Untitled Flashcards Set

FDIC

Federal Deposit Insurance Corporation, which insures deposits and supervises financial institutions.

Traditional banks

Banks that offer in-person visits during designated office hours (e.g. Chase, Citibank).

Credit unions

Member-owned financial cooperatives that share profits with their owners.

Online-Only banks

Banks that handle all banking tasks online via a website or app.

Checking account

An account used for everyday spending, keeping a record of account activity.

Savings account

An account used for emergency funds and earning interest.

High-yield savings account

A savings account found in online-only banks or credit unions, with higher interest rates.

APR

Annual Percentage Rate; the interest earned or accrued per year.

APY

Annual Percentage Yield; reflects interest earned per year, including compounding.

Principal

The original amount borrowed (loan) or deposited (savings).

Simple interest

Interest calculated only on the principal amount with a fixed rate.

Compound interest

Interest calculated on the principal plus previously earned interest.

Bank statement

A record of transactions issued by a bank periodically.

Common Bank Fees

Includes monthly maintenance fees, out-of-network ATM fees, and overdraft fees.

Personal checks

Paper payments from a bank account.

Cashier’s checks

Guaranteed checks issued by a bank.

Economic systems

Types of economies, including traditional, command, free-market, and mixed economies.

Supply and Demand

Economic model of price determination in a market.

Normal goods

Goods for which demand increases as income increases.

Inferior goods

Goods for which demand decreases as income increases.

Expansionary monetary policy

Policy that lowers interest rates to stimulate borrowing and spending.

Fiscal policy

Government spending and tax policies managed by the President and Congress.

Consumer Price Index (CPI)

Measures price changes over time and is used to gauge inflation.

Recession

A period of persistent economic decline.

Gross Domestic Product (GDP)

The market value of all goods and services produced in a country.

Real Rate of Interest

(Interest Rate - Inflation Rate)