Personal Finance Chapter 5 quiz

savings and loan association (S&L)

a financial intitution that traditionally specialized in savings accounts and mortgage loans

trust

a legal agreement that provides for the manangement and control of assets by one party for the benefit of another

compounding

a process that calculates interest based on previously earned interest based on previously earned interest

share account

a regular savings account at a credit union

money market account

a savings account offered by banks, savings and loan associations, and credit unions that requires a minimum balance and has earnings based on market interest rates

certificate of deposit (CD)

a savings plan requiring that a certain amount be left on deposit for a stated time period to earn a specified interest rate

money market fund

a savings-investment plan offered by investment companies, with earnings based on investments in various short-term financial instruments

credit union

a user-owned, nonprofit, cooperative financial insitution that is organized for the benefit of its members

rate of return

the percentage of increase in the value of savings as a result of interest earned; also called yiel

Annual Percentage Yield (APY)

The percentage rate expressing the total amount of interest that would be recieved on a $100 deposit based on the annual rate and frequency of compounding for a 365-day period

automatic teller machine (ATM)

a computer terminal used to conduct banking transactions; also called a cash machine

mutual savings bank

a financial institution that is owned by depositors and specializes in savings accounts and mortgage loans

commercial bank

a financial institution that offers a full range of financial services to individuals, businesses, and government agencies

debit card

a plastic access card used in computerized banking transactions; also called a cash card

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

overdraft protection

an automatic loan made to checking account customers to cover the amount of checks written in excess of the available balance in the checking account

share draft account

an interest-bearing checking account at a credit union