Types of Bank Accounts and Functions

Front

What is a deposit?

Back

A sum of money securely stored at a bank.

Front

What does liquidity mean?

Back

The ease and speed by which an asset can be converted into cash, without materially affecting its market price.

Front

What is the 'interest rate spread' also known as?

Back

Net Interest Margin.

Front

What is a loan?

Back

A sum of money borrowed with the expectation to be paid back with interest over a specified period of time.

Front

What is a financial institution that receives and stores deposits called?

Back

Bank.

Front

What is a retail bank?

Back

A bank that provides financial services to individual consumers.

Front

What is a check?

Back

A written order directing a bank to pay a specific amount from a person's account.

Front

What is a credit card?

Back

A card that allows the holder to borrow funds to pay for goods and services with the agreement to pay back the borrowed amount plus interest.

Front

What is a bank run?

Back

A situation where a large number of customers withdraw their deposits simultaneously due to fears that the bank will become insolvent.

Front

What is an interest rate?

Back

The percentage of a loan charged as interest to the borrower, typically expressed as an annual percentage.