chapter 15
Automated clearinghouses (ACHs)
a system that permits payments such as deposits or withdrawals to be made to and from a bank account by magnetic computer tape
Mutual fund
an investment company that pools individual investor dollars and invests them in large numbers of well-diversified securities
Electronic funds transfer (EFT)
any movement of funds by means of an electronic terminal, telephone, computer, or magnetic tape
Common forms of EFT
automated teller machines, automated clearinghouses, and home banking systems
Finance companies
businesses that offer short-term loans at substantially higher rates of interest than banks
Insurance companies
businesses that protect their clients against financial losses from certain specified risks in exchange for a fee
Premium
fee for insurance
Brokerage firms
firms that buy and sell stocks, bonds, and other securities for their customers and provide other financial services
Individual retirement account (IRA)
is established by individuals to provide for their personal retirement needs
Pension funds
managed investment pools set aside by individuals, corporations, unions, and some nonprofit organizations to provide retirement income for members
Online banking
most popular banking method in the United States
Nonbank financial institutions
offer some financial services but do not accept deposits
Shadow banking
refers to companies performing banking functions of some sort that are not regulated by banking regulators
Money market fund
special type of mutual fund that invests specifically in short-term debt securities issued by governments and large corporations
Automated teller machine (ATM)
the most familiar form of electronic banking, which dispenses cash, accepts deposits, and allows balance inquiries and cash transfers from one account to another
Investment banker
underwrites new issues of securities for corporations, states, and municipalities