Time Deposit
Money that is going to be left in a financial institution for months or years (CDs, savings accounts, etc.).
Direct Deposit
Automatic deposit of net pay to an employee's designated bank account.
Automatic Payment
Money drawn directly from accounts.
ATM (Automated Teller Machine)
Computer terminal that allows a withdrawal (and sometimes a deposit into an account) of cash from an account.
Debit Card
Cash card that allows you to withdraw money or pay for purchases from your checking or savings account.
Types of Financial Services
These include savings, payment services, borrowing (for your house, car, college), and other financial services (insurance, investment services, taxes, financial planning).
Electronic Banking Services
These include a direct deposit, automatic payment, ATMs, and plastic payments.
Point of Sale Terminal
Purchase by a debit card of a good or service at a retail store, restaurant, etc.
Federal Deposit Insurance Corp (FDIC)
Organization that insures your money.
Commercial Bank
A for profit institution that offers a full range of financial services, including checking, savings, and lending for businesses and individuals.
Savings and Loan
Financial institution that traditionally specialized in savings accounts and home loans, but now offers many of the same services as commercial banks.
Credit Unions
A nonprofit financial institution that is owned by its members to offer that same services as a commercial bank--fees and loan rates at these may be lower than banks because these are non-profit businesses.
Non-Deposit Institutions
These include life insurance, investments, finance corporations, and mortgage corporations.
Financial Institutions
These include the FDIC, deposit institutions, and non deposit institutions.
Types of Savings Plans
These include a regular savings account, certificate of deposit (CD), money market accounts, and U.S. savings bonds.
Certificate of Deposit (CD)
Savings plan in which money is left on deposit for a stated period of time to earn a specific interest rate. It's also the "safest way to lose money.
Money Market Account
Savings account that requires minimum balance (usually $1000) and earns interest that varies from month to month as overall rates go up and down. Also includes limited checks.
U.S. Savings Bonds
These are purchased at a discount and when at maturity date they're worth more.
Rate of Return
Percentage increase in the value of your savings from earned interest.
Compounding
Process in which interest is earned on both the principal (original amount of money) and on any previous earned interest.
Annual Percent Yield (APY)
Amount of interest that a $100 deposit would earn after compounding for one year ($100 @ 4% for one year compounding monthly has _____ of 4.07%--$100 @ 4% for one year compounding annually has _____ of 4%).
Evaluating Savings Plans
Includes rate of return, inflation, tax considerations, liquidity, and restrictions and fees.
Types of Checking Accounts
These include a regular checking account, an activity account, or and interest-earning account.
Overdraft Protection
Automatic loan made to an account if the balance will not cover checks written, debit card charges, etc.
Check Clearing for 21st Century Act
Allows banks to transmit electronic images of checks (rather than paper checks) through the check clearing process.
Evaluating Checking Accounts
Things to consider are restrictions, fees and charges, interest, and special services.
Stop Payment Order
Request that a bank or other financial institution not cash a particular check-fees for this can be as high as $20.
Using a Checking Account
Includes opening a checking account first, writing checks, making a deposit, check clearing, and keeping track of a checking account.
Endorsement
Signature of the payee-the party to whom the check has been written.
Bank Statement
Report that accounts for the differences between the bank balance and a checking balance (aka reconcile your checkbook)-with the goal being to match up the amount of money the bank says you have with the amount of money you show in your register.
Steps in Reconciling Bank Statement
1. Compare checks written/debit card transactions with those on the bank statement-SUBTRACT these from the bank statement balance.
2. See if any deposits you made do not show on the bank statement-ADD these to the bank statement balance.
3. Subtract any b
How do Banks Make Money?
They take money you deposit and lend it to others (banks have to keep on hand 3-10% of the deposits they receive to meet their customers' needs), charge service fees, credit card interest, and overdraft fees.
Time Deposit
Money that is going to be left in a financial institution for months or years (CDs, savings accounts, etc.).
Direct Deposit
Automatic deposit of net pay to an employee's designated bank account.
Automatic Payment
Money drawn directly from accounts.
ATM (Automated Teller Machine)
Computer terminal that allows a withdrawal (and sometimes a deposit into an account) of cash from an account.
Debit Card
Cash card that allows you to withdraw money or pay for purchases from your checking or savings account.
Types of Financial Services
These include savings, payment services, borrowing (for your house, car, college), and other financial services (insurance, investment services, taxes, financial planning).
Electronic Banking Services
These include a direct deposit, automatic payment, ATMs, and plastic payments.
Point of Sale Terminal
Purchase by a debit card of a good or service at a retail store, restaurant, etc.
Federal Deposit Insurance Corp (FDIC)
Organization that insures your money.
Commercial Bank
A for profit institution that offers a full range of financial services, including checking, savings, and lending for businesses and individuals.
Savings and Loan
Financial institution that traditionally specialized in savings accounts and home loans, but now offers many of the same services as commercial banks.
Credit Unions
A nonprofit financial institution that is owned by its members to offer that same services as a commercial bank--fees and loan rates at these may be lower than banks because these are non-profit businesses.
Non-Deposit Institutions
These include life insurance, investments, finance corporations, and mortgage corporations.
Financial Institutions
These include the FDIC, deposit institutions, and non deposit institutions.
Types of Savings Plans
These include a regular savings account, certificate of deposit (CD), money market accounts, and U.S. savings bonds.
Certificate of Deposit (CD)
Savings plan in which money is left on deposit for a stated period of time to earn a specific interest rate. It's also the "safest way to lose money.
Money Market Account
Savings account that requires minimum balance (usually $1000) and earns interest that varies from month to month as overall rates go up and down. Also includes limited checks.
U.S. Savings Bonds
These are purchased at a discount and when at maturity date they're worth more.
Rate of Return
Percentage increase in the value of your savings from earned interest.
Compounding
Process in which interest is earned on both the principal (original amount of money) and on any previous earned interest.
Annual Percent Yield (APY)
Amount of interest that a $100 deposit would earn after compounding for one year ($100 @ 4% for one year compounding monthly has _____ of 4.07%--$100 @ 4% for one year compounding annually has _____ of 4%).
Evaluating Savings Plans
Includes rate of return, inflation, tax considerations, liquidity, and restrictions and fees.
Types of Checking Accounts
These include a regular checking account, an activity account, or and interest-earning account.
Overdraft Protection
Automatic loan made to an account if the balance will not cover checks written, debit card charges, etc.
Check Clearing for 21st Century Act
Allows banks to transmit electronic images of checks (rather than paper checks) through the check clearing process.
Evaluating Checking Accounts
Things to consider are restrictions, fees and charges, interest, and special services.
Stop Payment Order
Request that a bank or other financial institution not cash a particular check-fees for this can be as high as $20.
Using a Checking Account
Includes opening a checking account first, writing checks, making a deposit, check clearing, and keeping track of a checking account.
Endorsement
Signature of the payee-the party to whom the check has been written.
Bank Statement
Report that accounts for the differences between the bank balance and a checking balance (aka reconcile your checkbook)-with the goal being to match up the amount of money the bank says you have with the amount of money you show in your register.
Steps in Reconciling Bank Statement
1. Compare checks written/debit card transactions with those on the bank statement-SUBTRACT these from the bank statement balance.
2. See if any deposits you made do not show on the bank statement-ADD these to the bank statement balance.
3. Subtract any b
How do Banks Make Money?
They take money you deposit and lend it to others (banks have to keep on hand 3-10% of the deposits they receive to meet their customers' needs), charge service fees, credit card interest, and overdraft fees.