Flashcards in Chapter 5: Banking Services and Managing You Money Deck (29)
A series of decisions made over a short-term period regarding income and expenses.
liquidity refers to your access to ready cash, including savings and credit, to cover short-term and unexpected expenses.
Financial institutions that accept deposits from and provide loans to individuals and businesses.
(charted banks, trust and loan companies, and credit unions and caisses populaires
Financial institutions that do not offer federally insured deposit accounts but provide various other financial services.
(lease companies, mortgage companies, investment dealers, insurance companies, mutual fund companies, payday loan companies, cheque cashing outlets, and pawnshops))
are financial institutions that accept deposits in chequing and savings accounts and use the funds to provide business and personal loans. The chequing accounts may or may not pay interest. These banks are federally incorporated.
(Schedule I, Schedule II, schedule III???)
Financial institutions that offer a diverse set of financial services to individuals or firms.
trust and loan companies
Financial institutions that, in addition to providing services similar to a bank, can provide financial planning services, such as administering estates and acting as trustee in the administration of trust accounts.
credit unions/caisses populaires
Provincially incorporated co-operative financial institutions that are owned and controlled by their members.
finance and lease companies
Non-depository institutions that specialize in providing personal loans or leases to individuals
Non-depository institutions that specialize in providing mortgage loans to individuals.
Non-depository institutions that facilitate the purchase or sale of various investments by firms or individuals by providing investment banking and brokerage services.
Non-depository institutions that sell insurance to protect individuals or firms from risks that can incur financial loss.
mutual fund companies
Non-depository institutions that sell units to individuals and use the proceeds to invest in securities to create mutual funds.
A card that not only is used as identification at your bank, but also allows you to make purchases that are charged against an existing chequing account.
A booklet in your chequebook where you record the details of each transaction you make, including deposits, cheque writing, withdrawals, and bill payments.
An arrangement that protects customers who write cheques for amounts that exceed their chequing account balances; it is a short-term loan from the depository institution where the chequing account is maintained.
A financial institution’s notice that it will not honour a cheque if someone tries to cash it; usually occurs in response to a request by the writer of the cheque.
A service offered by financial institutions that allows a customer to check the balance of bank, credit card, and investment accounts, transfer funds, pay bills electronically, and perform a number of administrative tasks.
safety deposit box
A box at a financial institution in which a customer can store documents, jewellery, and other valuables. It is secure because it is stored in the bank’s vault.
automated banking machine (ABM)
A machine that individuals can use to deposit and withdraw funds at any time of day.
A cheque that can be cashed immediately by the payee without the payee having to wait for the bank to process and clear it.
money orders and drafts
Products that direct your bank to pay a specified amount to the person named on them
A cheque written on behalf of an individual that will be charged against a large, well-known financial institution or credit card sponsor’s account.
Selecting a Financial Institution
- deposit rates and insurance
Term deposits are offered as short-term or long-term investments. These investments offer slightly lower returns than GICs because they are cashable. They are designed for individuals who do not know when they will need access to their funds, but who would like an interest rate higher than that offered by savings account
guaranteed investment certificate (GIC)
An instrument issued by a depository institution that specifies a minimum investment, an interest rate, and a maturity date.
- can be one month, three months, six months, one year, and five years
- cannot be withdrawn until the maturity date, or it will be subject to a penalty for early withdrawal.
Canada Savings Bonds (CSBs)
Short-term to medium-term, high-quality debt securities issued by the Government of Canada.
money market funds (MMFs)
Accounts that pool money from individuals and invest in securities that have short-term maturities, such as one year or less.