Chapter 5 Personal Finance Test

Annuity

a fixed amount set aside on a regular basis over time 

Bank Reconciliation

the process of adjusting the check register and bank statement balances so that they agree 

Bounced Check

A check that is not honored by a bank and is returned to the payees bank due to insufficient funds 

Cashiers Check

A check issued against the banks funds

Certificate of Deposit (CD)

a time deposit that pays a fixed rate of interest for a specified length of time 

Check

A written order to a bank to pay a stated amount to a person

Check register

A tool used to track checking account transactions

Checking Account

A demand deposit at a bank on which checks are drawn

Compound Interest

interest earned on both the principle and previously earned interest 

Debit card

A bank card used to withdraw or deduct money from your checking account

Deposit

Money added to a checking or savings account

Endorsement

a signature, with or without instructions, written on the back of a check. If not done accurately, can be returned

Floating a check

Writing a check and planning to make a deposit later to cover it before the check is processed

Internet banking

accessing and managing your account online

Money Market Account

A type of saving account that earns the market rate of interest on the money deposited

Postdated Check

A check written with a date that will occur in the future

Principle

A sum of money set aside on which interest is paid

Rule of 72

a quick formula for computing how long it will take to double money invested at a given interest rate 

Savings account

a demand deposit account designed for the accumulation of money in a safe place for future use 

Simple interest

interest computed on principle once in a certain period of time 

Smart card

a card that contains a computer chip that stores electronic money

Stop payment

 an instruction to the bank not to honor a check that has been issued or lost 

US Savings account

 a bond issued by the federal government

Withdrawal

Taking money from your account