PFin - Ch 5 - Banking Procedures
debit card
A bank card that allows the account holder to make purchases and to withdraw cash from an account at an ATM
stop payment
A bank service that directs the bank not to honor a check you wrote or lost
cashier's check
A check issued by the bank against bank funds
bounced check
A check that is returned by the bank for non-sufficient funds (NSF); also called a bad check
postdated check
A check written with a date that will occur in the future
checking account
A demand deposit that allows the account holder easy access to the money and allows checks to be written on the account
savings account
A demand deposit that has some restrictions as to how quickly or easily you can get your money
certificate of deposit
A deposit of money set aside for a fixed amount of time at a fixed interest rate
U.S. savings bond
A discount savings bond issued by the U.S. government
Rule of 72
A math formula that calculates how long it will take for money earning a set rate of interest to double
checkbook register
A record in which transactions of a checking account (checks, other withdrawals, deposits, and fees) are kept
money market account
A savings option that pays the current market rate of interest on the money deposited and may have restrictions on withdrawals
endorsement
A signature or instructions written on the back of a check authorizing a bank to cash or deposit the check
money order
A type of check used to pay bills or make a payment for which the money is guaranteed
check
A written order to a bank to pay the stated amount to the person or business named on the check from a certain account
monetary policy
Actions taken by the Federal Reserve to influence money and credit conditions in the economy in an effort to affect employment levels and prices
principal
An amount of money that is set aside (saved or invested) on which interest is paid
prime rate
The interest rate that banks charge to their most creditworthy business customers, such as corporations
federal funds rate
The rate at which banks can borrow money from the excess reserves of other banks
discount rate
The rate banks are charged to borrow money from the Federal Reserve
compound interest
Interest that is earned on both principal and interest previously earned on savings
deposit
Money added to a checking, savings, or other financial account
automatic withdrawal
Money deducted from an account and electronically transferred to another party
automatic deposit
Money electronically added to a checking or savings account; no currency or paper checks are involved