Money, Banking and Credit

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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


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