Money Management - Chapter 5 - The Banking System
simple interest
Interest computed on principal once during a certain time period
compound interest
Interest earned on both principal and previously earned interest
withdrawal
Taking money from your account
Rule of 72
A quick formula for computing how long it will take to double money invested at a given interest rate
endorsement
A signature on the back of a check
smart card
A card that contains a computer chip that stores electronic money
debit card
A card used to withdraw or deduct money from your checking account
cashier's check
A check issued against the bank's funds
bounced check
A check that is returned to the payee's bank due to nonsufficient funds
money order
A check used to pay bills for which money is guaranteed
postdated check
A check written with a date that will occur in the future
savings account
A demand deposit account designed for the accumulation of money in a safe place for future use
checking account
A demand deposit in a bank on which checks are drawn
U.S. savings bond
A discount bond issued by the federal government
annuity
A fixed amount set aside on a regular basis over time
principal
A sum of money set aside on which interest is paid
certificate of deposit
A time deposit that pays a fixed rate of interest for a specified length of time
checkbook register
A tool used to track checking account transactions
money market account
A type of savings account that earns the market rate of interest on the money deposited
check
A written order to a bank to pay a stated amount to a person
Internet banking
Accessing and managing your account online
inactive account
An account that does not meet minimum usage requirements
stop payment
An instruction to the bank not to honor a check that has been issued or lost
deposit
Money added to a checking or savings account
floating a check
Writing a check and planning to make a deposit later to cover it before the check is processed
