Lesson 11:

Credit Union vs. Bank

Stashing their hard-earned bucks under the bed or in a dresser drawer isn’t all that uncommon when it comes to teens’ money-saving methods. But if they knew what banks or credit unions could do for their money, they may think twice about where to stash their cash. In this lesson, you will learn about the different types of financial institutions available and assess which option may work best for you. You will explore savings opportunities, bank fees and technology-enhanced banking services; and then determine which services you value the most and why.

Learning Objectives:

Assess different types of banking services and savings institutions
Research and compare the fees banks charge for various services
Analyze the relative value and importance of different bank services

Essential Question: “How do I choose a financial institution that is right for me?”

Investigate: Where Do I Keep My Money?

[Time Required: 10 minutes]

Reflect in your notebooks about where you keep your money and why. Do you keep it in your dressers at home, in a bank account or in a money jar? Take three to five minutes to record your thoughts.
What are the benefits of keeping money in the bank versus at home (e.g., if students keep their money at home and a fire, theft, or other disaster occurs, what happens to their money?)

Student Preparation: Choose a Financial Institution

[Time Required: 20 minutes]

Do you know what your options are when it comes to banking? What kinds of institutions are available to help keep your money safe? Are all of these institutions the same?
There are three types of financial institutions: banks are owned by investors and are for-profit businesses; credit unions are not-for-profit and member-owned; and thrift banks specialize in home loans and serving small businesses within the community.
Download the student activity sheet Credit Union or Bank: Which One is Right for Me? Then play the FDIC podcast at: moneysmart.fdic.gov/podcasts/#audio1, which explains the differences between financial institutions in greater detail. Record the differences on the activity sheet.
Which institutions would you consider placing their money in and why?

Challenge: Services and Fees

[Time Required: 30 minutes]

In the process of evaluating the different types of institutions, it’s important to look at the services each offers.
How often do you see people write checks for purchases? Odds are, it is not often. Many people look for banks that offer opportunities to pay bills, make purchases and transfer money without having to use their checkbooks or visit a local branch.
Download the student activity sheet Banking Partners: Battle for a Bargain. Take 15 minutes to conduct your research.
Which services do you value the most and why (e.g., text message banking, online bill pay, etc.)> What costs do think you should avoid (e.g., maintaining minimum balances, using designated ATMs that don’t carry fees, etc.)? How do you do so?

Reflection

[Time Required: 5 minutes]

Reflect in your notebook about what questions you would ask a bank where you were considering opening an account. For example: what terms, services and fees would you consider and why?

dollars and reflect in your notebook about how your perception has changed. Would you spend the money in the same way? Why or why not?

Back to Lessons

Americans aren’t typically known for their financial responsibility – yet many are already using complex financial strategies. For example, shopping at the mall calls for cost comparisons, and saving for a skateboard requires budgeting. To learn about responsible money management, it’s important to take a look at the building blocks of financial decision-making. In this lesson, we will examine the spending decisions students already make. Then examine real-life spending scenarios and research, analyze, and present their recommendations.

Learning Objectives:

Explore personal financial choices
Learn to make informed financial decisions
Consider what it means to be financially responsible

Worksheet One: