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| Medium of exchange | anything that is widely accepted as payment for goods and services. i.e. gold or salt |
| Unit of account | standardized monetary unit used to price goods and services. I.e. dollar, yen, peso |
| Store of value | Any asset that can be saved, retrieved, and exchanged at a later time without significant loss of purchasing power. i.e. - gold, real estate |
| Six characteristics of money | durability, portability, divisibility, uniformity, limited supply, and acceptability |
| Commodity money | when people agree to use a specific valuable good as a universal medium of exchange. Its value is tied directly to the value of the commodity itself, so the money is still valuable even if it is melted down or converted for other purposes. |
| Representative money | money is currency, like a gold certificate, that has no intrinsic value but can be exchanged for a commodity that does have value, such as gold or silver. |
| Fiat money | currency that a government has declared to be legal tender but is not backed by a physical commodity like gold or silver. |
| US Dept of Treasury | a cabinet-level executive agency responsible for managing the nation's finances, collecting taxes through the Internal Revenue Service (IRS), managing public debt, and producing currency and coinage. |
| Automatic Teller Machine (ATM) | A specialized computer that allows bank customers to manage their money, including withdrawing cash, making deposits, and checking balances. |
| Bank | A financial institution, often for-profit, that handles money for savings and commercial purposes. |
| Blank Endorsement | A check endorsement that anyone can further endorse. |
| Certificate of Deposit (CD) | A savings certificate that gains interest and has a set time before you can withdraw your money without penalty. |
| Check | A written order instructing the bank to pay a certain amount of money to another person or place. |
| Check Register | A register used to record all bank transactions, such as deposits, checks, and ATM withdrawals. |
| Cleared Check | A check that the bank has paid and deducted from your account. |
| Credit Union | A non-profit financial institution that is owned entirely by its members. |
| Debit Card | A plastic card used to deduct money for a purchase from a checking account almost immediately. |
| Deposit | Money put into a bank or financial institution. |
| Deposit Slip | A form used to deposit money into the correct account. |
| Electronic Funds Transfer (EFT) | A transfer of money from one bank account to another. |
| Endorse | To sign a check to give another person the right to cash it. |
| Federal Deposit Insurance Corporation (FDIC) | A federal agency that insures deposits in commercial banks. |
| Federal Reserve | The central bank of the United States that regulates the nation's financial institutions. |
| Money Market Account | A type of savings account that earns a higher interest rate because the financial institution invests the money you deposit. |
| Non-sufficient funds (NSF) | The lack of money in an account to cover a payment. |
| Outstanding Check | A check that has been written but has not yet been received and paid by the bank. |
| Overdraft Protection | A service that covers checks or withdrawals up to a specified amount if you have insufficient funds. |
| Payee | The person or organization to whom a check is written. |
| Personal Identification Number (PIN) | A combination of letters or numbers used to access an account. |
| Reconciling | The process of matching your bank statement with your checkbook register. |
| Statement | A monthly document from your financial institution that lists your account balance and all transactions. |
| Withdrawal | To remove money from a bank account |
| Annual Percentage Rate (APR) | The cost of borrowing money on an annual basis, including the interest rate and other fees. |
| Collateral | An item of value that can be sold if loan payments are not made. |
| Credit | An agreement where a borrower receives money, goods, or services with the promise to repay the lender over time. |
| Credit Limit | The maximum amount of credit a lender will extend to a debtor. |
| Debt | Money that is owed or due. |
| Down Payment | An initial cash payment made when something is bought on credit. |
| Finance Charge | The total dollar amount of all interest and fees you pay for the use of credit. |
| Grace Period | The time after a payment is due during which no late penalty is incurred. |
| Interest | The amount paid to the lender for the use of their money. |
| Late Fee | A charge for not paying a bill by its due date. |
| Loan Term | The amount of time set for a loan to be repaid. |
| Over-the-limit Fee | A fee charged when you exceed your credit limit. |
| Principal | The original amount of money borrowed that must be repaid. |
| Universal Default | A practice where a lender can change the terms of a loan to default terms under certain circumstances. |
