Money Management - Chapter 5 - The Banking System

annuity

A fixed amount set aside on a regular basis over time

bounced check

A check that is returned to the payee's bank due to
nonsufficient funds

cashier's check

A check issued against the bank's funds

certificate of deposit

A time deposit that pays a fixed rate of interest for a
specified length of time

check

A written order to a bank to pay a stated amount to a person

checkbook register

A tool used to track checking account transactions

checking account

A demand deposit in a bank on which checks are drawn

compound interest

Interest earned on both principal and previously earned
interest

debit card

A card used to withdraw or deduct money from your
checking account

deposit

Money added to a checking or savings account

endorsement

A signature on the back of a check

floating a check

Writing a check and planning to make a deposit later to
cover it before the check is processed

inactive account

An account that does not meet minimum usage
requirements

Internet banking

Accessing and managing your account online

money market account

A type of savings account that earns the market rate of
interest on the money deposited

money order

A check used to pay bills for which money is guaranteed

postdated check

A check written with a date that will occur in the future

principal

A sum of money set aside on which interest is paid

Rule of 72

A quick formula for computing how long it will take to
double money invested at a given interest rate

savings account

A demand deposit account designed for the accumulation
of money in a safe place for future use

simple interest

Interest computed on principal once during a certain time
period

smart card

A card that contains a computer chip that stores electronic
money

stop payment

An instruction to the bank not to honor a check that has
been issued or lost

U.S. savings bond

A discount bond issued by the federal government

withdrawal

Taking money from your account