Consumer and Family Finance Chapter 5

Checking account

a deposit account held at a financial institution that performs transactions that allow for withdraws and deposits.

CD Laddering

a strategy which an investor divides the amount of money to be invested into equal amounts to CDs with different maturity dates; it decreases both interest rate and re-investment risks.

Certificate of Deposit

an interest earning savings instrument purchased for a fixed period of time, such as 6 months, or 1, 2, or even 5 years.

Money Market Account

any of a variety of interest-earning accounts that pays slightly higher interest rates and offers some checkwriting privilege.

Money Order

available at checking cashing locations, convenience stores, gas station, post office, retailer; $1,000 limit

Certified Check

bank certifies/freezes the check amount in your account

Monetary Asset

cash and low-risk item that can be converted to cash with little or no loss in value, such as checking and savings accounts.

Tenancy in common

is a form of joint ownership with two or more parties own the asset, but each retains control over a separate piece of the property rights.

Tenancy by the entirety

is a type of shared ownership of property available only to married couples, each spouse owns an undivided interest of the property.

Cashier Check

only available at financial institutions (bank or credit union). no limit

Liquidity

refers to the speed and ease with which an asset can be converted to cash.

Joint tenancy with right of ownership

the property shares of one co-tenant are transferred directly to the surviving co-tenant.

Monetary Asset Management

the task of maximizing interest earnings and minimizing fees on all of your funds kept readily available for day-to-day living expenses, emergencies, savings, and investment opportunities.

Safety

your funds are free from financial risk.