Where is money made?
At the US Mint
the federal agency that helps to regulate banks and other financial institutions
Federal Deposit Insurance Corporation (FDIC)
What is the purpose of a check / bank reconciliation?
- to make sure you nor the bank made any errors
- to make sure you did not forget to record any transactions
- to make sure your records match the bank's records
- heads the Fed
- is the current Chair of the Board of Governors of the Federal Reserve System
- she is considered one of the most powerful people in the world because she controls inflation/deflation and controls interest rates, which controls the economy
the percentage cost of credit on a yearly basis
annual percentage rate (APR)
What are two ways banks make money?
- from interest received on loans
- from fees charged on accounts
a system set up by the federal govenment to supervise and regulate memeber banks and to help banks serve the public efficiently
Federal Reserve System (Fed)
all national banks are required to join the Federal Reserve System, and state banks may join
the percentage rate equal to the total amount of interest that a $ deposit would earn based on 365 day period
annual percentage yield (APY)
writing a check for more money than is in your account
Overdrawn / NSF / Overdraft
special ink used in checks so they cannot be copied
Magnetic Ink Character Recognition
check taken to the bank that is over 6 months old, bank might refuse to accept it
stale dated check
What is the difference between a credit card and debit card?
a debit card uses money in your account, a credit card you are borrowing from the bank to pay later
a check that is dated later than the date on which it is written
(today is the 29th and you write 31st on date line)
How do you calculate simple interest?
You borrow $150 for one year with 12% interest rate
Interest = Price x Rate x Time
$150 x 12% x 1 = $18
so if you borrowed $150 you would pay $18 in interest, if you lent $150 then you would have earned $18
written evidence that you received payment or that you transferred your right of receiving payment to someone else
What are the 3 types of endorsements?
- Blank Endorsement - consists of only the endorser's name
- Full / Special Endorsement = endorser transfers check to someone else 'Pay to the order of...'
- Restrictive Endorsement - limits the use of the check to the purpose given in the endorsement 'For deposit only'
the rate banks make available to their best business customers, such as large corporations
What are the compnents of a check?
- Drawer - the owner of the account who signs the check
- Payee - the person to whom the check is written to
- Drawee - the bank or other financial institution that pays the check
- Routing/ABA # - number that identifies the bank
- Account Number - number that identifies owner's account
- Dollar amount
regulates credit unions
The National Credit Union Administration (NCUA)
What are some banking services and products?