PERSONAL FINANCE TEST TOMARROW OH GOD I NEED TO LOCK TF IN

what is a a bank?

financial institution

primary function of bank

take deposit and make loans

how do banks operate

by receiving interest on these loans, and pay sone of interest back to consumers bank accounts

what are credit unions

non-profit organizations, owned by members

checking account

used for day to day expenses and spending, no interest

savings account/

holds money for a long time, interest

loans

banks and credit uniions offer loand to consumers who need funds

what is Federal Deposite Insurance Corperation

provides insurance to protect your money if your bank fails

twe types of interest

simple and compund

simple interest

uses the amount deposited into the accound

compound interest

uses the amount deposited in the account + previously earned interest

what is APY

percentage that indicates the amouth of interest a bank account will earn in one year

standard savings account vs high yeild savings vs certificates of deposit

pays small amount of interest vs high amounts o finterest, only online vs pays interest for a specific amoutn of time

comoound interest formula

A = P (1 +r/n) ^ n*t

short term saving goal

1 year or less

medium term saving goal

1-3 years

long term saving goal

3+ years

debit vs credit

allows you to spend money deducted directly from your checking account vs allows you to borrow money to make every day purchaces

different types of checking account fees

maintenance or service fees, out of network atm fees, overdraft fees

what is a transactiionn register?

a place to record all payments and deposits in a checking account