Chapter 3 - Banking

routing number

1st range of numbers @ bottom of check. Identifies what bank and which Federal Reserve District the bank belongs to

overdrawn

A depositor draws a check for more than the amount he has in the bank

endorsement

A signature on the back of a check authorizing a bank to cash or deposit the check

deposit slip

A slip or form that is filled out with your name, account number and a space for you to record the cash and/or checks that you are depositing.

Transaction

When money goes into, or out of, your account. Can include deposits, withdrawals, payments, fees, ATM transactions or transfers.

debit

a charge deducted from an account.

bounced check

a check written for an amount more than in your account; Non-sufficient funds (NSF)

service charge

a fee a bank charges for handling a checking account

Interest

a fixed charge for borrowing money; I=PRT

check stub

a form attached to a check on which a depositor keeps a record of the checks written and any current deposit

credit

entry of money paid into an account

compound interest

interest calculated on both the principal and the accrued interest

balance

the difference between the totals of the credit and debit sides of an account; amount of money in an account

payee

the person a check is written to; the person being paid

signature

your name written in your own handwriting

post date

To write a future date on a check.

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

numerical digits

Symbols used to make numbers (Ex. {0,1,2,3,4,5,6,7,8,9}); used to fill in the dollar amounts on a check.

check register

The book in which you keep records of checks, deposits, debit card transactions, and atm withdrawals.

Principal

The money originally invested or loaned, on which basis interest and returns are calculated

payor

The payor is you, the account holder, the person whose account is going to be affected by the check

compound amount

The total in a savings account at the end of an interest period after compound interest is added

minimum balance

This is the lowest amount of money that you must keep in your bank account at all times.