Unit 2: Banking Vocabulary

Vocabulary flashcards covering the key terms from Unit 2 Banking lecture notes.

Financial Institution

An organization such as a bank or credit union that offers a safe place to deposit money and provides financial services like loans and advice.

Savings Account

A bank account that earns interest and is intended for storing money over time.

Checking Account

A bank account used for daily transactions such as paying bills, writing checks, or using a debit card.

Deposit

To add money to a bank account.

Withdrawal

To take money out of a bank account.

Commercial Bank

A for-profit bank open to anyone, e.g., Chase or Fifth Third, offering a wide range of services.

Credit Union

A member-owned financial institution, often tied to an employer, that offers banking services to its members.

Federal Reserve System

The central banking system that regulates all U.S. banks.

Federal Deposit Insurance Corporation (FDIC)

Government agency that insures bank deposits up to a set limit.

Deposit Insurance Limit

The standard FDIC coverage of $250,000 per depositor per bank.

Direct Deposit

An electronic payment in which wages are transferred straight into an employee’s bank account.

Debit Card

A payment card linked to a checking account; purchases are deducted immediately.

Personal Identification Number (PIN)

A 4-digit code used with a debit card or ATM to verify identity.

Identification (ID)

Official documents (driver’s license, passport, etc.) required to open a bank account.

Check

A written order instructing a bank to pay a specific amount from the writer’s account to a payee.

Checkbook Register

A booklet for recording all deposits and debits of a checking account.

Balance

The current amount of money in an account.

Minimum Balance

The lowest amount an account can hold before a service charge is assessed.

Electronic Funds Transfer (EFT)

The electronic movement of money from one account to another.

Bank Fee

Money a bank charges for specific services, such as ATM use or overdrafts.

Outstanding Check

A written check that has not yet been cleared or paid by the bank.

Non-Sufficient Funds (NSF)

A situation in which an account lacks enough money to cover a written check.

Overdraft

When withdrawals exceed the available balance, resulting in a negative balance and possible fees.

Joint Account

A bank account owned by two people who both have full access.

Bank Statement

A monthly listing of all checks paid, deposits, and service charges on an account.

Endorsement

The act of signing the back of a check to authorize its negotiation.

Blank Endorsement

Simply signing your name on the back of a check; the least secure form of endorsement.

Restrictive Endorsement

Writing 'For Deposit Only' plus your signature to limit the check to deposit into your account.

Full/Special Endorsement

Signing a check over to another person by writing 'Pay to the order of _' and then signing.

Deposit Slip

A form completed when bringing cash or checks to deposit into an account.

Reconciliation

Comparing a bank statement with a check register to ensure both records agree.

Peer-to-Peer Payment

Digital transfer of money between individuals through apps like Venmo or Zelle.

Digital Wallet

An electronic device or app that stores payment information and can be used for transactions.