1. Miss Smith 7 th Grade Civics *pgs. 511-516

2.  Collateral- property used to guarantee repayment of a loan

3.  Money in a checking account is called a demand deposit  The bank must give you your money when you request/demand it  Automated teller machines (ATMs) allow you to withdraw money at any time of day

4.  Money deposited in a savings account earns interest  Certificates of deposits (CDs)- longer term savings accounts  Money market accounts- need to maintain a minimum balance  Earns a higher interest rate  Negotiable order withdrawal (NOW)- you can write checks and receive interest on the money in the account

5. Commercial Banks  Offers a full range of services  Checking, savings, and NOW accounts, loans  Insured by the Federal Deposit Insurance Corporation (FDIC)  Will refund depositors if banks are unable to give them their money

6. Savings and Loans Associations (S&Ls)  Banks begun in the mid-1800s to help people purchase homes  Now offers similar services as commercial banks

7. Credit Unions  Banks established, owned, and operated by people who work for a single company or belong to a single organization  Deposits are also shares in the credit union  Insured by the National Credit Union Association (NCUA)

8.  System established by Congress in 1913 to handle the banking needs of the federal government and provide services to its member banks while regulating the U.S. banking system

9.  12 districts in the U.S. with a Federal Reserve bank in each one  Act as bankers for the federal gov. and other banks  Two main purposes  1) Handle the sale of gov. issued bonds  2) Control the banking system  Discount rate- rate of interest charged to member banks by the Federal Reserve  Influences money available for loan at other banks

10.  7 members  Appointed by the president  Serves one 14yr term  Controls the circulation of currency

11.  Discounting- deducting the interest on a loan in advance