Chapter 2
May be in the form of savings accounts, time deposits and special savings deposits or premium savings account.
Bank Accounts
Some banks charhe penalties when the balance goes below the minimum amount.
Minimum balance required
In some cases, interest rates are tiered. This means that interest rate changes depending on the balance in the bank account.
Interest rate
Interest rates
Is the account withdrawal anytime?
Limitations as to withdrawals
This refers to the track record of a bank in the handling of its finances and the integrity of the people comprising its management.
The Banks reputation
This refers to the insurance coverage for deposits received by a bank in the philippines, bank account are insured with the philippine deposit insurance corporate (PDIC) to the extent of 500,000 per borrower per bank.
Insurance
Is a type if a bank account from which individuals are made by issuing checks
Current Account
Deposit are made with the use of deposit slips is called
Checking Account
Is a type of bank account wherein deposits and withdrawals can be made anytime
Savings Account
Savings account is used to accumulative cash with the intension of transferring part thereof to other types of bank accounts with higher interest rates.
Savings account as first step in making investment
minimum balance ranger in current account
5,000 to 10,000
Minimum balance ranges in savings account
500 to 1,000
This refers to non-withdrawals of income earned on an investment so that it becomes part of the principal in succeding periods.
Compounding
Due to the effects of compounding, the earlier one saves the bigger. wpuld be the future value of his investment.
Time as an advantage
refers to cash entrysted to a trustee bank for investment in chosen items sych as treasurybills, loans, stocks, and bonds for the benfit of the designated beneficiary.
Trust Investment
The investors are called " "
Trustor
Grantor
Written evidences of ownership, interest, or participation, in an enterprise, or written evidences of indebtedness of a person or enterprise.
Securities
This refers to the trading of short term securities
Money Market
This refers to the trading of long term securities
Capital Market
The seller is the issuing entiry. In other words, the proceeds from sale of securities go to the issuing corporation.
Primary Market
The seller is a party other than the issuing entity
Secondary Market
Are evidences of indebtedness issued by an entity as a vehicle in borrowing from the public.
Credit Securities
Are promissory notes issued by big firms unquestionable credit standing and reputation.
Commercial Papers
is a certificate of indebtedness with fixed interest rate and maturity date.
Bonds
Issued by a government unit
Government bonds
Issued by a private corporation
Commercial Bonds
Secured by lien on real property
Mortgage Bonds
Secured by equipment of the company
Equipment trust bonds
Secured by securities invested in by the issuing company at the option of the bondholder
Collateral trust bonds
Secured by all of the free assets of issuing company so that in effect they are not secured by any specific asset.
Debenture Bonds
They can be called, redeemed or retired by issuing company before maturity date.
Callable Bonds
Redeemable bonds
Callable or redeemable bonds
They are not subject to calls or redemption or before maturity date
Non Callable Bonds
Non Callable or Non Redeemable Bonds
Non Redeemable Bonds
The entire principal will mature at one time
Straight Bonds
The principal mature in installments
Serial Bonds
They can be exchange for other securities if the company at the option of the bondholder
Convertible Bonds
They can be transferred to other parties by mere delivery because bondholders are not registered in the books of issuing entity.
Bearer Bonds
Interest coupons are attached to the bond certificated and interest is paid to the holder of said coupons
Coupon Bonds
They are registered in the books of the issuing entity so that they can be transferree to other parties only upon surrrender of the bond certificated to the issuing entity or its transfer agent.
Register Bonds
Are debt instrument issued by the government
Government Securities
Are government securities that mature in less than a year
Treasury Bills
Are government securities that mature beyond one year.
Treasury Bonds