Banking

Interest

• The incentive to part with money, either earned in a bank account or paid for a loan.

• Interest earned solely on the principal deposited.

• Interest earned on the principal deposited and the interest previously earned.

• How long it takes for your money to double at a given interest rate.

Interest

• The incentive to part with money, either earned in a bank account or paid for a loan.

• Interest earned solely on the principal deposited.

• Interest earned on the principal deposited and the interest previously earned.

• How long it takes for your money to double at a given interest rate.

Simple interest

• The incentive to part with money, either earned in a bank account or paid for a loan.

• Interest earned solely on the principal deposited.

• Interest earned on the principal deposited and the interest previously earned.

• How long it takes for your money to double at a given interest rate.

Compound interest

• The incentive to part with money, either earned in a bank account or paid for a loan.

• Interest earned solely on the principal deposited.

• Interest earned on the principal deposited and the interest previously earned.

• How long it takes for your money to double at a given interest rate.

Rule of 72

• The incentive to part with money, either earned in a bank account or paid for a loan.

• Interest earned solely on the principal deposited.

• Interest earned on the principal deposited and the interest previously earned.

• How long it takes for your money to double at a given interest rate.

A basic savings account. May require a minimum balance. Pays the lowest interest of the three types of savings accounts.

• (Passbook) savings

• Money Market Account

• Certificate of deposit (CD)

Pays higher interest than a basic savings account. Usually requires a higher minimum balance. Has higher interest rates. Usually a limit on the # of withdrawals.

• (Passbook) savings

• Money Market Account

• Certificate of deposit (CD)

Money put in the bank for a specific time (term). Interest is fixed (usually higher than other accounts). Longer the term, the higher the interest rate.

• (Passbook) savings

• Money Market Account

• Certificate of deposit (CD)

A bank account where money is kekpt to be used to cover expenses

• Checking

• Insufficient funds

• Overdraft protection

Not enough money in the bank to cover a check.

• Checking

• Insufficient funds

• Overdraft protection