Unit 2 banking

PIN number

a short number that you use to access your account often from a ATM

deposit slip

a slip of paper to keep track of your deposits at one single time

phishing

a technique to gain personal information for the purpose of identity theft, usually by means of fraudulent e-mail

automatic payment

Routine, automated payments made from a banking, brokerage or mutual fund account to vendors

compounding

The accumulation of a sum of money in, say, a bank account, where the interest earned remains in the account to earn additional interest in the future

monetary policy

The management of the money supply and interest rates

checking account

an account that gets no interest but is used for everyday expenses

savings account

an account used for you to put away money for a longer period of time

ATM

an automated teller machine, allowing you to withdraw money from your accounts from the machine

stop payment order

an order issued to void or cancel a check

endorsement

blank: just signing your name on the back of a check Special: endorsing the check to be payed to a specific person Restrictive: for deposit only into your account and signing your name

cash management tools

different accounts and strategies we use to manage our money such as savings, checking, money market accounts and bonds and certificate of deposits

money market account

requires a minimum deposit and you have a certain number of checks you can write from that account and gets a good interest rate

70-20-10 rule

70% of the money can be spent, 20% should be saved, and 10% should be invested

cashiers check

A check that a bank draws on its own funds.

pay yourself first

A phrase commonly used in personal finance and retirement planning literature that means to automatically route your specified savings contribution from each paycheck at the time it is received

investment pyramid

A portfolio strategy that allocates assets according to the relative safety and soundness of investments.

money order

A written order for the payment of a sum to a named individual

bank reconciliation

Bringing into agreement a bank statement with your account records

non deposit institutions

Do not take or hold deposits. Earn their money by selling specific services or policies

direct deposit

Electronic funds that are deposited directly into your bank account rather than through a paper check.

Debit card

a card that is directly linked to your checking account, buy now pay now

CD

a certificate deposit requires you to wit for a maturity date and compounds interest over time

commercial bank

a for profit organization that offers many banking benefits to its bankers and customers

FDIC

a government run agency that insures your bank accounts

credit union

a non for profit organization run by a group of people that offer benefits and services to those in the credit union

check

a piece of paper used to transfer funds from your account into someone elses

check register

a register in your checkbook used to keep track of your account balance

bonds

government issued investment that requires you to wait for the required date to get the face value of the bond

methods of payment

how someone pays for a transaction

new balance

money available after previous transactions

overdraft protection

protects your account in case of an overdraft where you accidently spend more money than you have in your account

federal reserve

the central banking of the united states

rate of return

the increase or decrease in the original purchase price of an investment.

travelers checks

use by people who travel, checks are printed in certain dollar amounts, are prepaid and considered safe means for carrying money when traveling

Identity theft

when someone steals you social security number and opens up accounts in your name or uses your accounts to buy things for themself