Banking Basics
The current amount of money in one's bank account.
What is a balance?
This card can be used to spend money from a checking account.
What is a debit card?
A document that lists all bank account activity for the reporting period.
What is a bank statement?
The beginning amount of one's deposit.
What is principal?
A fee that lenders charge borrowers for using borrowed money.
What is interest?
A computerized machine that allows one to do banking functions, like deposits or cash withdrawals.
What is an automated teller machine (ATM)?
A check that is processed and the money is transferred out of one's account.
What is a cleared check?
A list of transactions and a running total of the balance after each transaction.
What is a register?
APR stands for this.
Interest that is applied only to the original principal.
What is simple interest?
A paper form that is used to document the funds that are deposited into a bank account.
What is a deposit slip?
The transfer of money from one person or entity to another without any cash or checks involved.
What is an electronic funds transfer (EFT)?
An equation that is used to adjust the statement balance.
What is: adjusted balance = statement balance + outstanding deposits - outstanding payments?
A type of savings account that doesn't require the account holder to stay committed to the account for a set period of time.
What is a money market account?
Interest that is earned on the principal and on the interest from all previous compounding periods.
What is compound interest?
Banks use this kind of money to loan money to other account holders.
What is depositors' money?
An optional bank service for covering bank accounts that are overdrawn within certain limits.
What is overdraft protection?
These kinds of transactions are used to adjust the balance of a transaction register.
What are bank-only transactions?
Money is deposited in a risk-free, certificate of deposit account for a set period of time at a fixed interest rate. No money will be added to and withdrawn from this account for the time span of the investment. At the end of the time period, the bank will pay this.
What is principal plus interest? Or what is the future value of money? Or what is the ending or closing balance?
The future value of money, given risk-free conditions, is a function of this quantity at a constant interest rate.
What is time? Or what is future time?
FDIC stands for this.
What is Federal Deposit Insurance Corporation?
A device that is inserted inside a card reader for the purpose of harvesting or using information from the EMV chip of an inserted card.
What is a shimmer?
These two different cash balances must equal each other to reconcile a bank statement.
What are ending (or adjusted) register balances and ending (or adjusted) statement balances?
A type of savings account that allows the account holder to withdraw from or deposit to the account at almost any time despite certain withdrawals limits.
What is a money market account?
This equation is used to determine the total compound interest in terms of principal, interest rate, time, and compounding frequency.
What is: F = P (1 + r/n)nt - P or F = P [(1 + r/n)nt - 1]?