Shared Flashcard Set

Details

banking notes
questions for banking chapter 4
24
Business
11th Grade
04/27/2006

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Cards

Term
What are time deposits?
Definition
Time deposits are deposits that are held for or mature are a specified time. Time deposits include savings accounts which are less liquid than checkable deposits.
Term
What are statement savings accounts?
Definition
They provide a monthly or quarterly computerized statement detailing all account activity.
Term
What is a passbook savings account?
Definition
Provided a ledger of activity that the teller up dated when the customer made deposits or withdrawals.
Term
What is a saving account?
Definition
An account when a deposit put money into collect interest. Provide a monthly or quarterly computerized statement detailing all account activity,
Term
What is a Share-Draft account
Definition
Functions like a checking account, and a share- certificate is equivalent to certificate of deposit.
Term
Where is the safest place to keep your money? Why?
Definition
Savings accounts because, you can get your money at any time, so liquidity is high but the low rate of interest makes other time deposits more attractive.
Term
What are Money market accounts?
Definition
A higher rate of interest than savings accounts, but they usually require a higher initial deposit to open an account.
Term
What is Certificate of Deposit? And what is the date called?
Definition
A certificate offered by a bank that guarantees payment of a specified interest rate until a designated date in the future. This day is called the maturity date.
Term
What is a share certificate equivalent to?
Definition
Certificate of Deposit.
Term
What are two categories of Accounts?
Definition
Transaction accounts and Time deposits.
Term
What is a transaction account?
Definition
An account that allows transactions to occur at any time and in any number.
Term
What does a check do?
Definition
By writing a check a depositor can withdraw money by giving written notice to the bank to pay a named person a specified amount from your account
Term
What is a basic checking account?
Definition
An account that offers a few simple services for minimal cost.
• Some are free
• Some maybe free if a minimum balance is maintained.
• Some have a basic fee and price extra services per item.
Term
What is an interest bearing checking account?
Definition
A checking account that pays interest on the balance deposited in the account. But usually only if the deposited balance is maintained at or above a required level.
Term
What is interest?
Definition
The price paid for the use of money.
Term
How do you calculate interest?
Definition
P * R * T = I (Principal * Rate * Time = Income)
Term
What is compound interest?
Definition
Adding interest to the principal and paying interest on the new total.
Term
What is compound interest?
Definition
Adding interest to the principal and paying interest on the new total.
Term
How do you calculate compound interest?
Definition
F=P(1+R)^n ( Future value = Principal (1+ Rate)^Number of intervals.
Term
What does APR and APY stand for?
Definition
APR means Annual percentage rate, the nominal rate on which interest is calculated per year. APY means Annual percentage yield and represents the effect of compounding.
Term
What does money include?
Definition
Money includes checks, ledger transfers and even credit.
Term
What are the 2 ways the Feds can influence the money supply and the flow of deposits?
Definition
1) The Feds can put more money in the economy by buying securities or creating new money. This new money is called raw money. 2) The Feds can effectively take money out of the economy if they feel it needs to slow the economy. They do this by selling treasury securities. The money they earn from the sell of these securities does not go into a bank account, it effectively disappears.
Term
What are fee schedules? What are check hold policies?
Definition
Shows the charges that apply to each specific type of deposit account.
Explains when deposited funds will be available for use by the consumer.
Term
What are disclosure statements? What are account policy statements?
Definition
They provide full information about bank policies, such as electronic funds transfer policies, lending policies, interest crediting and compliance with banking.These deal with the bank statement sent by the bank.
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