CM Chapter 5 Vocab

Electronic Funds Transfer (EFT)

• the transfer of funds from one individual or company to another by computer

• when money is subtracted from your account, and you don’t have sufficient funds

• an order to your financial institution to pay a certain amount of money to the person or business you have designated

• the person who is getting the money from the written check

Overdraft

• the transfer of funds from one individual or company to another by computer

• when money is subtracted from your account, and you don’t have sufficient funds

• an order to your financial institution to pay a certain amount of money to the person or business you have designated

• an account that pays the present market value with regard to interest, you may withdraw or deposit funds at your pleasure

Check

•  an order to your financial institution to pay a certain amount of money to the person or business you have designated

• the person who is giving the money from the written check

• the person who is getting the money from the written check

• a savings account with limited transfer privileges

Payee

•  the person who is giving the money from the written check

• the person who is getting the money from the written check

Payer

• the person who is getting the money from the written check

• the person who is giving the money from the written check

Savings Account

•  an account that pays the present market value with regard to interest, you may withdraw or deposit funds at your pleasure

• A lump sum deposited for a particular interval of time (usually anywhere from 6 months to 5 years)

• a savings account with limited transfer privileges

• An arrangement between an investment company and the government whereby deposits by a taxpayer up to a limited amount of money each year can be sheltered from income tax until the owner retires.

Certificate of Deposit (CD)

• similar to traditional IRA, but deposits are not tax sheltered.  Yet capital gains, interest earned, and money withdrawn during retirement are not taxed

•  An arrangement between an investment company and the government whereby deposits by a taxpayer up to a limited amount of money each year can be sheltered from income tax until the owner retires.

• a retirement savings plan offered through an employer.  Some are pretax or after tax, and most employers will match an employee's contribution up to a certain amount.

• A lump sum deposited for a particular interval of time (usually anywhere from 6 months to 5 years)

Money Market

•  An arrangement between an investment company and the government whereby deposits by a taxpayer up to a limited amount of money each year can be sheltered from income tax until the owner retires.

• a savings account with limited transfer privileges

• similar to traditional IRA, but deposits are not tax sheltered.  Yet capital gains, interest earned, and money withdrawn during retirement are not taxed

• a retirement savings plan offered through an employer.  Some are pretax or after tax, and most employers will match an employee's contribution up to a certain amount

Individual Retirement Account (IRA)

• An arrangement between an investment company and the government whereby deposits by a taxpayer up to a limited amount of money each year can be sheltered from income tax until the owner retires.

•  a retirement savings plan offered through an employer.  Some are pretax or after tax, and most employers will match an employee's contribution up to a certain amount.

• A lump sum deposited for a particular interval of time (usually anywhere from 6 months to 5 years)

• similar to traditional IRA, but deposits are not tax sheltered.  Yet capital gains, interest earned, and money withdrawn during retirement are not taxed

Roth IRA

• a savings account with limited transfer privileges

• a retirement savings plan offered through an employer.  Some are pretax or after tax, and most employers will match an employee's contribution up to a certain amount.

•  similar to traditional IRA, but deposits are not tax sheltered.  Yet capital gains, interest earned, and money withdrawn during retirement are not taxed

• An arrangement between an investment company and the government whereby deposits by a taxpayer up to a limited amount of money each year can be sheltered from income tax until the owner retires.