Savings and Checking Accounts

These flashcards cover key concepts and terms related to savings and checking accounts based on your lecture notes.

What are the benefits of an IRA, 401(k), and 403(b)?

They are retirement savings plans that offer tax advantages.

What is the Rule of 72?

A formula to estimate how long it will take to double an investment by dividing 72 by the interest rate.

What characterizes a Regular Savings Account?

A basic account offering low interest but high liquidity.

What is a CD (Certificate of Deposit)?

A fixed-term savings account that pays higher interest but restricts access to funds until maturity.

What is a Money Market Account?

A type of savings account offering higher interest rates with limited check-writing features.

What is the main function of a Credit Union?

A nonprofit financial institution owned by its members, providing better rates and fewer fees.

What does the term 'Liquid' refer to in finance?

The ease with which assets can be converted into cash without penalty or loss.

What does FDIC stand for?

Federal Deposit Insurance Corporation, which insures bank deposits up to $250,000 per account.

What is an Automated Teller Machine (ATM)?

A machine for cash withdrawals, deposits, and other banking tasks using a debit or ATM card.

What is a Special Endorsement?

Signing a check over to another individual, transferring the right to deposit or cash it.

What defines a Checking Account?

A bank account that allows the holder to deposit and withdraw money and write checks.

What is the purpose of a Checkbook Register?

A personal ledger to record all account activity, including checks written and deposits made.

What does it mean to float a check?

Writing a check without sufficient funds, hoping to deposit money before it is processed.

What is Compound Interest?

Interest calculated on both the initial principal and the interest that has already been earned.

What is a Traveler's Check?

A secure check used while traveling, requiring a signature when issued and a second when used.