Personal Finance Chapter 5

liquid assets cash and investments that can be easily converted into cash
mutual fund firm an investment company that raises funds from investors, pools the money, and invest in stock or bonds
credit union depositor-owned financial institution that is a not-for-profit cooperative
savings and loan associations originally established to provide mortgage loans to depositors
deposit-type financial institutions financial institutions that provide traditional checking and savings accounts
t-bills short-term notes of debt issued by the federal government
asset management accounts a comprehensive financial services packaged account offered by brokerage firms
money market deposit account this type of account allows you to deposit your money in a bank, but provides an interest rate that varies with the current market rate of interest, generally fluctuating on a weekly basis
certificate of deposit a savings alternative that pays a died rate of interest while keeping your funds on deposit for a contracted period of time that can range from 30 days to several years
NOW another name for an interest-bearing checking account
time deposit a savings account is also know as this
CD advantages high interest rates, wide selection of maturities, and account insurance
money market deposit accounts advantages these accounts offer a variable rate that is generally higher than commercial banks
NOW accounts these accounts offer an option to traditional demand deposits but you must generally maintain high minimum balances, and there is a monthly fee associated with them, and the interest rate is generally lower
money market mutual funds these have short term, higher returns that are generally regarded as practically risk-free
FDIC Federal Deposit Insurance Corporation
after-tax return the actual return you earn on taxable investments once taxes have been paid
opportunity costs for free checking these costs include low interest rates and high minimum balance requirements
online banking cashiers checks and money orders may be needed since this account almost eliminates the need for checks
cashiers check a person can go to a bank at which they have no account, give the bank cash, and in return obtain a check drawn against that bank which they will use to pay someone else
overdraft protection an automatic loan made to your checking account whenever your account does not contain enough cash to cover the checks that you have written against it
checking fees common fees include a monthly fee, minimum balance requirement, and a charge per check
certified check a customer had her bank certify one of her personal checks as being good. This type of check has been issued
ATM access fee try to use only the ATM’s at your bank so you can avoid these charges since you are effectively paying 15% interest to access your cash

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