Banking Flashcards
50-20-30 Rule
A popular savings rule of thumb in which 50% of your income goes towards necessities, 20% goes towards saving and debt repayment, and 30% goes towards flexible spending
ATM
Automatic Teller Machine. Allows a person to manage a bank account holder’s funds through actions such as withdrawing or depositing money, viewing account balances, etc.
Balance
The amount of money you have in your bank account
Bank Statement
A monthly document prepared by your financial institution which shows all of the transactions related to your account
Certificate of Deposit (CD)
A bank product that earns interest on a lump-sum deposit that’s untouched for a predetermined period of time
Check
A written, dated, and signed order to the bank that tells it to pay a definite sum of money to a payee
Check Cashing Store
A business that cashes checks and gives the customer cash in exchange for a fee for the service
Compound Interest
Reinvesting earned interest back into the principal, so that interest is calculated on both the initial amount and the accumulated interest
Credit
A sum of money deposited INTO an account
Credit Card
A card that allows the holder to make purchases without cash by borrowing money
Debit
A sum of money deducted FROM your account
Debit Card
A card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check
Deposit
Money you put into your account
Direct Deposit
An automatic electronic deposit of net pay to an employee’s designated bank account
Emergency Fund
Money set aside for unanticipated expenses or loss of income
Endorse
To sign the back of a check made out to you so it can be cashed or deposited
FDIC Insurance
Protection provided by the Federal Deposit Insurance Corporation; protects the deposits of customers against loss up to $250,000 per account
Federal Deposit Insurance Corporation (FDIC)
The government agency that insures customer deposits if a bank fails up to $250,000 per individual depositor
Health Savings Account (HSA)
An account in which you can save pre-tax dollars to pay for out-of-pocket health care expenses
Inflation
The rate at which the price of goods increases and consumer purchasing power decreases over time
Interest
A fee paid to you for keeping your money in an account OR a fee charged to you for a loan or credit card
Impulse Buying
The buying of goods without planning to do so in advance, as a result of a sudden whim or urge
Low Balance Alert
A notification that lets you know if the balance in your checking account goes below a set amount
Maintenance Fee
A monthly fee that some banks charge to provide access to checking or savings accounts
Minimum Balance
A certain amount of money that must be kept in an account as required by that particular financial institution
Mobile Deposit
A mobile banking tool that allows you to deposit checks to your bank account using your mobile device
Money Market Savings Account
A type of savings account that may allow debit card and check writing privileges
Money Order
A certificate that allows the stated payee to receive cash on-demand, usually issued by governments and banking institutions
National Credit Union Administration (NCUA)
The U.S. administration insuring deposits in U.S.credit unions against credit union failure up to $250,000 per individual depositor
Online Bill Pay
A consumer banking technology that allows you to schedule and make payments over the internet
Online Savings Account
A type of savings account, typically offering higher interest rates, that is managed entirely online with no physical bank branch
Overdraft Fee
A fee charged to your account when it lacks the funds to cover a withdrawal, but the bank allows the transaction to go through anyway
Overdraft Coverage
A loan banks offer to their customers when they try to withdraw more funds than they have in their account, usually for a fee and with interest
Pay Yourself First
A method of saving whereby you put a fixed amount of income into a savings account before you pay monthly bills or make purchases
Person-to-Person Payment
A digital payment method that allows you to transfer funds from your bank account to that of another person
Prepaid Debit Card
A card that is loaded with a specific cash amount before you use it. It is not linked to a bank or credit union account.
Principal
Original amount of money saved or invested, separate from interest or earnings
Purchasing Power
The number of goods and services that money can buy. It can weaken in time due to inflation.
Roth IRA
An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year
