Term
| What are two categories of accounts? |
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Definition
1. Transaction Accounts
2. Time deposits |
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Term
| What is a transaction account? |
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Definition
| It’s an account that allows transaction to occur at any time and in any number. |
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Term
| What is an example of demand deposit? |
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Definition
| Transaction is an example of a demand deposit, because they are payable on demand whenever the depositor chooses. |
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Term
| Why is it important for consumer to look closely at fees charged and services offered for their checking accounts? |
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Definition
| A basic account may actually cost more money to operate than another type of account if there are many transactions raising the fees. |
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Term
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Definition
| Deposits that are held for or mature at a specified time. |
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Term
| What is passbook savings account? |
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Definition
| It provided a ledger of activity that the teller updated when the customer made deposits or withdrawals. |
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Term
| What are statement savings accounts? |
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Definition
| It provided a monthly or quarterly computerized statement detailing all account activity, including interest additions and fees charged. |
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Term
| What are money market deposit accounts? |
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Definition
| It offer a higher rate of interest than savings accounts, but usually require a higher initial deposit to open an account. |
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Term
| What is a certificate of Deposit? |
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Definition
| It is certificate offered by a ban that guarantees payment of specified interest rate until a designated date in the future. That date is called the maturity date. |
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Term
| What is a share-draft account? |
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Definition
| Functions like a checking account |
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Term
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Definition
| Works essentially like a savings account |
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Term
| What is a share certificate? |
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Definition
| Is equivalent to a Certificate of Deposit |
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Term
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Definition
| It is the price paid for the use of money. |
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Term
| How do you calculate money? |
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Definition
*The beginning amount is called the principal.
*R is rate
*T is time ( P x R x T = I )
*I is interest |
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Term
| What is the most powerful tool in savings? |
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Definition
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Term
| What is compound interest? |
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Definition
| It’s adding interest to the principal and paying interest on the new total. |
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Term
| What are the two terms that allow to compare interest? |
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Definition
1. annual percentage rate (APR) – the nominal rate on which interest is calculated per year.
2. annual percentage yield (APY) – represent the effect of compounding. |
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Term
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Definition
| New money, which the seller of the securities deposit in financial institutions. |
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Term
| What is the engine that drives the flow of deposit? |
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Definition
| It is the economy itself. |
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Term
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Definition
| It explains characteristics of each type of account. |
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Term
| What are deposit rate schedules? |
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Definition
| It list interest rates in effect at the time for various types of account. |
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