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Unformatted text preview: interest on checking accounts now to be more competitive. Non-deposit institutions are financial institutions that take payments in return for a service rather than providing only interest such as insurance companies, pension funds, and securities firms. These non-deposit institutions take premiums and cash from customers and provide peace of mind in the form of life insurance or retirement benefits in the form of pensions, just to name a few. Each of these types of financial institutions help one to develop their personal financial plan because the deposit institutions help people to grow their earnings on money that they need readily available where the non-deposit institutions help people to plan for the future by enabling protection in the event of a tragedy or upon their retirement....
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This note was uploaded on 02/26/2012 for the course FIN 102 taught by Professor Franks during the Spring '12 term at University of Phoenix.

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