Consumer Ed Unit 3: Banking

what is a bank?

a general sense refers to any type of financial institution where you may deposit money

what is a checking register?

a place to record all monetary transactions immediately for a checking account

what is money order?

a purchased certificate (check) you can get at grocery store, post office, currency exchange, convince store. cash dollar amount often have a designated amount made out to the issuer

what is the second set of numbers assigned to you by the financial institution

account number

ATM means

automated teller machine

is there a difference between balancing a check book and balancing a checking account?

balancing a check book is you balancing it and balancing a checking account is the bank maintaining it

if you wait longer to report theft you could

be liable for 500$ and if you fail to report you could be for the entire amount

which account/savings vehicle has a fixed interest rate and a penalty for withdrawing money

certificate of deposit

what do you need to fill out in a deposit slip?

date signature under date (if taking cash out) itemize what you are depositin

travelers checks

documents that function like cash but can be replaced if lost or stolen

t or f. is you loose you card and report it within 2 business days, you are liable for no more than 75$

false

wire transfer

financial transaction that electronically moves funds from one bank to another

prepaid cards

gift cards

describe a debit card

has an account number, expiration date, cardholders name, magnetic strip

what is a restrictive endorsement?

more secure, receiver writes ¨for deposit only¨ and account number number. check can only be deposited in that account

what does the Electric Fund Transfer Act state

protects consumers using some forms of electronic banking if your ATM, or debit card is stolen, report it to your financial institute IMMEDIATELY. if you do this within two business days, you are liable for no more than 50 dollars

what is special endorsement?

receiver signs and writes ¨pay to the order of (fills in person's name).¨ allows check to be transferred to a second party (second party check)

bank statements are compared to the check register when ____________ the account

reconcilling

what does it mean to endorse a check?

signing the back of the check to approve it to be deposited MUST BE ENDORSED TO BE DEPOSITED

overdraft

spending too much money then whats in your account

what does overdraft mean?

taking too much money out of your account

EFT can be done in a variety of what ways

teller machines, telephone, or the interenet

what is the third set of number on the lower left corner of your check and identifies the financial institution where the account is located

the check number

where is the bank routing number located?

the first set of numbers on the check/deposit slip

what is the Electronic Funds Transfer (EFT)

the movement of funds by electronic means

who is the payee

the one to whom a check is written to

who is the payer

the one who writes the check

what us the first set of 9 numbers on the lower left corner of your check and identifies the financial institution the account is located

the routing number

where is the bank account number located?

the second set of numbers on the check/deposit slip

what does the EFT allow

to allow transactions to be completed without a bank teller

what is a deposit?

to put money in your bank account- you need to fill out a deposit slip

t or f, you can write a check even if you don't have the money in the account now to cover it, but plan to deposit the money later

true

what is a check?

used at the time of purchase as the form of a payment - a piece of paper with account holders name, address, and financial institution

what is a deposit slip used for?

used to put money your bank account

is EFT the same as ATM?

yes, because an ATM moves money electronically (EFT)

what is a debit card?

- a plastic card that looks like a credit card - money is automatically taken from the bank account when purchases are made - requires pin

what are the cons of a debit card?

- can loose track of balance if transactions are not written down - opens checking account up to credit frauds - others can gain access to the account if the card is lost and the pin is known

what are the pros of a debit card?

- convent - small - cab be used like a credit card - allows a person to carry less cash - doesn't allow over spending

name three responsibilities of the FED

- price stability - establishes and maintains confidence in public for monetary system - stabilizes the economy - protects credit rights of consumers - maintains stability of financial systems and containing systematic risk that may arise in financial market

name 3 different types of bank accounta

- simple saving - certificate of deposit - money market account

list 3 transactions on a monthly bank statement?

-debit -credit -withdrawl

what are some automated services

-direct deposit -automated loan payments -telephone services - online banking:a log in name and password will help keep account protected

what are the key parts in depositing a check?

1 date 2 pay to the order of 3 amount 4 memo 5 signature

what are the three different types of ways to endorse a check?

1. blank 2. restrictive 3. special

why do people use checking accounts?

1. it reduces the amount of cash on them (safety) 2. convince- used to pay bills 3. keeps record of money spent

what is an ATM?

Automatic Teller Machine or cash machine. used to withdraw cash and make deposits

what is interest?

a fee paid for an opportunity to use someone else's money over a period of time

what is a checkbook

a book containing checks and the register to track monetary transactions

what is a certified check?

a check from a personal checking account. It has been stamped by the bank to guarantee that there are sufficient funds available to cover it.

what is a cashier's check?

a check issued and guaranteed by the bank. only available at the bank. cash dollar amounts and have higher limits than money order.

canceled check

a check that has been paid

what does bouncing a check mean?

a check written for an amount over the current balance held in the account a fee will be charged to the account holder (harm future opportunity for credit)

what is a checking account?

a common financial service used by many consumers ATM, checks, debit cards