| A | B |
|---|
| bank charter | authorises the operation of a bank following the regulations established by the state or federal givernment |
| bank | a financial institution that accepts demand deposits, makes consumer and commercial loans, and buy and sell currency and government securities |
| demand deposit | money put into a financial institution that the depositors can withdraw at any time without a penalty |
| time deposits | also certificates of deposit, are made for a specified period of time and cannot be withdrawn early without some financial penalty |
| commercial loan | a loan made to a business |
| consumer loan | a loan made to an individual for personal use |
| nonbank financial institution | an institution whose primary purpose is to offer financial products and services other than deposits and loans |
| deposit institutions | banks, known as this because customers deposit excess funds for the purpose of earning interest on deposits |
| commercial banks | the largest and most important type of deposit institution |
| saving institutions | developed as local locations to promote thrift and savings, encourage community members to deposit earnings and other funds and in return offered loans to borrowers needing funds |
| mutual savings bank | owned by customers, instead of buying shares as in a corporation, ownership is based on establishing a relationship with the bank as a depositor or borrower |
| savings and loan associations | often started by pooling the small savings of a large number of people and in turn lending that money back to their members for the purpose of building housing |
| credit unions | not-for-profit financial organisations owned and managed by their members, they don't make a profit, they provide benefits to members, such as higher interest rates on deposits, and low rates on loans |
| Federal Reserve System (Fed) | the central bank of the United States |
| Federal Deposit Insurance Corporation (FDIC) | a federal agency that insures deposits in banks and savings institutions up to approximately $100,000 per depositor account |
| finance companies | a company that specialises in providing installment loans and leases to consumers and businesses |
| insurance companies | collect premiums on a variety of insurance products and invest the premiums in securities, real estate, and other low- to moderate-risk investments to earn money |
| pension funds | a fund from which pensions are paid, accumulated from contributions from employers, employees, or both |
| mutual fund | a company that pools the resources of a large number of investors and uses that money to make a variety of investments |
| securities and investment firms | provide a variety of expert financial services for clients |
| financial service companies | large companies that have been a part of the financial services industry have seen the value of offering customers a full range of financial products and services |
| check | a written order requiring the financial institutions to pay previously deposited money to a third party on demand |
| endorsement | the payee's signature on the back of the check |
| line of credit | gives the business a maximum amount it can borrow over a specified time period |
| collateral | property a borrower pledges to assure repayment of a loan |
| secured loan | or a collateral loan, is a loan backed by something of value owned by the borrower |
| prime rate | the rate at which large banks lend large sums to the best-qualified borrowers |
| fixed interest rate | interest rate that does not change throughout the life of the loan |
| variable interest rates | can increase or decline based on the factors used to adjust the rates |
| electronic funds transfer (EFT) | transferring money by computer rather than by check |
| direct deposit | the electronic transfer of a paycheck directly from the employer's bank account into the employee's bank account |
| automatic teller machine (ATM) | a computer terminal that enables bank customers to deposit, withdraw, or transfer funds by using a bank-provided plastic card |
| investment | the use of money to make more money |
| checking account | a demand deposit through which investors can safely maintain money in a financial institution yet access it at any time through writing a check or making an electronic withdrawal |
| savings account | also a time deposit account that allows customers to make deposits, earn interest, and make withdrawals at any time without financial penalties |
| savings bonds | non-negotiable securities sold by the U.S. Treasury in small denominations to individual investors |
| certificate of deposit (CD) | a time deposit account that requires a specified minimum deposit for a fixed period at a fixed interest rate |
| money market account | a type of savings account in which the deposits are invested by the financial institution in short-term, government-backed securities |
| mutual fund | pools the money of many investors primarily for the purchase of stocks and bonds |
| treasury instruments | securities issued by the U.S. government |
| treasury bill | a short-term security that pays the lowest interest rates of the various Treasury instruments |
| liquidity | the ease of turning an investment into cash without significant loss |
| stock index | a kind of average of the prices of selected stocks considered to be representative of a certain class of stocks or of the economy in general |
