Ch.4 Managing your cash and savings

Non-depository institutions accept cash contributions from their customers, but the cash inflows are not called ______________; instead, they're called shares or premiums.

deposits

Which of the following are examples of an interest-earning checking account?

-Negotiable order of withdrawal (NOW) account -Share draft account

If you wanted to purchase ownership interests in diversified portfolios of investments, which type of financial product provider should you contact?

A mutual fund

If you wanted to purchase investment advice, as well as stocks, bonds, and other investments, which type of non-depository institution should you contact?

A stock brokerage firm

This is the process of verifying accuracy by comparing the balance on the check register, or ledger with the balance on the bank's statements.

Account reconciliation

In an arrangement that seems inconsistent, mutual savings banks are insured by the...

BIF

This is the term applied to the practice of routinely managing an individual's or family's cash and near-cash assets.

Cash management

This form of check is drawn on the account of a financial institution and is backed by the creditworthiness of the institution. It is often required by sellers in lieu of a personal check.

Cashier's check

This is the name applied to interest earned on the sum of the initial deposit and interest earned in prior periods.

Compound interest

This is the general name given to an account that allows the account holder to access the funds through a variety of banking options such as ATM withdrawals, online banking, using debit card or through a teller.

Demand deposit

This product, offered by the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), protects depositor funds against the failure of the insured depository institution.

Deposit insurance

These financial institutions accept checking and savings deposits from individuals and business, and include commercial banks, savings banks, and credit unions.

Depository institution

Commercial banks, savings banks, savings and loan associations (thrifts), and credit unions

Depository institutions include:

This account imposes limits on the number of checks that an account-holder can write per month.

MMDA

This account pays the highest interest rate of any checkable account.

MMDA

Funds held in federally chartered credit unions are insured by the...

NCUSIF

Mutual funds, insurance companies, brokerage firms, and financial services companies

Non-depository institutions include:

This is the condition that results when an account holder withdraws more money than is currently in the account.

Overdraft

This is the name given to interest that is paid only on an investor's initial investment and not on any previously earned interest.

Simple interest

This is a deposit held in a financial institution for a fixed period of time. Usually depositors can withdraw the money from the account after the committed time period.

Time deposit

Depository institutions are required to ______________________ and ________________, although the general terms used to describe these financial products may vary across the various types of institutions.

accept deposits and make loans