personal finance banking

pay yourself first

from a young age put some of your paycheck into your savings account for your retirement

Regulation D

limits withdrawal and transfer transactions to and from savings account from ATMs and online banking up ti six times a month. transfer $5000 a day, $10,000 a month, past history will show 12-18 months

commercial bank

place to hold money, borrow money

restrictive endorsement

receiver writes for deposit only with their account number above their signature, the check is only allowed to be deposited

special endorsement

receiver writes pay to the order of that person's name and below signs their name. The check is allowed to be transferred to the second party and they can do what they wish with it.

cons online

security

emergency funds

2-3 months of take home salary 6 months of home expenses

rule 72

72/ growth rate

Certified Bank Check

A certified check is a personal check written by an account holder, drawn on the holder's account and guaranteed by the bank. See what some banks charge for certified checks With a certified check, the bank or financial institution makes sure that the signature is genuine and that the account holder had enough money in the account to cover the check at the time it was written. The bank then sets aside the full amount of the check to guarantee the money will be available when the check is cashed or deposited.

Automatic withdrawals

A type of mutual fund that lets shareholders receive a fixed payment from dividends on a monthly or quarterly basis. Arrangement under which an investor receives periodic cash payments withdrawn from his or dividend or capital gains income.

How banks earn a profit

The banks lend money to customers at a higher rate than they pay to depositors or than they borrow it. The difference, known as the margin or turn, is kept by the bank. For example, if a bank pays 1% interest on deposits, they may charge 6% interest on loans.

Check clearing

The movement of a check from the depository institution at which it was deposited back to the institution on which it was written; the movement of funds in the opposite direction and the corresponding credit and debit to the involved accounts. The Federal Reserve operates a nationwide check-clearing system.

Overdraft protection fee

a line of credit that banks offer to their customers to cover their overdrafts. Overdraft protection kicks in when a customer writes a check for more than the amount in their account. Also referred to as "cash reserve checking." $35-$25 You will be charged no more than four (4) overdraft and insufficient funds fees per day for Consumer accounts and no more than eight (8) per day for Business accounts.

bank card

a plastic card issued by a bank which enables a customer to withdraw money at an automated teller machine.

Stop Payment fee

a request made to a financial institution to cancel a check or payment that has not been processed yet. It is issued by the account holder and only can be enable if the payment hasn't been processed by the recipient. $30s

Money market account

are typically meant for larger balances that you need to access less often than money in a traditional savings account. On average these accounts offer higher interest than savings accounts- but tradeoff may be minimum balance requirement to open the account or a limitation on the number of transaction you can make for free in a give period.

cash card

can be any card that you can insert into an ATM or other cash dispenser, or a pre-paid credit card, or a card with a preset cash value from a particular store (Costco or Subway), which is read by a cash card reader and used to pay for products or services at that retailer.

CDs

certificate of deposit put money into and leave it in for certain amount of time and a set interest rate. Can't take money out until the time is up, if you do you will be penalized. insured up to $250,000, electronic, issued by banks, long-term CDs have higher interest rates when compared to short-term CDs. There is more uncertainty and risk associated with holding the investment for a long period of time. In addition, because an individual is forgoing the opportunity to utilize the funds for a specific period of time, he is compensated by earning more interest.

short term financial goals

debit cards, car, savings for emergency funds, online banking, loans

electronic bank

ebank, no physical bank, refund atms, cashing checks is a problem

What to consider when evaluating a bank

how close it is to house, Security of your funds, Fees, Ease of deposit, ATM fees, Interest rates (the rates you receive on your money on deposit with the bank(higher), and the rates you pay when borrowing via credit card or loan(lower)), Online banking features, Minimum balance requirements, Customer service, Availability of funds.

ATM card

is any payment card issued by a financial institution that enables a customer to access an automated teller machine (ATM) in order to perform transactions such as deposits, cash withdrawals, obtaining account information, etc.

middle and long term goals

loans, cashier's check- drawn on the bank, budgeting

Credit Union

members only, nonprofit, better rate of return

Direct deposit

money automatically transferred into your account by an employer and can become available quickly

current balance

money in transit that hasn't cleared into checking account yet

Available balance

money that you can spend

wire transfer

moving money electronically from one bank to another, there is a fee $15-30

insufficient funds fee

occurs when someone tries to purchase an item using a check or debit card without having enough money in his and her bank account. $20-40

Payee vs payor

payee- a person to whom money is paid or is to be paid, especially the person to whom a check is made payable. payor-A person who pays a debt or who is obliged to pay a debt by some written instrument.

blank endorsement

receiver of the check signs his or her name, anyone can cash or deposit the check after it has been signed. only a signature

Compounding interest

the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously-accumulated interest.

FDIC Insurance $250,000

the federal banks insure all money in account all the way up to $250,000

bank fraud

the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution.

ATM transaction fee

usage fees are the fees that many banks and interbank networks charge for the use of their automated teller machines (ATMs). In some cases, these fees are assessed solely for non-members of the bank; in other cases, they apply to all users. ... Two types of consumer charges exist: the surcharge and the foreign fee. $1.50-$3

pros online banking

you can access it anywhere, you don't have to wait for a bank teller, you can pay your bills.

safety deposit box

you can put anything in it and it can't be open without a court order, bank can't know whats in it.