Banking 7.1

bank withdrawal

Money taken out of a bank account

principal

The amount of money borrowed

Board of Governors of the Federal Reserve System

The seven-member board that supervises the banking system of the United States

interest

A sum paid or charged for the use of money or for borrowing money

loan

An amount of money given to the borrower for a set period of time. After the set time has passed, the money must be paid back plus the lending fee, called interest. Payments are normally made over a series of months.

FDIC

Federal Deposit Insurance Corporation

Federal Open Market Committee (FOMC)

Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money supply

timed deposit

The technical name for a savings account; the bank can require prior notice before the owner withdraws money from a time deposit.

checking account

a bank account against which the depositor can drawn checks payable on demand

commercial bank

a for-profit institution that offers a full range of financial services, including checking, savings, and lending

Federal Deposit Insurance Corporation (FDIC)

an agency created in 1933 to insure individuals' bank accounts, protecting people against losses due to bank failures

A bank run occurs when:

many depositors go to a bank at the same time to withdraw their money

demand deposit

money in a checking account that can be paid out "on demand" or at any time

Federal Reserve Banks

the 12 banks chartered by the U.S. government to control the money supply and perform other functions

Federal Reserve

the central bank of the United States

deposit

to put money into an account