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
