Money, Banking and Credit
Debit Card
a card that electronically subtracts the amount of your purchase from your bank account at the moment the purchase is made
National Bank
a commercial bank chartered by the U.S. Comptroller of the Currency
State Bank
a commercial bank chartered by the banking authorities in the state in which it operates
Certificate Of Deposit (CD)
a document stating that the bank will pay the depositor a guaranteed interest rate for money left on deposit for a specified period of time.
Credit Union
a financial institution that accepts deposits from and lends money to only those people who are its members
Savings And Loan Association (S&L)
a financial institution that offers checking and savings accounts and certificates of deposit and that invests most of its assets in home mortgage loans and other consumer loans
Revolving Credit Agreement
a guaranteed line of credit
Letter Of Credit
a legal document issued by a financial institution guaranteeing to pay a seller a stated amount for a specified period of time
Line Of Credit
a loan that is approved before the money is actually needed
Electronic Funds Transfer (EFT) System
a means of performing financial transactions through a computer terminal or telephone hookup
Store Of Value
a means of retaining and accumulating wealth
Commercial Bank
a profit-making organization that accepts deposits, makes loans, and provides related services to its customers
Measure Of Value
a single standard or "yardstick" used to assign values to, and compare the values of, products, services, and resources
Barter System
a system of exchange in which goods or services are traded directly for other goods or services
Check
a written order for a bank or other financial institution to pay a stated dollar amount to the business or person indicated on the face of the check
Banker's Acceptance
a written order for the bank to pay a third party a stated amount of money on a specific date
Demand Deposit
an amount on deposit in a checking account
Time Deposit
an amount on deposit in an interest-bearing savings account
Now Account
an interest-bearing checking account; NOW stands for negotiable order of withdrawal
Money
anything a society uses to purchase products, services, or resources
Medium Of Exchange
anything accepted as payment for products, services, and resources
Credit
immediate purchasing power that is exchanged for a promise to repay borrowed money, with or without interest, at a later date
Collateral
real estate or property pledged as security for a loan
Open-Market Operations
the buying and selling of U.S. government securities by the Federal Reserve System for the purpose of controlling the supply of money
Federal Reserve System
the central bank of the United States responsible for regulating the banking industry
Federal Funds Rate
the interest rate at which a bank lends immediately available funds to another bank overnight in order to meet the borrowing bank's reserve requirements
Discount Rate
the interest rate the Federal Reserve System charges for loans to member banks
Reserve Requirement
the percentage of its deposits a bank must retain, either in its own vault or on deposit with its Federal Reserve District Bank
Electronic Check Conversion (ECC)
A process used to convert information from a paper check into an electronic payment for merchandise, service, or bills