Page 143 - Bus101FlipBook

CH 8] Business 101 8-9

United Missouri was one of the UMB Commercial Cards
first banks in the nation to
introduce the MasterCard Credit Card Benefits
BusinessCard. The credit card  Billing Options
was developed in response to
customer demand to control  Spending Controls
the $10 billion business travel  Worldwide Acceptance
expense industry. The  Business Reporting Packages
BusinessCard offers company
travelers acceptance of the  Online Account Access
MasterCard at millions of mer-  Fraud Protection
chants worldwide and a re-
porting system that identifies
business-related travel and
entertainment expenses. Card
holders receive monthly re-
ports detailing their business
expenses.
Photo source: Courtesy of United Missouri Bancshare, Inc.

banks and savings banks. The holder of the account only needs to execute a demand
(write a check) and the money may be withdrawn immediately, on demand, without demand deposits
Promises to pay
prior notice to the bank. Of course, the bank will not honor the demand if there are immediately to the depositor
insufficient funds in the account to meet the demand. any amount of money
Checks are a very popular form of payment and Americans write and cash more requested as long as it does
than 1,000 checks a second. There are several reasons for this frequent use of checks: not exceed the account
balance.
1. Checks are more secure than currency; they reduce the possibility of theft or
loss of currency because checks cannot be spent by anyone other than the
account holder.
2. A check is a convenient form of payment for large purchases or odd-
numbered purchases. For example, writing a check for a $132.45 jacket is
more convenient than handing the salesperson the exact purchase price of six
$20s, a $10, two dollars, one quarter, a dime, and a nickel.
3. It is safer than carrying large amounts of cash which invite crime.
4. Checks make bill payment by mail easier and safer.
5. Negotiated checks or bank generated images provide evidence of a negotiable order of
transaction for taxation audits. withdrawal (NOW)
account
Interest-Bearing Checking Accounts. The federal government, as a part of Interest-bearing checking
banking deregulation in the 1980s, decided to permit commercial banks, savings and account offered by
loan associations, and savings banks to offer interest-bearing checking account called a commercial banks, savings
negotiable order of withdrawal (NOW) account. The interest paid on these accounts and loan associations, and
savings banks.
offer the holder the opportunity to maintain value of the money in the account by
offering the benefit of earning interest on those funds in deposit. Credit unions offer share draft accounts 8
their members what is called share draft accounts. These are interest-bearing Interest-bearing credit
accounts that permit the account holder to write drafts that are essentially checks. union accounts that
permit depositors to
M2 write drafts against
them.
M2 is the second level of the money supply measurement. M2 adds time deposits,
and money market accounts to the M1 calculation. As of December 2020, the M2 M2
money supply was 19187 USD Billion. (19 Trillion, 187 Billion U.S. Dollars) Adds time deposits, and
Time Deposits. Commercial banks and savings banks offer savings accounts to money market accounts
to the M1 calculation.
their customers. Savings accounts that allow the bank to require notice prior to the
account holders withdrawing their funds and may allow the institution to assess a time deposit
penalty for early withdrawal is termed a time deposit. Time deposits are liquid, even Account that requires
though they are not used for transactions or as a medium of exchange. Time deposits prior withdrawal notice to
avoid penalty.
will offer the holder a higher interest rate than a regular savings account.
Money Market Accounts. Money market accounts are accounts that offer interest
rate returns that are competitive with short-term investments such as short-term U.S.

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