Objectives:

Manage your cash and understand why you need liquid assets
Automate your savings
Choose from among the different types of financial institutions that provide cash management services
Compare the various cash management alternatives
Compare rates on the different liquid investment alternatives
Establish and use a checking account
Transfer funds electronically and understand how electronic funds transfers (EFTs) work

Reading For This Module:

Chapter 5 – Keown, Arthur, “Personal Finance: Turning Money into Wealth, Prentice Hall Publishing. 6^th edition

Opening Vignettes:

Lately, Financial Institutions have gotten a bad rep, but they are often still the best places to securely place your liquid (easily accessed) assets.

Regular people stand before a delapidated bank saying to a banker:

Introduction: Cash Management/Financial Institutions

This module establishes the importance of implementing an effective cash management plan. The basic premise is the importance of maintaining some liquid assets to be used in the event of an emergency. Cash management institutions, their features, and the characteristics of the accounts offered are summarized. Strategies for selecting and using cash management vehicles, such as the checking account, are discussed. Financial institutions are also compared and contrasted as to services.

Dr. Waller Lecture: Cash/Liquid Asset Management (video) (13:59)

This video lecture discusses the importance of cash management and the need for liquidity, particularly for emergency use.

Cash/Liquid Asset Management Lecture PowerPoint (.pptx 1.3MB 23SL)

Additional Optional Resources for this module. (material will be on graded assignments):

Depository Lending Institutions

Please print out, read and complete the worksheets below.

Introduction to Depository Institutions (.pdf 5pp 818KB)
Learn about the types of banks and what differentiates them.

Depository Institutions (.pptx 33sl 1.37MB)
Learn along with Josie things to consider when picking a bank.

Comparing Depository Institutions (.pdf 1p 605KB)
Worksheet for Josie’s banking comparison.

Importance of savings (.pptx 35sl 2.47MB)
Learn about savings and how it differs from investing.

Reflection

Cash management is balancing the risk of not having enough in liquid assets with the potential for greater return on other investments
Automatically save some of your income and learn to live on take-home income
Choose cash management alternatives from among deposit-type and nondeposit-type institutions
Compare various cash management alternatives
With checking accounts look into cost, convenience, consideration, and safety
Electronic funds transfer transactions occur immediately and avoid use of cash or check

Practice Quiz (does not count toward grade)

Open practice quiz

Quizzes

Take the quiz for this module on Canvas.

EXAM 1

Take EXAM 1 for this module on Canvas.

return to the module list

DUAL Finance Module 4: Financial Institutions and Cash Management