Chapter 5 - Banking

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What is money that is going to be left in a financial institution for months referred to as?

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What is Direct Deposit and what benefits does it provide?

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What is Automatic Payment and what benefits does it provide?

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What is the difference between an ATM Card and Debit Card?

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What is the difference when you use your PIN number or sign the transaction receipt when using a Debit Card?

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What does FDIC stand for and what do they do?

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This is a for-profit institution that offers a full range of financial services, including checking, savings, and lending. They are chartered by either the federal or state government?

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This deposit type institution traditionally specialized in savings accounts and mortgage loans. However today they offer many of the same services as traditional banks.

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This deposit type institution is a nonprofit financial institution that is owned by its members and organized for their benefit. Their fees and loan rate are generally lower than those at commercial banks.

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This nondeposit-type institution combines your money with that of other investors in order to buy stocks, bonds, and other securities.

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This account is traditionally called a passbook account and is ideal if you plan to make frequent deposits and withdrawals. They require little or no minimum balance and allow you to withdraw money quickly. The trade off for convenience is that the interest rate is very low.

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In this type of account the depositor deposits money into an interest bearing account for a predetermined period of time. During that time the money cannot be withdrawn without a fee. The interest rate is usually higher because of the time the money will remain in the account.

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This type of accounts interest rate changes with market fluctuations. The account usually has a higher interest rate than a savings account but also has higher minimum deposit requirements. It generally allows a limited number of checks to be written on the account.

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According to this act financial institutions have to inform you of the terms and conditions of all savings accounts, including fees, interest rates and the annual percentage yield.

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What is the difference between the APR and the APY? Explain

DAILY DOUBLE

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Restrictions, Fees and Charges, Interest and Special Services should all be considered when opening a ___________ account?

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This is a report that accounts for the differences between bank statement and your checkbook balance.

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This is a request that an institution not cash a particular check.

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This is an automatic loan made to you if you write a check for more money than you have in your account.

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This is the process in which funds are delivered from your checking account to the payee when a check is written as payment. By law institutions are limited to holding funds from checks drawn on local banks to no more than 5 business days.

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A card issued by a financial institution, that allows you to withdraw money from your accounts or pay for purchases by deducting funds directly from your account.

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Computer terminals that let you withdraw cash from you account, make deposits, and transfer money from one account to another.

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This is the process in which interest is earned on both the principal and on any previously earned interest.

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This is the machine used to process electronic payments for debit card transactions.

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This is the percentage of increase in the value of your savings from earned interest.

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