Banking Basics

A set of vocabulary flashcards covering key concepts in banking and financial management.

Bank

A business that accepts deposits and makes loans with interest, operating to make a profit for the owners or shareholders.

Credit Union

A non-profit financial institution owned by its members, who must belong to a qualifying organization or community.

Savings and Loan Companies

Financial institutions that provide financing for home purchases, mainly offering home mortgages and loans.

Fiat Money

Currency without intrinsic value, where the value comes from what may be exchanged for it.

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Simple Interest

Interest calculated only on the principal amount, or on that portion of the principal amount which remains unpaid.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Financial Institutions

Businesses that help individuals and organizations save, invest, and manage money.

Deposit Insurance

A safeguard that protects bank and credit union depositors against loss of their deposits.

Consumer Loans

Loans provided to individuals that can be used for personal expenses, such as buying a car or financing education.