Personal Finance Midterm

Concealed check

a check that has gone through all the stages of check processing

Discount

when a bonds market price is lower than its face value

Overdrawing/overdraft

what happens when one takes out more money than is available in an account

Gross Income

this is your pay earned before any deductions for taxes, retirement, ect

Salary

this is the method of payment that is pre-set regardless of the hours worked. typically, the employees receiving this type of pay are professionals

Commission

this is the method payment that is calculated based on a percentage of sales

Outstanding Check

A check that was written after the bank statement was issued

Certificate of Deposit (CD)

A savings account that is locked in for a specific period of time with a fixed rate. Early withdrawals from this type of account would result in stiff penalities

Deposit

The money that one puts into his/her bank account. It will increase the balance

Bond

A written promise to pay a debt by a specific date. it is issued by corporations, municipalities, and governments to raise capital without giving up any ownership

FDIC

in 1933 to protect the economy, this agency of the US government was essential to restore peoples faith in the banking system

With holding allowance

This represents the number of people in a household that are being claimed on the Federal Income Tax forms

Face Value

The amount printed on a bond. It is the value that will be paid upon maturity

Commercial Bank

A for-profit financial institution that provides individual consumers and businesses with services such as checking, savings, and loans. These insitutions are highly regulated

Market Price

The amount that someone will pay for the bond in the open market

Check register

Record keeping tool where one should record checks written, ATM transactions, deposit made, ect

Personal exemptions

An amount of money that is considered "tax free" when calculating state income tax. It varies depending on material status and number of dependents

Bank reconciliation

A process of comparing bank statements to check registers to see if there are discrepancies and how they occured, of applicable

Bank Statement

The monthly report that reflects all changes to an account that the bank has cleared

Taxable Income

The amount of one's pay that is subject to federal, State, and local taxes

Net Pay

This is your pay after deductions for taxes, retirements, ect have been taken out

Credit Union

non-profit financial institution that is owned by its depositors all of which share a common bond

Premium

When a bonds market price is higher than its face value

Overtime

Payment made for hours worked above and beyond an employee’s normally scheduled work day or work week

Savings Bank

A not-for-profit financial institution that is owned by its depositors that pays dividend instead of interest. There are fewer than 500 of these still operating today. Many commercial banks started as this type of bank

Savings and Loan Association

A not-for-profit financial institution that is owned by its depositors became popular during the great depression These businesses specialized in providing home loans (mortgages) for people who were not able to get loans from (or did not trust) commercial banks. This is what we saw in the movie

Maturity Date

The date on which a bond ( or other "investment" such as a CD) will be paid

Money Market Account

A hybrid account that is primarily a savings account by allows limited check-writing. The interest on this type of account is usually a little better than a traditional savings account

APY

The real rate of return (%) earned on an investment in one year,taking into account the effect of compound intrest

APR

The annual interest rate that is quote to borrow (and sometimes investors) that does NOT account for compound intrest

Account Balance

the amount of money available in one’s account