1. Banking Review

2. Bank Business that stores money for individuals and businesses

3. Two reasons to put money into a bank: Interest Safety (insured )

4. Banks vs Credit Unions Banks: Anyone can open an account In business to make a profit Generally more services than credit unions Insured by FDIC for up to $250,000

5. Banks vs Credit Unions Credit Unions: Owned by members Members share a common bond Not for profit Usually not as many services, but lower fees Insured by NCUA up to $250,000

6. Interest Fee paid for using someone else’s money

7. Principal Original amount of money deposited

8. Simple Interest Interest paid on principal amount ONLY

9. Compound Interest Interest paid on principal amount PLUS previously earned interest

10. Saving vs Investing Savings: short term Investing: long term

11. Rule of 72 Tells you how many years it takes money to double

12. Rule of 72 If given interest: 72 / interest rate = years for money to double

13. Rule of 72 If given years: 72 / years= interest rate needed for money to double

14. Minimum Balance Requirement Amount needed to keep in account to avoid a monthly service fee

15. Monthly Service Fee Charge to maintain a checking account

16. Checking Accounts Purpose: Convenience

17. Checks Routing number: 9 digits at bottom of check, printed in magnetic ink

18. Checking Accounts: 3 ways to access money: ATM Checks Debit card Online

19. Overdraft: When your write a check for money than the balance in your account

20. Debit cards: Benefit: Can carry less cash Back of debit card: Signature If lost: report within 2 days and you are only responsible for $50

21. Savings Tools: Savings Account: Lower interest Most liquid (except for checking)

22. Savings Tools: Money Market: Higher minimum balance required Limited withdrawals Tiered interest rates (higher balance = higher interest)

23. Savings Tools: Certificate of Deposit: Purchased for a specific amount of time (term) Penalty for withdrawing before term Least liquid/Highest interest

24. Federal Reserve Bank: Central bank of the United States

25. Endorse To sign the back of a check Blank: signature only Restrictive: For Deposit Only plus signature Special: Pay to the Order of and signature

26. Liquidity Ability to convert into CASH

27. Reconcile Balance the transaction register with the bank statement

28. Transaction Exchange between the bank and customer

29. Payee Person or business to whom the check is written

30. Bank Statement List of all transactions for your account

31. Deposit and Withdrawal Deposit: putting money into your account (adds to balance) Withdrawal: Taking money out of your account (subtracts from balance)

32. 3 Factors that Affect the Growth of Savings Time Interest Rate Amount Deposited