Financial Institutions Lesson Plan

1.7.3
Financial Institutions
Grade Level 9-12
“Take Charge of Your Finances”
Time to complete: 100 minutes
National Content Standards
Family and Consumer Science Standards: 2.1.2, 2.3.1, 2.4.1, 2.5.4, 2.6.1, 3.3.1, 3.3.4, 3.5.3
National Council on Economic Education Teaching Standards: 10, 11
National Standards for Business Education
• Career Development:
• Economics: III.2, VII.1
• Personal Finance: VI.1
Objectives
Upon completion of this lesson, students will be able to:
• Describe the different types of financial institutions.
• Identify the benefits of different financial institutions.
• Explain the services offered by financial institutions.
• Compare financial institutions.
Introduction
An important element in money managment is choosing the correct financial institution to meet an individual’s
needs. Financial institutions are businesses which offer multiple services in banking and finance. The services
customers receive may include savings and checking accounts, loans, investments, and financial counseling. The
benefits consumers gain by using financial institutions includes convenience, cost savings, safety, and security.
It can be in the consumer’s best interest to research financial institutions and to use one institution for all their
financial needs. The advantages to choosing one institution include building a relationship, the simplicity of having
all accounts in one place, and possibly lower interest rates on loans. Financial institutions are more willing to offer
loans with lower interest rates to loyal customers.
Different types of financial institutions are available.
• Depository institutions offer banking services and loans to individuals and businesses.
o Although they can be referred to as banks in general, each is a distinct type of institution.
o Depository institutions include:
• Commercial banks – also known as full-service banks because they offer the wide variety of
services and products available including checking and savings accounts, loans, credit cards,
investments, and advice; operate under state and federal laws; usually the largest banks;
insured by the FDIC.
• Savings & loan associations (S & Ls) – focus on providing loans and mortgages to
customers who hold a savings account; insured by the SAIF; generally pay a higher interest
rate than commercial banks; provide interest earning checking accounts.
• Credit unions – a non-profit cooperative institution owned by its members; members
usually have a common bond; insured by the NCUA; usually charge lower fees and loan
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 1
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3
rates and offer higher interest rates than commercial banks and S & Ls; many offer free
financial counseling; accounts offered include share, share draft, and share certificate
accounts.
• Brokerage firms are licensed institutions which specialize in investing. They offer money management
plans to buy and sell stocks, bonds, and other cash investment opportunities through cash management.
Insurance for Financial Institutions:
The Federal Deposit Insurance Corporation (FDIC) is a federal government agency which insures federally
chartered commercial banks against loss. The Savings Association Insurance Fund (SAIF) provides insurance for
savings & loan associations and is a branch of the FDIC. The National Credit Union Administration (NCUA)
provides insurance protection for credit unions. Each depositor is insured up to $100,000. If the institution is
insured, it will be posted in view for the customer to see. Customers should choose a FDIC, SAIF, or NCUA
insured financial institution for protection against the risk of loss.
Services of Financial Institutions:
• Bond—Lending money to an organization as an investment.
• Certificate of Deposit—An insured interest earning savings instrument with restricted access to the
funds.
• Checking Account—Paper checks or debit cards are used to withdraw money deposited into the
account to pay for items. They may be non-interest bearing.
• Credit Card—A card used to make a purchase now and must be repaid later.
• Financial Counseling–Information and advice is given to customers to help them make decisions about
financial issues.
• Investment—A commitment of money to achieve long-term financial goals.
• Loan—Borrowed money members apply for to be paid back at various interest rates.
• Mortgage—A loan to purchase real estate.
• Mutual Fund—Groups of stocks, bonds, and other investments managed by an investment firm.
• Real Estate Investment—Purchase real estate as an investment to gain a profit.
• Retirement Plan Account—Plans to set aside money for retirement. Money is tax-deferred until
withdrawn.
• Safe-Deposit Box—A secured box in a bank to be used for valuable and important personal items.
• Savings Account—Money is deposited into an account to earn interest.
• Share Account—A savings account at a Credit Union.
• Share Certificate Account—A certificate of deposit (CD) at a Credit Union.
• Share Draft Account—A checking account at a Credit Union.
• Stock—Ownership, represented by shares, in a corporation.
In this lesson, the students learn about different types of financial institutions, the benefits of using them, and the
services offered. Students learning will be reinforced when they complete an activity matching financial
characteristics to financial institutions.
*Note to teacher: Services are discussed more in-depth in other lessons. This is just a quick overview to introduce
the services to the students.
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3
Body
1. Students should read the Financial Institutions information sheet 1.7.3.F1 the night before as homework to
be prepared for the activity.
2. Ask the students how many currently use a financial institution such as a bank. Ask how they chose to use
the financial institution they are currently using.
3. Tell the students today’s discussion is on financial institutions, services, and benefits.
4. Discuss the types of financial institutions, benefits, and services offered by using the Financial Institutions
PowerPoint presentation 1.7.3.G1.
a. The Financial Institutions Review worksheet 1.7.3.A2 to accompany the Financial Institutions
PowerPoint presentation 1.7.3.G1 is available for students to complete during or after the
presentation.
b. OR – The Financial Institutions Review worksheet 1.7.3.A2 which accompanies the presentation
may be used in conjunction with the Financial Institutions information sheet 1.7.3.F1. All
questions may be answered by reading it. Students could fill out the worksheet according to the
information sheet if they missed the PowerPoint presentation.
c. OR – The Financial Institutions Review worksheet 1.7.3.A2 may be used as a quiz to ensure the
students read the information sheet.
5. After the PowerPoint presentation, proceed with the following activity.
6. Class Activity –
a. Directions:
i. Divide the students into teams of three.
ii. Each team begins with a $50.00 savings account and one set (four) of Financial Institutions
game cards 1.7.3.H1 stating commercial bank, savings and loan, credit union, and brokerage
firm.
iii. The teacher needs to have extra play money and one set (22) of Financial Institutions
statement cards.
iv. The teacher begins the game by reading a statement card describing a financial service. The
students determine as a team which financial institution offers the service and they hold up
their card. Some statement cards list a service offered at more than one financial institution.
If so, students should hold up the game cards for all financial institutions pertaining to the
service listed on the statement card.
v. If the teams are correct, they receive $5. If a statement card has multiple correct answers
and the students hold up all of the correct game cards, they receive $5 for each answer.
vi. If the students answer the question incorrectly, the team needs to give the teacher $10 from
their savings account for each incorrect answer.
vii. The group with the largest savings account wins.
viii. During the activity, students may complete the Statements for Financial Institutions
worksheet 1.7.3.A1 indicating which service was available at what financial institution(s) to
have a study guide –OR- it could be used as after the activity (see below).
b. OR - For an individual activity, provide each student with a Statements for Financial Institutions
worksheet 1.7.3.A1. Read the statement cards out loud and have students check which institution
is described by the statement card.
7. OR - The Statements for Financial Institutions worksheet 1.7.3.A1 could be used as a final conclusion after
the activity has been completed.
Conclusion
Students could complete the Area Financial Institutions worksheet 1.7.3.A3 to research local financial institutions
which gives students the opportunity to learn what is available in their area and to learn how to research financial
institutions in a new area if they relocate.
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3
Assessment
Students are assessed by playing What’s What in Banking 1.7.4 after the completion of this lesson and the
Electronic Banking lesson plan 1.7.2.
Materials
Statements for Financial Institutions worksheet – 1.7.3.A1
Financial Institutions Review worksheet – 1.7.3.A2
Area Financial Institutions worksheet – 1.7.3.A3
Financial Institutions information sheet – 1.7.3.F1
Financial Institutions PowerPoint presentation – 1.7.3.G1
Financial Institutions game cards – 1.7.3.H1
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3.A1
Worksheet
Statements for Financial Institutions
Total Points Earned
48 Total Points Possible
Percentage
Name_______________
Date_______________
Directions: Check the box under the financial institution which best describes the statement. Some statements may
pertain to more than one financial institution.
Statement
Offers multiple services
Insured by the NCUA
Offers loans
Traditionally the largest bank
Offers financial counseling
Offers checking accounts
Non-profit cooperative & member owned
Offers CDs
Offers stocks
Members often have a common bond
Offers mutual funds
Offers credit cards
Focus on providing loans and mortgages for
savings account customers
Offers savings accounts
Insured by the FDIC
Offers share draft accounts
Offers bonds
Focuses on money management plans for
investing
Offers retirement plan accounts
Offers share certificate accounts
New to the marketplace
Offers investments
Offers safe-deposit boxes
Only financial institution able to offer noninterest
paying checking accounts
Offers real estate investments
Offers share accounts
Offers mortgages
Insured by the SAIF
Commercial
Bank
Savings & Loan
Association
Credit
Union
Brokerage
Firm
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3.A2
Worksheet
Financial Institutions Review
Name_______________
Total Points Earned
48 Total Points Possible
Percentage
Date_______________
Directions: Answer the following questions based on information on Financial Institutions.
1. Identify two reasons to become educated about money management. (2 points)
2. What is the definition of a financial institution (1 point)
3. Who are the customers that depository institutions serve (2 points)
4. What does each acronym stand for - FDIC, SAIF and NCUA What is the purpose of each (6 points)
5. What are four types of financial institutions (4 points)
6. Name two characteristics about commercial banks. (2 points)
7. Name three services offered at commercial banks. (3 points)
8. How did the savings & loan associations (S&Ls) get their name (2 points)
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3.A2
Worksheet
9. Name three services offered at S&Ls. (3 points)
10. What is significant about credit unions compared to commercial banks and S&Ls (2 points)
11. Identify three services offered at credit unions. (3 points)
12. Why might people be less familiar with brokerage firms (1 point)
13. Name three services offered at brokerage firms. (3 points)
14. Describe two benefits from using financial services. (2 points)
15. Identify two reasons why choosing one financial institution can be an advantage to a consumer. (2 points)
16. Choose and describe four financial services. (8 points)
17. Identify two new things you learned about financial institutions and services. (2 point)
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

1.7.3.A3
Worksheet
Area Financial Institutions
Name_______________
Total Points Earned
20 Total Points Possible
Percentage
Date_______________
Directions: Complete the following questions by researching local financial institutions.
1. Name two financial institutions in the surrounding area and tell where they are located. (4 points)
2. What type of financial institutions are they – commercial bank, savings & loan association, or a credit
union (2 points)
3. Name three services offered by each financial institution. (6 points)
4. Are they local banks or are they part of a larger chain Explain. (2 points)
5. How did you research this information (2 points)
6. Why is it important to research banks before choosing one (2 points)
7. Which financial institution would you choose based on the researched information and why (2 points)
© Family Economics & Financial Education – Revised October 2004 – Financial Institutions – Financial Institutions Unit – Page 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona