| GLOSSARY |
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Accounts: An account is a record of financial transaction for an asset or individual. |
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Account Reconciliation: It is the process of confirming the balance in one’s checkbook and matching the balance corresponding bank statement. |
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Adjustable Rate: It refers to the interest rate that changes periodically. A movement in prime interest rate indicates the change in interest rate. |
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Annual Percentage Yield (APY): APY refers to the interest rate for any investment or deposit. It is usually paid by financial institution to a depositor lender. |
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Bank Draft: It refers to the check drawn by one bank against fund deposited into the individual’s accounts at another bank and allowing second bank to make payment to person mentioned in the draft. |
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Bank Note: It is made by a bank and a kind of promissory note payable to the bearer on demand. It can also be used as cash. |
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Checking Account: It is a service provided by financial institutions such as banks, saving, loans, credit unions, etc. These institutes allow individuals and businesses to withdraw funds and deposited money in federally-protected account. A checking account holder can use personal checks instead of cash to pay debts. |
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Compound Interest: when ever someone borrows money from bank then one has to pay interest. It is a fee charged for borrowing the money. It is charged on the principal amount for a period of year and paid on the original principal and accumulated interest on that. |
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Certificate of Deposit: It is a saving certificate gives the right to bearer to receive interest. This certificate shows the maturity date, a specified fixed interest rate and also can be issued in any value. Generally these certificates are issued by commercial banks which are insured by FDIC. |
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Federal Deposit Insurance Corporation (FDIC): FDIC is an independent deposit insurance agency created by United States congress in 1933 to uphold the constancy and confidence of public in the financial system. FDIC promotes safety by insuring deposits, examining and controlling financial institutions and managing the receivership of banks. FDIC reduces disruptive effects from the failure of banks and savings associations; and ensures fairness in financial services. |
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Joint Account: when ever two or more people shares and access the same account then it is called joint account. |
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Online Savings Accounts: An online savings account is exclusively managed and funded on the internet. These accounts provide high yields comparatively traditional savings accounts. Reduces the paperwork and overhead expenses and maximize the savings. |
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Savings Account: These accounts are maintained by commercial banks, savings and loan associations, credit unions and mutual savings banks which pay interest. But it cannot be used to withdraw money by writing checks. |
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