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Personal Finance > Unit 4 > Flashcards

Unit 4 Flashcards

0
Q

A type of financial institution that has LOANS as the primary financial assets is a _________.

A

Bank

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1
Q

What is a financial institution?

A

Any institution (public or private) that collects funds and invests them in financial assets

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2
Q

A type of financial institution that is a FOR PROFIT organization is a ______.

A

Bank

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3
Q

A type of financial institution that is owned by INVESTORS but can be either STATE or FEDERAL is a _________.

A

Bank

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4
Q

A type of financial institution that has members with a COMMON THEME and focuses more on MEMBERS’ SERVICES is a __________.

A

Credit Union

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5
Q

A type of NON-PROFIT financial institution that has a focus on CONSUMER (individual) LOANS is a __________.

A

Credit Union

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6
Q

A type of financial institution that was originally ONLY REAL ESTATE is a __________.

A

Savings & Loans

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7
Q

Only ____% now can be car/commercial loans in Savings & Loans.

A

20%

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8
Q

A type of financial institution that has federal insurance for bank deposit accounts is __________.

A

FDIC

Federal Deposit Insurance Corporation

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9
Q

FDIC insures up to $________ at each bank.

A

$250,000

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10
Q

Financial institutions insure/COVER:

A

Deposit accounts

Checking, certificate of deposit, saving, money market, etc

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11
Q

Financial institutions do NOT insure/COVER:

A

Any type of investment
Any type of money market FUND
Theft
Anything in safety deposit box

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12
Q

A type of financial institution that has federal insurance for credit unions is __________.

A

NCUA

National Credit Union Administration

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13
Q

A PASSBOOK is also known as a __________ and is a:

A

Savings account

Booklet with transactions

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14
Q

What is a DEPOSIT SLIP?

A

Paper filled out to put money INTO account

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15
Q

What is STOP PAYMENT?

A

When you DON’T want to honor a check

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16
Q

What is a BANK STATEMENT?

A

A monthly form with records for the activity in your deposit account

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17
Q

What is a CANCELLED CHECK vs an OUTSTANDING CHECK?

A

Cancelled: A check that HAS BEEN PAID by the bank
Outstanding: a check that has not yet gone through the bank as a transaction

18
Q

What is KITING?

A

The process of TRANSFERRING MONEY to MORE THAN ONE BANK to make it look like you have more money than you really do

19
Q

What is RECONCILIATION?

A

The process of making sure your records MATCH the bank’s

20
Q

What is a SIGNATURE CARD?

A

A paper with a list of people authorized to SIGN CHECKS for your account

21
Q

What is an NSF Check?

A

Insufficient funds to cover check

22
Q

What is OVERDRAFT?

A

Taking more money out of your account than WHAT IS AVAILABLE

23
Q

What is ELECTRONIC BANKING?

A

Online banking service offered (EFT)

24
Q

What is a SAFE DEPOSIT BOX?

A

A box with valuable things locked inside

25
Q

What is an INSTALLMENT LOAN?

A

(Typically monthly) set payment over a certain amount of time
(Ex. 3 yr payment over 36 installments)

26
Q

What is a MORTGAGE LOAN?

A

Loan to buy real estate (typically longer)

Most common ex.s 15 yrs & 30 yrs

27
Q

What is LINE OF CREDIT?

A

A revolving loan

28
Q

What is ANNUAL PERCENTAGE RATE (APR)?

A

The percentage you are laying on the loan

29
Q

What are SECURED LOANS vs UNSECURED LOANS?

A

Secured: lowest interest rate; if a property can be taken until it’s paid off
Unsecured: highest IR; can’t take property as result of loan (ex. credit card)

30
Q

What is COLLATERAL?

A

Whatever thing(s) they can come take from you if a loan doesn’t get paid

31
Q

What are FIXED RATES?

A

Where the interest rate stays the same for the entire life of the loan; prime lending rate & is reserved for best customers

32
Q

What are ADJUSTABLE RATES?

A

(Mortgage)

ARM; will typically adjust with federal loan rates

33
Q

What are BALLOONS?

A

Large payments due at the end of the loan

34
Q

What is an AMORTIZATION SCHEDULE?

A

A schedule that shows your remaining balance by payment

35
Q

What is a CHECK?

A

(Legal tender)

A form that transfers ownership of money

36
Q

What are MONEY ORDERS?

A

Certified payments ( = guarantee)

37
Q

What is a CASHIER’S CHECK?

A

A check written on the BANK’S FUNDS not your funds

38
Q

What are two forms of EFTs?

A

ACH (Automated Clearing House): 3rd party service that handles the actual transaction
Wire Transfer: same as ^^^^ but happens through federal reserve bank itself

39
Q

What is an ENDORSEMENT?

A

A transfer of ownership

40
Q

What are the 3 types of endorsements we learned about?

A 
Blank Endorsement: name only
Special Endorsement: sign rights over
 to specifically someone else
Restrictive Endorsement: restrict what
 can happen with the money
41
Q

What do you do for a BLANK ENDORSEMENT?

A

Just write your signature on the back of the check

42
Q

What do you do for a SPECIAL ENDORSEMENT?

A

Write your signature on the back of the check AFTER writing “Pay to Person’s Name”

43
Q

What do you do for a RESTRICTIVE ENDORSEMENT?

A

Write your signature on the back of the check AFTER writing/specifying destination (ex. “For Deposit Only”)

Personal Finance (2 decks)

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