unit 2

50-20-30 Rule

A popular savings rule of thumb in which 50% of your income goes towards necessities,

20% goes towards saving and debt repayment, and 30% goes towards flexible spending

ATM

Automatic Teller Machine. Allows a person to manage a bank account holder's funds

through actions such as withdrawing or depositing money, viewing account balances,

etc.

Balance

The amount of money you have in your bank account

Bank Statement

A monthly document prepared by your financial institution which shows all of the

transactions related to your account

Canceled Check

A check that has been paid or cleared by the bank. It will appear on your bank

statement

Check Cashing Store

A business that cashes checks and gives the customer cash in exchange for a fee for

the service

Credit

A sum of money deposited INTO an account

Debit

A sum of money deducted FROM your account

Debit Card

A card that is directly connected to your checking account; it enables you to conduct

ATM transactions and to make purchases instead of using cash or writing a check

Deposit

Money you put into your account

Direct Deposit

An automatic electronic deposit of net pay to an employee's designated bank account

Emergency Fund

Money set aside for unanticipated expenses or loss of income

Endorse

To sign the back of a check made out to you so it can be cashed or deposited

FDIC Insurance

Protection provided by the Federal Deposit Insurance Corporation; protects the

deposits of customers against loss up to $250,000 per account

Interest

A fee paid to you for keeping your money in an account OR a fee charged to you for a

loan or credit card

Low Balance Alert

A notification that lets you know if the balance in your checking account goes below a

set amount

Maintenance Fee

A monthly fee that some banks charge to provide access to checking or savings

accounts

Minimum Balance

A certain amount of money that must be kept in an account as required by that

particular financial institution

Mobile Deposit

A mobile banking tool that allows you to deposit checks to your bank account using

your mobile device

Online Bill Pay

A consumer banking technology that allows you to schedule and make payments over

the internet

Outstanding Check

A check that has been written but has not yet been cashed or deposited by the payee

Overdraft Fee

A fee charged to your account when it lacks the funds to cover a withdrawal, but the

bank allows the transaction to go through anyway

Overdraft Protection

A loan banks offer to their customers when they try to withdraw more funds than they

have in their account, usually for a fee and with interest

Person-to-Person Payment

A digital payment method that allows you to transfer funds from your bank account to

that of another person

Prepaid Card

A card that is loaded with a specific cash amount before you use it

Unbanked

A term used to describe a person who does not use or does not have access to

traditional financial services

Underbanked

A term used to describe a person who has a bank account, but often relies on

alternative financial services such as check cashing

Voided check

A check with "VOID" written across it so that it can no longer be used