Personal Finance-Unit 4: Banking Services

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Financial Institutions

an institution (public or private) that collects funds (from the public or other institutions) and invests them in financial assets

Depository

A bank or company which holds funds or securities deposited by others, and where exchanges of these securities take place.

Commercial Banks

a type of depository financial institution; business banking.

Savings Banks

a type of depository financial institution that offer savings services, savings accounts, etc. These are usually combined with Commercial Banks.

Credit Unions

a type of depository financial institution that is owned and controlled by its members.

Non-depository financial institution

a financial institution that funds their investment activities from the sale of securities or insurance.

Insurance Companies

a type of non-depository financial institution that sales insurance

Finance Companies

a type of non-depository financial institution that makes loans to individuals and businesses

Security

a financial instrument issued by a corporation or government, which offers evidence of debt or equity.

Brokerage Firms

a type of non-depository financial institution that conducts various aspects of securities, trading, analysis, and advisory services.

Investment Companies

a type of non-depository financial institution who's main business is holding securities of other companies purely for investment purposes.

Savings & Loan Associations

a financial institution which specializes in accepting savings deposits and making mortgage loans.

Investment Services

the activities of dealing, arranging and managing banking services.

Checking Account

An account which allows the holder to write checks against deposited funds.

Demand Deposit Account

An account balance which can be drawn upon on demand, i.e. without prior notice.

Share/Draft Account

Refers to a regular share savings account and any other account that isn't a share certificate account; at credit unions.

Passbook Savings Account

savings account in which deposits and withdrawals are recorded in the depositor's passbook.

Interest-Bearing Account

An account that pays interest on the money deposited.

Signature Card

A document establishing the account ownership and the account terms and obligations of both the institution and the customer.

Cancelled Check

A check cleared by a financial institution. A cancelled check may serve as proof of payment.

Outstanding Check

A valid check which, although possibly already cashed, has not yet been returned for processing to the financial institution from where it originated.

Overdraft/Insufficient Funds

The amount by which withdrawals exceed deposits, or the extension of credit by a lending institution to allow for such a situation.

Bounced check

A check which a bank returns because it is not payable due to insufficient funds. also called rubber check.`

Overdraft Protection

A checking account feature in which a person has a line of credit to write checks for more than the actual account balance.

Stop Payment Order

An order to a bank not to honor the payment of a check after it has been delivered but before it has been cashed.

Statement

A written presentation, such as of financial data.

Average Daily Balance

The average amount that exists in an account over a period of time.

Minimum Balance

The minimum amount a bank or other financial institution requires a customer to maintain in his or her account.

Service fee/charge

charges imposed by a bank for various services before account balances drop below a minimum.

Withdrawal free

charge collected when money is taken out of the account

Reconciliation/Balance

adjusting one's checkbook balance to match the bank statement.

Usury

charging an illegally high interest rate on a loan.

FDIC Insurance

A federal agency that insures deposits in member banks and thrifts up to $100,000.

NCUA Insurance

A national agency that insures credit union accounts up to $250,000.

Federal Reserve Bank/System

One of 12 regional banks established to maintain reserves, issue bank notes, and lend money to member banks.

Fiscal Policies

Decisions by the President and Congress, usually relating to taxation and government spending, with the goals of full employment, price stability, and economic growth.

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