Banking Basics

This set of flashcards covers key terms and concepts related to banking basics as outlined in the lecture notes.

Banking

An institution that accepts deposits from customers and provides loans to individuals and businesses.

Credit Union

A member-owned financial cooperative that provides banking services and often offers lower fees and better interest rates.

Unbanked

A term describing individuals without a bank account.

Simple Interest

Interest calculated only on the principal amount.

Compound Interest

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

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.

Electronic Banking (E-banking)

The use of electronic means to conduct banking transactions, making deposits and withdrawals, and paying bills online.

Annual Percentage Yield (APY)

The effective interest rate on an investment or deposit, including compounding, expressed as a yearly rate.

Debt vs. Equity Financing

Debt financing involves borrowing money to be paid back with interest, while equity financing involves raising capital by selling shares of stock.

NCUA

National Credit Union Administration, an agency that insures deposits at credit unions.

FDIC

Federal Deposit Insurance Corporation, a corporation that insures deposits at banks.