44 terms

World of Business Chapter 13 Banking

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Chartered Banks
A financial institution that has received a charter or licence from the federal government to operate in Canada; operates under the federal Bank Act; entitled to use the word "bank."
Branch Banking
A banking system in which there is a head office and interconnected branches or outlets providing financial services in different parts of
the country.
Bank of Canada
A bank operated by the federal government that is Canada's central bank; it controls the money supply.
Money Supply
The total amount of money in circulation in Canada, including cash and deposits and savings in financial institutions.
Bank Rate
The minimum rate of interest charged by the Bank of Canada for loans made to the chartered banks; also called the prime lending rate.
Prime leading rate
The minimum rate of interest charged by the Bank of Canada for loans made to the chartered banks; also called the prime lending rate.
caisses populaires
A type of credit union, located mainly in Quebec.
credit union
A financial institution organized, owned, and controlled by people with a common bond, such as employees of a private business or government organization.
insurance companies
Financial institution that insures risks.
joint account
A financial institution account shared by two or more people.
signature card
A financial institution's official record of a customer's handwritten name, used to verify a customer's identity.
account statement
A monthly record of all transactions in a bank account.
automated banking machines (ABM)
A computer terminal that allows customers to withdraw, deposit, and transfer money with a coded access card.
Personal identification number (PIN)
A special customer code number or electronic signature used with a coded card to operate an ABM.
Transaction accounts
A type of account in a financial institution used to deposit money needed for everyday use, such as paying bills, rather than for savings.
Transaction register
A record similar to a passbook, used with a transaction account.
Straight transaction account
A basic account meant
for paying personal and household bills.
combination account
An account that offers both savings and chequing features and that may pay interest on deposits.
service charge
A fee charged for a service provided; a processing fee.
cancelled cheque
A cheque that has been cashed and paid by the financial institution.
current accounts
An account in a financial institution for business, not personal, use.
reconciliation
In relation to financial institutions, checking bank statements against personal records to ensure that they agree.
Outstanding cheques
A cheque that has not been cashed and deducted from your bank statement balance.
staledated cheques
cheques that are six months after the date that was shown on them
postdating
Putting a future date on a cheque.
payee
The person or business to whom a cheque is
made payable.
drawee
The financial institution on which a cheque is drawn.
drawer
The person or business from whose chequing account money will be taken.
stop payment
An order requesting a financial institution not to pay a particular cheque.
cheque clearing
The processing of cheques and the settling of account balances among financial institutions.
MICR
a string of number under a preprinted cheque. It contains account number, cheque number and institution and branch number. Type of transaction and amount in the cheque is later added during account clearing.
hold
A delay in clearing a cheque, imposed by a financial institution.
EFTS
The electronic funds transfer system (EFTS) is a computerized system of electronic deposits and withdrawals. It provides customers with faster and less costly service, while reducing the need for cash and cheques.
IDP
In 1993, Interac Direct Payment (IDP) became available across Canada. With direct payment, consumers can use their ABM cards as debit cards to pay retailers on the spot for goods and services, rather than paying cash, writing cheques, or using credit cards.
debit cards
Another name for a bank card that allows customers to access their accounts electronically
at ABMs or at retailers using the Interac direct payment service.
online banks/ virtual banks
A service that allows customers
to conduct banking activities from their personal computers through their financial institution's website.
term loan
A form of borrowing in which the borrower agrees to make fixed payments over a set period
of time.
line of credit
A form of borrowing that allows access to credit up to a maximum amount agreed on between the borrower and the financial institution.
direct deposit
A banking service that allows funds such as wages or government payments to be transferred directly into a specific account.
money order
A form of payment, like a cheque, in which the issuing institution guarantees to pay the amount shown on the form to a payee.
draft
A secure method of sending a large amount of money.
night depository
A secure, locked deposit facility at a financial institution that lets business clients make deposits at any time, especially after hours.
overdraft
A temporary loan from a financial institution that results when the institution pays a cheque written for more money than is in the drawer's account.
preauthorized debit
A regular, automatic withdrawal
from a bank account.
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