Unit 4 (Personal Finance)

gov. means government

Bank

a financial corporation who provide a safe mean to store earnings and various services

Examples of banking services

• cash checks

• issue cards

• change foreign currency

• provide deposit boxes

• electronic banking (ATM, debit, direct deposit)

• financial intermediary (brings buyers/sellers together)

• loans

Commercial loan

a loan taken out by a buisness

Consumer loan

a loan taken out by an individual usually paid back in equal monthly statements

Mortgage loans

a loan taken out to buy a house, office, land, or real estate

Interest

money paid back periodically in return for the use of borrowed money

Fixed interest

the interest rate does NOT change (this is typical for loans)

Variable interest

the interest rate DOES change (this is typical for credit cards)

Simple interest

interest paid on only the principle/initial amount

Compound interest

interest paid on both the principle/initial amount and the accumulated interest

Credit union

same services as a bank, but is a nonprofit; owned/controlled by members, better rates, no fees

Pay day lenders

company gives out small loan in return for a portion of an upcoming check; usually really high percentages

Title pawn lenders

grants loans where borrowers can use their vehicle title as collateral/security for repayment

Checking account

a deposit account that allows you to store money and access it immediately for everyday spending and transactions

Savings account

is a deposit account that safely stores your cash while paying you interest

Financial institution

A bank or credit union that provides financial services

Account statement

A record of account activity, including money deposited and money spent

Account alert

A notification that informs a customer about account activity or possible suspicious transactions