Understanding the Federal Reserve System

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What is the Federal Deposit Insurance Corporation (FDIC)?

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A government agency that insures deposits in banks up to $250,000.

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What does Annual Percentage Yield (APY) represent?

Back

The effective interest rate on savings over a one-year period, taking into account compounding.

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What is a Checking Account?

Back

An account at a bank that allows you to make deposits, pay bills, and make withdrawals.

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How do credit unions differ from banks?

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Credit unions are owned by their members, while banks are owned by shareholders.

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What is a Savings Account?

Back

An account that earns interest on the money deposited, typically used for saving.

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What is the purpose of the Federal Reserve System?

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To regulate the U.S. monetary and financial system.

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What is interest?

Back

The cost of borrowing money or the earnings from saving money.

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What is a debit card?

Back

A card that allows you to access funds in your bank account to make purchases.

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What is a credit union?

Back

A member-owned financial cooperative that provides banking services.

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What is a commercial bank?

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A financial institution that offers services such as accepting deposits and making loans.