Banking Basics Test Study Guide Rated A+

Savings account {Ans: Generally has the lowest amount of interest earned}Numbers located on the bottom of a check {Ans: account and routing number}Certificates of Deposit (CDs) {Ans: Typically the least liquid account of all the bank accounts.}Rule of 72 {Ans: A formula for computing how long it will take to double money invested at a given interest rate.}reconciling the bank statement {Ans: The process of determining any differences between a bank statement balance and a checkbook balance.}Regional Reserve Banks {Ans: 12 in the United States}FDIC (Federal Deposit Insurance Corporation) {Ans: insures customer deposits, up to $250,000, in U.S. banks in the event of bank failure}Checking account {Ans: Bank account that provides the greatest amount of liquidity}Compound interest {Ans: Interest paid on interest previously earned (earns more than simple interest)}principal x interest rate x time {Ans: simple interest}deposit {Ans: to put money into an account}Credit Unions {Ans: Are not backed by the FDIC (only by NCUA)}Region 10 {Ans: The federal reserve region that Nebraska is in.}Federal Reserve System {Ans: The central bank of the United States}Electronic banking {Ans: ATMs, debit cards, and direct deposit}Liquidity {Ans: