Unit 2 banking
PIN number
a short number that you use to access your account often from a ATM
deposit slip
a slip of paper to keep track of your deposits at one single time
phishing
a technique to gain personal information for the purpose of identity theft, usually by means of fraudulent e-mail
automatic payment
Routine, automated payments made from a banking, brokerage or mutual fund account to vendors
compounding
The accumulation of a sum of money in, say, a bank account, where the interest earned remains in the account to earn additional interest in the future
monetary policy
The management of the money supply and interest rates
checking account
an account that gets no interest but is used for everyday expenses
savings account
an account used for you to put away money for a longer period of time
ATM
an automated teller machine, allowing you to withdraw money from your accounts from the machine
stop payment order
an order issued to void or cancel a check
endorsement
blank: just signing your name on the back of a check Special: endorsing the check to be payed to a specific person Restrictive: for deposit only into your account and signing your name
cash management tools
different accounts and strategies we use to manage our money such as savings, checking, money market accounts and bonds and certificate of deposits
money market account
requires a minimum deposit and you have a certain number of checks you can write from that account and gets a good interest rate
70-20-10 rule
70% of the money can be spent, 20% should be saved, and 10% should be invested
cashiers check
A check that a bank draws on its own funds.
pay yourself first
A phrase commonly used in personal finance and retirement planning literature that means to automatically route your specified savings contribution from each paycheck at the time it is received
investment pyramid
A portfolio strategy that allocates assets according to the relative safety and soundness of investments.
money order
A written order for the payment of a sum to a named individual
bank reconciliation
Bringing into agreement a bank statement with your account records
non deposit institutions
Do not take or hold deposits. Earn their money by selling specific services or policies
direct deposit
Electronic funds that are deposited directly into your bank account rather than through a paper check.
Debit card
a card that is directly linked to your checking account, buy now pay now
CD
a certificate deposit requires you to wit for a maturity date and compounds interest over time
commercial bank
a for profit organization that offers many banking benefits to its bankers and customers
FDIC
a government run agency that insures your bank accounts
credit union
a non for profit organization run by a group of people that offer benefits and services to those in the credit union
check
a piece of paper used to transfer funds from your account into someone elses
check register
a register in your checkbook used to keep track of your account balance
bonds
government issued investment that requires you to wait for the required date to get the face value of the bond
methods of payment
how someone pays for a transaction
new balance
money available after previous transactions
overdraft protection
protects your account in case of an overdraft where you accidently spend more money than you have in your account
federal reserve
the central banking of the united states
rate of return
the increase or decrease in the original purchase price of an investment.
travelers checks
use by people who travel, checks are printed in certain dollar amounts, are prepaid and considered safe means for carrying money when traveling
Identity theft
when someone steals you social security number and opens up accounts in your name or uses your accounts to buy things for themself