Unit 12: Banking

deposit

to place money in a bank

Liquidity

available cash, and how easily other assets can be turned into cash

collateral

anything that acts as a security or guarantee for a loan

a mortage

a type of loan used to purchase or maintain a home, land, or other types of real estate. The borrower agrees to pay the lender over time, typically in a series of regular payments that are divided into principal and interest. The property then serves as collateral to secure the loan.

overdraft

Something that occurs when you make a purchase with your debit card or write a check for an amount that exceeds your checking account's available balance. Many bank accounts offer overdraft protection to help avoid overdraft fees. Some banks don't charge overdraft fees at all.

A Current acccount

an account at a bank against which checks can be drawn by the account depositor; a checking account

A saving account

a deposit account that generally earns higher interest than an interest-bearing checking account. Savings accounts limit the number of certain types of transfers or withdrawals you can make from the account each monthly statement cycle.

a deposit account

a bank account maintained by a financial institution in which a customer can deposit and withdraw money

Solvency

When banks have enough money to cover potential losses. Banks are expected to maintain a sufficient level of capital to remain solvent and avoid failure. The FDIC and other federal regulators work with banks to maintain standards for solvency.

maturity date

This is the date on which a life insurance policy becomes payable due to the death of the insured or as a result of an insured's living to the end of a specified period (i.e., age 100). In whole life insurance, the cash value is designed to equal the face amount at maturity.