MCS 2100 Chapter 4: Chapter 4
2 Mar 2015
School
Department
Course
Professor
Document Summary
Chapter 4: the banking services of financial intuitions. Savings services known as time deposits; include investments and savings accounts. Payment services services known as demand deposits; include chequing accounts: borrowing short term include cash loans, credit cards; long term include mortgages, other insurance, investment, tax assistance, trusts, resps. Electronic banking services: direct deposit earnings automatically deposited in accounts, automatic payments bills paid through direct withdrawal, atms can incur service charges. Stored-value cards prepaid cards for laundry, phone service, transit, etc. Smart cards cards with microchips that store prepaid amounts, personal account information: electronic cash to pay for online purchases. Consider trade-offs between satisfaction and financial security, like having high returns but low liquidity. When interest rates rise: use long-term loans to take advantage of current low rates. Select short-term savings instruments to take advantage of higher rates when they mature. When interest rates are falling: use short-term loans to take advantage of low rates when you refinance the loans.
