Chapter 4 Vocab Flashcards
(23 cards)
trust
a legal agreement that provides for the management and control of assets by one party for the benefit of another
chartered bank
a financial institution that offers a full range of financial institution that offers a full range of financial services to individuals, businesses, and government agencies
- own different corporations, lend funds to businesses and consumers at interest rates that are higher than those the banks pay on deposits
credit union/ caisse populaire
user owned, non profit co-operative financial institution that is organized for the benefit of its members
money market fund
a savings investment plan offered by investment companies, with earnings based on investments in various short term financial instruments
features of online banking
electric bill pre authorized debits/ transfers stop payments cheque services email money transfer downloadable statements synchronization with quicken or money
term deposit
deposit made for a specificied term in exchange for a higher rate of return. Can be redeemed before maturity by earning a reduced rate of interest
guaranteed investment certificates
term deposits made for a longer period, usually one to five years
rate of return
the percentage of increase in the value of savings as a result of interest earned, aka yield
higher rate of return obtained at cost of lower liquidity
overdraft protection
an automatic loan made to chequing account customers to cover the amount of cheques written in excess of the available balance in the account
financial service: savings
time deposits in savings
financial service: payment services
automatic payments
checking accounts commonly called demand deposits
financial service: borrowing
for the short or long term
financial service: other financial services
insurance, investment, real estate, purchases, tax assistance, and financial planning are additional services you may use
schedule 1 banks
full domestic service: smaller ones like TD, RBC
schedule 2 banks
subsidiaries of foreign banks in Canada, focus on commercial corporate loans
schedule 3 banks
branches of foreign institutions, authorized under Bank Act, to do banking business in Canada
Trust Companies
offer broad range of services such as acting as Trustees - owned by banks
non deposit type institutions
insurance companies, investment companies, mortgage and loan companies, pawnshops, cheque cashing outlets, banking via phone
concerns to online banking
potential privacy violation, ATMS can be costly, difficulty depositing cheques and cash
pros and cons of regular savings account
benefits - low minimum balance, easy withdrawal
cons - no returns
pros and cons GICs
pros - guaranteed rate of return for GIC
cons - possible penalty of early withdrawal , minimum deposit
pros and cons of interest earning Checking accounts
interest earned
cons - service charge for going below minimum balance
Canada savings bond pros and cons
pros - return with interest rates that compoound
cons - no interest if redeemed before three months
