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FIN LIT..
Vocabulary
| Question | Answer |
|---|---|
| Depository Institutions | Financial institutions that provide traditional checking and saving accounts for individuals and businesses. |
| Non depository Institutions | consist of institutions that provide certain financial services but do not accept traditional deposits. |
| Automatic teller machines | machines where you take cash out from your bank account. |
| Checking account | is an account at a bank into which you deposit money and withdraw money by writing checks or using a debit-card. |
| check | is a written order from you to your bank instructing it to pay money from your account to another party. |
| Negotiable order of withdrawal accounts(NOW) | function much like checking accounts expect they pay a small amount of interest on money in the account. |
| Debit card | enables you to withdraw cash from your account at ATM'S or to pay directly for goods or services at thousands of stores and restaurants. |
| Personal identification number | Are usually four digit numbers that you need to memorize in order to be able to use your debit card. |
| check register | a small ledger the bank will provide you for keeping track of your account balance. |
| Safety Deposit boxes | Small containers located inside the bank vault and are used to store valuable documents such as wills and small objects such as jewelry, rare coins, and legal documents. |
| Cashier's check | is a type of check that is written to a specific payee but charged against the bank instead of your account. |
| Money orders | function in a similar way to cashier's check. they are purchased for cash so that the recipient can trust that they are worth what they say they are. USPS sells money orders |
| Travelers checks | are checks written by a large financial institution with no payee specified. |
| Bank drafts | occur when you authorize someone to take money out of your bank automatically to satisfy some financial obligation. |
| Electronic funds transfer | Bank drafts are an example of electronic funds transfer. When ever you are allowing someone to access your bank account for payment or for deposit, you are utilizing electronic funds transfer. |
| Federal deposit insurance corporation | (Major federal insurer) was created during the great depression. FDIC puts insurance on the first $250,000 of deposits on insurance. covers checking accounts and saving accounts/ NOW/ CERTIFICATE DEPOSITS ACCOUNTS |
| Credit Unions | function similarly to banks. Unlike banks, however credit unions have nonprofit status and it owned by its members. |
| National credit union savings insurance fund | Provides deposit insurance with the same limits as FDIC insured deposits. backed by the federal gov't so that people can have faith in the financial system. |
| Federal reserve system | which serves as the central bank of the united states. the fed regulates banks, making sure that they follow rules and practices designed to ensure a sound banking system. |
| price level stability | a main goal of the FED. means making sure that we don't have inflation or deflation. |
| Inflation | is defined as a sustained increase in the general level of prices. |
| Monetary policy | involves raising or lowering of the money supply to achieve some goal. |
| Fiat Money | has value not because the coins and bills have some value in their own right, but because the government orders that it be accepted as a payment. |
| Discount rate | is the interest rate the fed charges the banks when it lends them $. |
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