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