Chapter 5
Share account
Banks, savings and loan associations, and other financial institutions offer regular savings accounts. At a credit union, these savings plans
Automatic teller machine
Called a cash machine, provides various banking activities and other types of transactions such as buying transit passes, postage stamps, and gift certificates
Asset management account
Called a cash management account, provides a complete financial services program for a singel fee
Compounding
Refers to interest that is earned on previously earned interest
Savings and loan association
Specialized in savings accounts and loans for mortgages
Rate of return
Yield, the percentage of increase in the value of your savings from earned interest
Money market fund
A combination savings-investment plan in which the investment company uses your money to purchase a variety of short-term financial instruments
Trust
A legal agreement that provides for the management and control of assets by one party for the benefit of another
Money market account
A savings account that requires a minimum balance and has earnings based on market interest rates
Certificate of deposit
A savings plan requiring that a certain amount be left on deposit for a stated time period (ranging from 30 days to five or more years) to earn a specific rate of return
Credit union
A user-owned, nonprofit, cooperative financial institution
Share draft account
An interest-earning checking account at a credit union
Overdraft protection
An automatic loan made to checking account cutomers for checks written in excess of the available balance
Debit card
Cash card, that activates ATM transactions may also be used to make purchases
Commercial bank
Offers a full range of financial services, including checking, savings, and lending, along with many other services
Mutual savings bank
Owned by depositors and, like the traditional savings and loan association, specializes in savings accounts and mortgage loans
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
