personal finance checking/banking terms

how old must you be to have a student's checking account

13-17

how old must you be to have a checkings account

18

what is interest

A fee paid for the opportunity to use someone else's money over a period of time

what is mutual savings bank

State chartered operated b trustees for the benefit of depositors

what is an overdraft

a fee that is charged when your bank balance falls below $0

what is a debit card

card that allows user to subtract money for a bank account in order to obtain cash or make a purchase

Bear wants to know about online banking. Please tell Bear which of the following cannot be done by online banking?

cash a check

what does the FDIC do

regulates commercial banks; insures your money up to $250,000 an account

Meagan wants to deposit her paycheck. She will not be going to the bank until tomorrow. What is her best choice for endorsing her work check?

restrictive

check number symbol: SF

service fee

what happens if you lose your atm card

1) call your bank asap 2) if you report it missing within two days, you are only liable for $50 if someone else racks up a huge bill 3) after two days, you could be liable for $500

what are credit unions

Nonprofit institution owned by its members

what is an internet bank

Operates exclusively over the Internet

if an error is made when writing out a check, what should be done

VOID

Joint account

a bank account held by more than one person, each individual having the right to deposit and withdraw funds

Postdated check

a check on which the issuer has stated a date later than the current date.

Certified check

a check that has been verified by the bank the funds are drawn on as "good."

Safe deposit box

a metal box, usually housed in a bank vault, that customers can rent in order to keep valuables, legal documents and other prized possessions in a secure location.

Online banking

a method of banking in which transactions are conducted electronically via the Internet

Stop payment

a request made to a financial institution to cancel a check or payment that has not yet been processed

what is a stop payment

a request that a bank not cash a particular check

Deposit

a sum of money placed or kept in a bank account, usually to gain interest.

Non-Sufficient Funds NS

a term used in the banking industry to indicate that a cheque cannot be honored because insufficient funds are available in the account on which the instrument was drawn

Check

a written, dated and signed instrument that contains an unconditional order from the drawer (also called the payor) that directs a bank to pay a definite sum of money to a payee

Checking account

an account at a bank against which checks can be drawn by the account depositor

FDIC - Federal Deposit Insurance Corporation

an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failures

Commercial bank

an institution that provides services such as accepting deposits, providing business loans, and offering basic investment products

how do banks make their money

charging a rate of interest on loans higher than the interest paid on savings account

Cashier's check

check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier

Where do you record all of the checks you write, deposits you make, and ATM transactions you make?

check register

Canceled check

check that has cleared the depositor's account and has been marked "canceled" by the bank

what is the credit column

column in the check register that you place the dollar amount for any transaction that adds funds to your account (deposits or interest earned)

what is the debits column

column in your check register that you place the dollar amount for any transaction that subtracts funds from an account (including cash withdrawals, checks written on the account and fees charged by the bank)

what is important to do with rates and fees

compare interest rates, fees, do your homework

Mike is looking for a non-profit financial institution that is owned by the shareholders and pay dividends based on income. What type of financial institution would Stan look for?

credit union

what is a non-profit financial institutions that are owned by shareholders and pays dividends

credit union

check number symbol: DC

debit card

check number symbol: DEP

deposti

what is a deposit slip

document that accompanies ban deposits, showing the account holder's name and account number and the amount to be deposited

ATM

electronic computer terminals which offered automated, computerized banking

what is an online purchase

enter your pin into a keypad, money is immediately taken out a checking account, and transaction is denied if there are insufficient funds

After you electronically deposit check, what should you do with the check?

file it until it clears (bank processes it) and then shred it

Deanna uses her ATM three (3) times a week which could be in or out of network. Which of the following would be best for her?

free ATM transactions

what is a direct deposit

funds that are transferred

what do automated transfers do

have a certain amount of money split between your checkings and savings account

what does the fdic do

insures savings, checking, and other deposit accounts up to $250,000 per depositor

what two things can do you do with a debit card

make an online purchase or offline purchase

what are fees

monthly service charges, fees for each check you write, ATM

check number symbol: OL

online

what do we refer to those items that are not on her statement but are on the register

outstanding

what are automated payments to the third party

paying bills online

Debit card

plastic card which looks like a credit card, but is electronically connected to the cardholder's depository institution account for purchases

Bank reconciliation

process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

Colleen just received her bank statement at the end of the month. She now needs to compare her bank statement to her check register. What is the process called when Lisa will compare the two?

reconciliation

how does eft benefit the consumer

reduce costs & is very convenient for customers over the Internet

what is the electronic funds transfer act

says that banks must provide customers with a record of receipt for all transactions

what are the advantages of online banking

see your recent transactions, conduct transactions at home, it is free, and it saves time

Overdraft protection

service offered by banking institutions on their checking accounts that covers an account holder's transaction even if their account lacks sufficient funds

what should someone do with their old checks when they switched their banks

shred it

Cameron is switching banks because he is going away to college. He has unused checks at his house. What is the best option for Marvin to do with all the unused checks?

shred them

Bounced check

slang for a check that cannot be processed because the account holder has nonsufficient funds

Credit card

small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit

what is standard overdraft protection

some banks automatically transfer money to avoid a check bouncing

what are transaction limits

some banks only allow a certain amount of transactions a month

Sherri just got a check from her work for $50.00. She owes her friend Becky $50.00. Sheri is going to sign her check from work over to her friend. What type of endorsement does Sherri have to use?

special

what is the minimum balance

stay above the minimum to avoid paying a fee

what is the purpose of a signature card

teller can use it to prevent checks from being forged or illegally used

Direct deposit

the electronic transfer of a payment directly from the account of the payer to the recipient's account

Check register

the journal used to record all of the checks, cash payments, and outlays of cash during an accounting period

what does eft mean

the movement of funds by electronic means

what is a withdrawal

the removal of cash from an account either at the bank or at an ATM

what is a net deposit

this is the line you should look at from your deposit slip to determine the amount to enter in your check register

what is an offline purchase

use the debit card as if it were a credit card if it has a logo of a credit card company, money is not immediately taken out of a checking account, and an overdraft fee if there are insufficient funds

how are funds moved electronically

usually done at an ATM, phone, and Internet

Electronic funds transfer

utilize computer networks to transfer funds electronically (rather than by check or cash) among various depository institution accounts

what is an automated loan payment

when you have your loan deducted from your checking account

what is NSF

when you make a withdrawal and there's not enough money in your account

Withdrawal

when you take money out of a bank account

what can you do with an atm

withdraw cash, make deposits, transfer money between accounts, and check account balances

Jen is writing a check to her friend Tiffany for getting her hair done. Tiffany is charging Jen $50.00. By mistake Jen wrote the check for $500.00. Jen does not want to use that check anymore, so she writes another for the correct amount. What should Jen do with the check she is not using?

write VOID on the check and record the number in the check register

Jim is shopping online for his favorite pair of shoes. Jim finds the shoes on sale and decides to buy them. What would be Jim's best choice for payment in this situation?

Use a credit card so he will be able to monitor his funds

check number symbol: ATM

ATM

what is commercial banking

Owned by shareholders and operated for their profit ; insured by FDIC up to $250,000

what is savings and loans institution

Specialize in providing funds to home buyers, owned by depositors

Endorsement

The payee's signature on the back of a check indicating that the payee has received the check