9261865
Description
Flashcards by izzy schaffer, updated more than 1 year ago
|
Created by izzy schaffer
almost 7 years ago
|
|
| Question | Answer |
| What are some purposes for saving? | -Buy a big item -Emergency funds -To build funds to invest |
| How could you put your money to work? | - save so your money earns income -A saving account -Interest depends on time and risk |
| Ways to Save: | -Work more -Spend less -Reduce "wants" -Pay yourself first -Aim to save the first 10% |
| Where can your savings earn money? | - A savings account - A guaranteed investment certificate (GIC) - A term deposit - A Canada savings Bond (CSB) - Other investments |
| The difference between a Guaranteed investment certificate and a term deposit? | GIC: If you had $2,000, you can't touch it. You have to leave it. Term Deposit: You can take out your money when you want, but you loose your interest. You also are fined. (example: If you had $2,000 you take it out they fine you $250) |
| What is simple interest? | - Interest only paid only on the initial deposit |
| What is compound interest? | -Interest paid on the initial deposit and on any interest that has been earned. Example: 5% the first year, 5.25% next year and so on. |
| Whats the Rule of 72 and how does it work/carry out? | Using compound interest: use this formula to calculate how long it would take to double your money. Ex: 72 divided by interest rate= number of years to double. |
| Banks, Credit Unions and Trust Companies: | -offer saving accounts, chequing accounts, debit cards and other services. -Charge fees for their services |
| People hold their money in banks, trust companies and credit unions to: | -Keep it safe -Make and receive everyday payments -Earn profit (interest on their money) |
| Saving Accounts: | -A secure place to hold money that you don’t need access to very often. -Usually pay interest -Usually offer limited number of transactions per month, including ATM transactions |
| Chequing Accounts: | -For people who need to make or receive frequent payments frequently/ -Allow you to write cheques -Often pay low or no interest -Charge fees, either per transaction or monthly fee |
| Money can be received by: | -Electronic Transfer -Depositing Cash or cheques at an ATM -Depositing cash or cheques at a bank |
| Money Can be withdrawn by: | -ATM/Debit card withdrawal or payment -Cheque -Electronic funds transfer (EFT) -Bank withdrawal |
| Bank Failure: | -institution can’t meet its financial obligations -May be unable to repay depositors |
| Deposit Insurance Covers Eligible Accounts: | -Canada deposit insurance corporation (CDIC) -Credit Union Deposit Insurance Corporation (CUDIC) unlimited. |
| Credit Cards: | -You have to apply for a credit card -Credit card companies charge interest and fees -Cards only approve after a credit check -Based on reasonable income and good credit history -Usually excludes high school students (unless guaranteed by an adult) -Spending limits vary with the cardholder’s income and credit rating |
| Benefits of Credit Cards: | -Let you borrow money instantly to make purchases -Allow you to carry less cash -Are often necessary to make online or telephone purchases -Can let you get emergency cash advances -Can be more convenient, and more widely accepted than cheques -List purchases in one convenient monthly statement |
| Cost of Credit Cards: | -Interest can add to cost of purchase -Interest varies from 10%-30% -To avoid interest, pay on full by due date -Compare interest, fees and features. -Annual percentage Rate (APR) allows you to compare interest rates |
| Other forms of credit: | -Loan from a bank or other financial institution -Mortgage -Line of Credit -Deferred payment plan -Overdraft protection |
| Your Responsibilities when you borrow: | -Borrow only what you can repay -Understand your credit contract before signing -Pay amounts as agreed -Keep Cards, PINS, and passwords secure -Check your credit slips and statements |
| What is one thing credit is not? | Free Money |
| What is Credit? | A system which allows banks to loan out money. You have to pay it back by a certain time period. |
| Why do Credit Cards seem convenient? | They allow you to buy the things you want now, even if you don't have the money. |
| What's a good formula to use if you wish to make a large payment on a credit card? | item cost/pay each month= time it takes to pay off debt. Add 1-2 months for interest. |
| If managed wisely, what can credit cards give you? | Good Credit. |
| What is a credit rating? | Score, based on your behavior when paying back a loan. |
| What is the range of a credit score? If your score goes up, what does that mean? | In p |
| The concept of insurance: | -Customer agrees to make payments (premiums) -Insurer pays if certain losses occur -Premiums from customers pay for claims -Compensation based on (value as is or replacement cost) for an extra charge -Customer pays the first part of the loss—the deductible |
| Types of Insurance (life): | -Helps protect loved ones from a life lost due to unforeseen or unexpected circumstances. (accidental death, Pre-mature death, etc.) |
| Critical Illness Insurance: | -Protects loved ones from lost income due to unforeseen or unexpected illness. (Cancer, Heart Attack, Lyme’s Disease) |
| Home Insurance: | -Protects Homeowner from unforeseen or accidental damage due to property or contents within (Tree Falls, Vehicle Rams into…, fire etc.) |
| Tenant or “content” Insurance: | -Protects renters from lost or stolen content within their premises…cost runs from $30-$300 a year. |
| Auto Insurance: | -If you drive, your car must be insured. -It’s the law -It protects you from the cost of a crash -It protects other people |
| Basic Insurance Covers: | -Third-party liability (people other than you, injury, loss or work, property) -Accident benefits -Uninsured protection |
| Optional Insurance Includes: | -Collision (hitting property or people) -Comprehensive (Wind shields, fire, theft, weather, animals) -Contents and equipment -Extended third party liability |
| Liquidity | the ability to sell an investment quickly at or near current market price |
| Three Knows: | -Know yourself -Know your Advisor -Know your Investment |
| Diversification: | (means don’t put all your eggs in one basket: Spread your money over a variety of investments) |
| What are savings? | -Money you’re not spending -What are Investments? -A way to put money to work -Savings accounts or bonds that pay interest, stocks, etc. |
| Main Types of Investment: | -Shares in a company (equities or stocks) -Investments that pay interest (saving accounts, GICs and bonds) -Property, such as land and buildings, collectibles and other valuable object’s -Direct investment in a business (setting up or buying a business) |
| Whats the Expected Return-the profit that you hope to receive? | -Income from interest or dividends -Increased value (capital gains) Actual Return –the profit (or loss) that you actually receive - Could be very different from expected return |
| Phishing: | The attempt to acquire sensitive information such as usernames, passwords, and credit card details (and sometimes, indirectly, money), often for malicious reasons, by masquerading as a trustworthy entity in an electronic communication. |
| Vishing: | The act of using the telephone in attempting to scam the user into surrendering private information that will be used for identity theft. The scammer usually pretends to be a legitimate business, and fools the victim thinking he or she will profit. |
| Smishing: | A security attack in which the user is tricked into downloading a Trojan horse, virus or other malware onto his cellphone or other mobile. |
| Card Skimmers: | The theft of payment card information used in an otherwise legitimate transaction when a small electronic device (Skimmer) is used to swipe and store hundreds of victims’ card numbers. |
| Popular Scams: | -Phone scams -Investment Scams -Email appeals -On-line sales -Cheque Overpayments |
| Biometrics: | Authentication techniques that rely on measurable physical characteristics that can be automatically checked. Ex. Iris Scan |
| RFID Readers: | RFID tags are small, wireless devices that emit unique identifiers upon interrogation by RFID readers, which emit powerful electromagnetic fields and “read” tag information. |
Want to create your own Flashcards for free with GoConqr? Learn more.