Personal FinanceKey Terms

Capital Formation

Movement of money from households to businesses and government through investments and loans.

Deductible

Amount you pay before the insurance company will help pay.

Default

Not repaying borrowed money.

Demand Deposit Account (DDA)

Account whose funds can be removed by writing a check or using a debit card, and without having to gain prior approval from the depository institution.

Dividend

Check paid to stockholders, usually quarterly, representing a portion of corporate profits.

Federal Depository Insurance Company (FDIC)

The U.S. government institution that provides deposit insurance on the depositor’s account.

Federal Reserve System (Fed)

Privately owned, publicly controlled, central bank of the United States.

Financial Institution

Group that channels savings to investors; includes banks, insurance companies, savings and loan associations, & credit unions.

Individual Retirement Accounts (IRAs)

Retirement account in the form of a long-term time deposit, with annual contributions not taxed until withdrawn during retirement.

Interest

Payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans.

Maturity

Life of a bond or length of time funds are borrowed.

Portfolio Diversification

Strategy of holding different investments to protect against risk.

Savings

The dollars that become available for investors to use when others save.

Stocks

Certificates of ownership in a corporation; common or preferred stock.

Frayer Model

AssignmentCreate a frayer model over 1 of the key terms from today. Make sure your name is on the back before you turn it in!

Quiz Terms

DeductibleDefaultDividendFederal Depository Insurance CompanyFederal Reserve SystemIndividual Retirement AccountInterestMaturitySavingsStocks