Chapter 10

Reconcile

To bring the bank statement and your own record of transactions into agreement.

True or False: ATMs owned by different banks can be part of an interconnected ATM network.

True

True or False: If you were to move across the country, you could direct your old bank to close your account and send the balance to the new bank as a wire transfer.

True

True or False: In general, commercial banks pay lower interest rates on savings accounts than credit unions.

True

True or False: Many businesses/companies offer an automatic payment system, in which your monthly payment is deducted directly from your bank account.

True

True or False: Most banks provide free ATM transactions to their own customers.

True

True or False: Online-payment services, such as paypal have been developed to make payments quick and safe.

True

True or False: Some banks/credit unions offer better interest rates and lower fees if you maintain a certain balance in your account.

True

True or False: The Financial Services Modernization Act made it possible for banks to offer insurance investment services to customers, and insurance companies to offer traditional banking services.

True

True or False: When you make a person-to-person payment at a web site offering a service such as paypal, the payee receives an email explaining how to collect the payment.

True

True or False: You can deposit, withdraw, and transfer funds using electronic banking.

True

If you make a mistake writing a check, you should...

Void the check and record the void in your register.

At your request, banks can automatically perform all of the following services EXCEPT...

Debit card advance

In an automated service called ___________ ____________ makes payments such as your paycheck or tax refund electronically transferred into the account you choose.

Direct Deposit

In the event of a bank failure, deposit insurance which is commonly referred to as ____________ protects you form losing the money in your accounts.

FDIC

True or False: ATMs are located in private, hard to reach places.

False

True or False: All of the money deposited in banks is kept on reserve at the bank.

False

True or False: Electronic banking raises costs for financial institutions.

False

True or False: An offline debit-card transaction requires you to enter you PIN into a keypad.

False.

True or False: You can purchase cashier's checks at any post office.

False.

True or False: You should wait one week to report a lost or stolen debit card.

False.

True or False: By law, the amount a person will be charged for using an ATM outside of their network must be told after you complete the transaction.

False. Before the transaction.

True or False:A certified check is guaranteed with a credit card.

False. It's guaranteed by the bank.

True or False: Banks make a profit because interest paid to savers is generally greater than interest paid by borrowers.

False. It's less.

If your checkbook is lost or stolen, some of your checks could be ____________ or used illegally.

Forged

Personal check

Functions as cash but can be replaced if lost or stolen.

Some individuals and businesses won't accept ________________checks because of the possibility of insufficient funds.

Personal

Paying by electronically transferring funds at the place of purchase is called a.....

Point-of-sale transaction

_______________ cards are also called stored-value cards/gift cards.

Pre-payed

If your ATM card is lost, you should...

Report the loss to the issuing bank as soon as possible.

A _____________ endorsement limits the use of a check, for example to deposit only.

Restrictive

The bank might automatically transfer money from ______________ to checking to cover a check for which the checking account has insufficient funds.

Savings

If you have a _____________ account, the bank pays you interest for letting it use your money.

Savings.

a PIN is a code that is concerned with the...

Security of your account.

A ____________ endorsement limits payment to a particular payee

Special

Electronic funds transfer(EFT) refers to...

The movement of funds by electronic means

Payee

The person to whom the check is made out to.

Endorsement

The signature on the back of a check that entitles the payee to receive the payment.

You can deduct money from your bank account to make a purchase by use of a...

Debit card

Credit Union

A nonprofit financial institution owned by it's members.

Money Order

A purchased certificate used to pay a specified amount to a particular payee.

You must be at least ________ years old to open a checking account with no co-signer.

18

If you don't report the loss of an ATM card within _____________, you may be liable for ALL charges made on the card.

2 weeks.

Prepaid card

A card sold in specific dollar amount that can be used to purchase products or services.

Certified Check

A check from a personal checking account that has been stamped by the bank to guarantee that there are sufficient funds tn the account to cover it

Cashier's check

A check issued and guaranteed by a bank.

Canceled check

A check that is stamped and sometimes perforated to show that it has been paid.

FDIC

A federal agency that insures savings, checking, and other deposit accounts in most banks.

Interest

A fee paid for the opportunity to use someone else's money over a period of time.

Commercial Bank

A financial institution owned by share holders and operated for their profit.

Internet Bank

A financial institution that offers online banking only.

Wire Transfer

A financial transaction that electronically moves funds from one bank to another.

What is a Charter?

A governmental document that grants a financial institution the right to operate.

What is a Credit Union?

A lending institution that is composed of members with a common bond, such as working for the same employer or belonging to a labor union.

Mutual savings bank

A state-chartered financial institution operated by trustees for the benefit of depositors.

Minimum Balance

Amount of money required to be kept in an account.

A __________ ____________________ shows an opening balance, a list of financial transactions conducted during the month, service charges, and the closing balance.

Bank statement

A _______________ ____________ provides legal proof of payment. It is a check that has successfully cleared your account.

Canceled Check

_______________ checks are often required for very large payments, such as the down payment on a home.

Cashier's

A written order that instructs a bank to pay a specific amount of money to a particular person or business is called a...

Check

When the bank lends some of your money to other people, those borrowers pay ______________ to the bank.

Interest.

Overdraft

Lack of sufficient funds to cover the full amount of a check.

If you cannot reconcile your bank statement's ending balance with your checkbook balance, you should do all of the following EXCEPT...

Look for the error when you receive the following month's statement.

To receive favorable banking terms, such as a better interest rate on your account or avoiding penalties, you may need to...

Maintain a minimum balance.

There are two type of _______________________ domestic and international.

Money orders

For Credit Unions, deposit insurance is administered by the __________.

NCUA

You can use your ATM card at nay teller machine displaying the same _____________ logo.

Network

Always shield the ATM screen and keypad from the view of others when you enter your _______.

PIN

_________________ banks can offer higher deposit rates and lower loan rates because they don't incur the costs of traditional "brick and mortar" banks.

internet.