chapter 5

share draft account

an interest bearing checking account at a credit union

rate of return

the percentage of increase in the value of savings as a result of interest earned; also called yield

annual percentage yield

the percentage rate expressing the total amount of interest that would be received on a $100 deposit based on the annual rate and frequency of compounding for a 365-day period

overdraft protection

An automatic loan made to checking account customers to cover the amount of checks written in excess of the available balance in the checking account

ATM

a computer terminal used to conduct banking transactions; also called a cash machine

trust

a legal agreement that provides for that management and control of assets by one party for the benefit of another

debit card

a plastic access card used in a computerized banking transactions; also called a cash card

compounding

a process that calculates interest based on previously earned interest

share account

a regular savings account at a credit union

money market account

a savings account offered by banks, savings and loan associations, and credit unions that requires a minim balance and has earnings based on market interest rates

certificate of deposit

a savings plan requiring that a certain amount be left on a deposit for a started time period to earn a specified interest rate

credit union

a user-owned, non-profit, cooperative financial institution that is organized for the benefit of its members

asset management account

an all in one account that includes savings, checking, borrowing, investing, and other financial services for a single fee; also called cash management account