Personal Finance Chapter 4

Automatic Teller Machine (ATM)

A computer terminal used to conduct banking transactions; also called a cash machine.

Mutual Savings Bank

A financial institution that is owned by depositors and specializes in savings accounts and mortgage loans.

Commercial Bank

A financial institution that offers a full range of financial services to individuals, business, and government agencies.

Trust

A legal agreement that provides for the management and control of assets by one party for the benefit of another.

Debit Card

A plastic access card used in computerized banking transactions; also called a cash card.

Savings And Loans Associations (S&L)

A financial institution that traditionally specialized in savings accounts and mortgage loan.

Compounding

A process that calculates interest based on previously earned interest.

Money Market Account

A savings account offered by banks, savings and loan associations, and credit unions that requires a minimum balance and has earnings based on market interest rates.

Certificate Of Deposit (CD)

A savings plan requiring that a certain amount be left on deposit for a stated time period to earn a specified interest rate.

Money Market Fund

A savings-investment plan offered by investment companies, with earnings based on investments in various short-term financial instruments.

Asset Management Account

An all-in-one account that includes savings, checking, borrowing, investing, and other financial services for a single fee; also called a cash management account.

Overdraft Protection

An automatic loan made to checking accounts customers to cover the amount of checks written in excess of the available balance in the checking accounts.

Annual Percentage Yield (APY)

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.

Rate Of Return

the percentage of increase in the value of savings as a result of interest earned; also called yield.

Credit Union

A user-owned, nonprofit, cooperative financial institution that is organized for the benefit of its members.