Chapter 17 intro
Banks that join the federal reserve system are known as ...
Member banks
is a savings bank that is owned by, and operated for the benefit of, its depositors
Mutual savings bank
Can you open an account in a Federal Reserve Bank? Why?
No because it is a bank for banks
specialized in savings accounts and making loans for home morgages
Savings and loan association (S&L)
if you only write a few checks each month, your account is considered
a special checking account (aka an activity account)
One of the main services that financial institutions offer is ...
accepting money from customers for safekeeping
With______, the bank deducts payments from your account and transfers them to the appropriate companies
automatic bill payment
requires a bank customer to authorize preset amounts of monthly expenses
automatic bill payments
where do you endorse a check
back of the left end
sold by a bank stating that money is to be paid to a specific person or business
bank money order
-the balance at the beginning of the month -the deposits made during the month -the check is paid by the bank during the month -any automated teller information during the month -EFT or special payments the bank has made -service charges for the month -any interest earned on the account -the balance at the end of the month
bank statement information
what does cleared mean
been paid
an endorsement that consist of only the endoser's name
blank endorsement
Banks might not return actual __________ _________ that have been paid . Instead, banks can use a ____________ ___________ which is a digital reproduction of the original paper check
cancelled checks, substitute check
a check that the bank draws on its own funds
cashier's check
a personal check for which the bank has guaranteed payment
certified check
debit cards such as mastercards and visa
check cards
a form attached to the check by a perforated line
check stub
used by people who don't have bank accounts and they cash paychecks and obtain other financial services
check-cashing outlets
types of payment services include
checking accounts, debit cards, online payments, and automatic withdrawls
The paying of checks among different banks in different cities is called...
clearing
refers to the process of paying checks and other payments among different banks
clearing
The most common way for a bank to be organized
commercial bank
A business that specializes in making loans for long lasting, durable goods such as cars and refrigerators, and for financial emergencies
consumer finance companies
This non-deposit financial institution specializes in making loans for long-lasting or durable goods, such as cars and refrigerators, and for financial emergencies
consumer finance company
borrowing money to pay back later
credit card
people in the same company, government agency, labor union, or profession often form __________ _________
credit unions
for atm transactions
debit card
WHat are the two types of financial institutions?
deposit and non-deposit
commercial banks, savings and loan associations, mutual savings banks and credit unions are a part of which financial institution?
deposit institution
accept deposits from people and businesses use them to finance their buisness
deposit institutions (depository intermediaries)
when you deposit money in a checking account, you fill out a ...
deposit slip
funds are deposited electronically and available automatically for your use
direct deposit
refers to the use of computers and other technology for banking activities
electronic banking
ATMs, personal computers, cell phones, and other electronic devices are all...
electronic banking services
This type of money order is typically issued by travel agencies, supermarkets, pharmacists, and convenience stores
express money order
issued by various organizations including traveler's check companies, travel agencies, and many supermarkets/pharmacies/ convenience stores
express money order
The federal agency that helps to regulate banks and other financial institutions
federal deposit insurance corporation (FDIC)
allows you to transfer checks to another person
full endorsement (special endorsement)
What do you do when you put money in a bank?
help create jobs and economic growth which benefits your community and your society
As a result, a bank will lend only a certain percentage of deposited funds. It keeps the rest in reserve. This regulation is designed to...
help the banking system and the economy to operate efficiently and to protect deposits
people can choose investment opportunities for long term growth of their money through _______________ ______________
investment companies
will allow financial activities and other business transactions based on your geographical position
location based services
how are mutual savings banks organized
mainly for savings and home loans
Who do credit unions serve
members only
provide loans for buying a home or other real estate
mortgage companies
They do not take or hold deposits. They earn their money selling specific services or policies
non deposit institutions
life insurance companies, investment companies, consumer finance companies, mortgage companies, check cashing outlets, pawnshops are a part of which financial institution?
non-deposit institution
make loans based on the value of some tangible object
pawnshops
a merchant accepts a debit card to pay for purchases
payments at the point of sale
purchased from the U.S. post office can be sent safely through the mail
postal money order
Typical e-banking services allow customers to do all of the following EXCEPT...
print new checks
bringing the balances into agreement is known as
reconciling the bank balance
Bonita writes many checks each month. Which type of checking account is probably the best choice for her?
regular checking account
What are the three types of checking accounts
regular checking accounts, interest earning checking accounts, and special checking accounts
Zack has endorsed a check by writing "For deposit only" above his signature. This is a...
restrictive endorsement
limits the use the check to the purpose given in the endorsement
restrictive endorsement
Mutual savings banks are organized mainly for...
savings and home loans
What should you think about when selecting a financial institution?
services offered, safety, convenience, fees and charges, and restrictions
A checking account at a credit union
share draft(because the members are called shareholder
requires your legal name, address, phone, social security number, driver's license number and email address
signature card
electronic wallets similar to ATM cards
smart cards
prepaid cards for for phone service, transit fares, highway tools, and school lunches
store-value cards
involves buying a message to direct a telegraph office to pay a sum of money to a certain person or business
telegraphic money order
When you use a debit card in a store or restaurant,
the amount of the purchase is deducted from your bank account
What makes banking services possible?
the savings you and others deposit
why do people buy life insurance copanies
to provide financial security for their dependents
special forms designed for making payments when away from home
travelor's checks
The money or other property that is turned over for the bank is said to be held in ______________
trusst
An interest-earning checking account
usually earns interest only if the account stays above the required amount
If the interest earning checking account falls below the required amount, the bank ...
usually pays no interest and may add a service charge
first and last steps of writing a check
write checks in order by number, sign checks with the same signature you wrote on signature card
first and last step of proper check writing
write checks only on the forms provided by your bank, record every payment from your checking account
what is the minimum balance for regular checking accounts
$300
What are the banking services that individuals, businesses and governments use
-borrow money to build roads -borrow money to buy seeds for crops -deposit cash from business operations -finance a college education -invest for retirement -obtain a morgage -process credit card transactions -save for vacation
Name some federal reserve services
-holding of reserves -clearing checks
What are the four basic types of banking services that you will use
1. savings accounts 2. checking and payment accounts 3. loans and other credit plans 4. other services, such as safe-deposit boxes and investment advice
how to calculate the adjusted balance
1. subtract the total of the outstanding checks from the bank statement balance 2. add any deposits in transit to the balance statement balance 3. subtract service charges, fees, and automatic payments from your checkbook balance 4. add any interest earned to your check register balance
how much do banks charge for each check
10 to 20 cents
The United States is divided into ________ federal reserve districts
12
A lost or stolen debit card can be expensive. If you notify the financial institution within two days of the lost card, your liability for unauthorized use is $__. After that, you can be liable for up to $____ of unauthorized use for up to __ days
50, 500, 60
traditional banker's hours
9am to 3pm
an automatic teller machine that allows many banking services
ATMs (cash machine)
