Ch 4. Financial Services

Which of the following are considered demand deposits? Checking accounts Payment accounts Savings accounts

Checking accounts Payment accounts

A Savings Bond that has an interest rate based on two components is a(n):

I bond

T or F A current cash need can be sovled by liquidating savings or borrowing

True

The Blank______ is the percentage rate expressing the total amount of interest that would be received based upon time and compounding. Multiple choice question.

annual percentage yield

An automatic teller machine (ATM) is also called as a(n) "__________ machine."

cash

_________ deposits include checking accounts and other payment methods.

demand

Compounding is the process that calculates earnings based on previously earned:

interest

When Evaluating a Savings Plan consider...

rate of return inflation tax considerations liquidity safety restrictions fees

Liquidity

the attribute of savings accounts that allows you to withdraw money on short notice without a loss of principal or fees.

Compounding

the process of accumulating interest on an investment over time to earn more interest

Common mistakes made when managing current cash needs include...

using savings for current expenses. overspending. lacking sufficient liquid assets to pay current bills. leaving funds in low-interest accounts too long.

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.

Types of Financial Services

1. Savings 2. Cash Availability and Payment Services 3. Borrowing 4. Investments and other Financial Services

Truth in Savings Act cant disclose the following about specific savings accounts...

1. fees on deposit accounts 2. interest rate 3. annual percentage yield (APY) 4. other terms and conditions of savings plan