Chapter 4

In-Class Notes

Background on Money Management• Money management: describes the decisions

you make over a short-term period regarding income and expenses

• Liquidity: refers to your access to ready cash to cover short-term and unexpected expenses:• Chequing and savings accounts

• Credit cards and lines of credit

• Emergency funds

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Types of Financial Institutions• Depository Institutions• Chartered banks• Trust and loan companies• Credit unions and caisses populaires

• Non-depository Institutions• Finance and lease companies• Mortgage companies and investment dealers• Insurance companies and mutual fund companies• Payday loan companies, cheque cashing outlets, and

pawnshops

• Financial Conglomerates4-3Copyright © 2009 Pearson Education Canada

Banking Services Offered by Financial Institutions• Chequing services

• Cheque float

• Credit card financing

• Debit cards

• Safety deposit boxes

• Automated banking machines (ABMs)

• Certified cheques

• Money orders and drafts

• Traveller’s cheques

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Selecting a Financial Institution

• Select your financial institution based on:

• Convenience

• Deposit rates and insurance

• Fees

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Savings Alternatives Offered by Financial Institutions• Common investment alternatives include:

• Savings deposits

• Term deposits

• Guaranteed investment certificates (GICs)

• Canada Savings Bonds (CSBs)

• Money market funds (MMFs)

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