1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Electronic Funds Transfers Money Orders Traveler's Checks Credit Card Accounts Repurchase Agreements Bank Notes Mutual Funds with Transaction Features Demand Debt with Transaction Features Discount window Large Negotiable CDs Commercial Paper Mortgages on bank buildings Capital notes and debentures

Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computerbased systems. The term covers a number of different concepts: Wire transfer via an international banking network Cardholder-initiated transactions, using a payment card such as a credit or debit card Direct deposit payment initiated by the payer Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services Electronic bill payment in online banking, which may be delivered by EFT or paper check Transactions involving stored value of electronic money, possibly in a private currency Electronic Benefit Transfer Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. One of the most widely-used EFT programs is Direct Deposit, in which payroll is deposited straight into an employee's bank account, although EFT refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire and point-of-sale (POS) transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments. Transactions are processed by the bank through the Automated Clearing House (ACH) network, the secure transfer system that connects all U.S. financial institutions. For payments, funds are transferred electronically from one bank account to the billing company's bank, usually less than a day after the scheduled payment date. The growing popularity of EFT for online bill payment is paving the way for a paperless universe where checks, stamps, envelopes, and paper bills are obsolete. The benefits of EFT include reduced administrative costs, increased efficiency, simplified bookkeeping, and greater security. However, the number of companies who send and receive bills through the Internet is still relatively small.

A money order is a payment order for a pre-specified amount of money. Because it is required that the funds be prepaid for the amount shown on it, it is a more trusted method of payment than a cheque. A money order is purchased for the amount desired. In this way it is similar to a certified cheque. The main difference is that money orders are usually limited in maximum face value to some specified figure (for example, the United States Postal Service limits domestic postal money orders

to US $1,000.00 as of July 2008) while certified cheques are not. Money orders typically consist of two portions: the negotiable check for remittance to the payee, and a receipt or stub that the customer retains for his/her records. The amount is printed by machine or checkwriter on both portions, and similar documentation, either as a third hard copy or in electronic form and retained at the issuer and agent locations A traveler's cheque (also traveller's cheque, travellers cheque, traveller's check or traveler's check) is a preprinted, fixed-amount cheque designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege. A medium of exchange that can be used in place of hard currency. Travelers' checks are often used by individuals who are traveling on vacation to foreign countries. The checks were first introduced by American Express back in 1891. Travelers' checks provide a safe way to carry currency abroad. Security is provided against lost or stolen checks by the issuing party - usually a bank. Specific checks are given unique check numbers, similar to a normal check. When a lost or stolen check is identified, it is simply canceled and the individual is re-issued a new check. Although banks issue the checks directly to individuals, they are produced by a separate party. A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest, sometimes called the repo rate. The party that originally buys the securities effectively acts as a lender. The original seller is effectively acting as a borrower, using their security as collateral for a secured cash loan at a fixed rate of interest. A repo is equivalent to a spot sale combined with a forward contract. The spot sale results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is effectively the interest on the loan, while the settlement date of the forward contract is the maturity date of the loan. In a repurchase agreement, or repo, one party sells assets or securities to another and agrees to repurchase them later at a set price on a set date. Transactions where the securities are sold one day and bought back the next day are known as overnight repos. If the agreement is for a longer period they are known as term repos; they can sometimes last for a month or more. Agreements where securities are bought for resale later are known as reverse repos. Many central banks use repos and reverse repos in government debt as part of their open market operations. In a repo the repurchase price is slightly higher than the sale price; this is the interest on the loan. When expressed as an annualised percentage of the sale price it is known as the repo rate. Traders engaging in short-selling use reverse repos to acquire the securities they sell short. A form of short-term borrowing for dealers in government securities. The dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day. For the party selling the security (and agreeing to repurchase it in the future) it is a repo; for the party on the other end of the transaction, (buying the security and agreeing to sell in the future) it is a reverse repurchase agreement. A banknote (often known as a bill, paper money or simply a note) is a type of negotiable instrument known as a promissory note, made by a bank, payable to the bearer on demand. When banknotes were first introduced, they were, in effect, a promise to pay the bearer in coins, but

gradually became a substitute for the coins and a form of money in their own right. Banknotes were originally issued by commercial banks, but since their general acceptance as a form of money, most countries have assigned the responsibility for issuing national banknotes to a central bank. National banknotes are legal tender, meaning that medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation.[1] Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment. This practice of "backing" notes with something of substance is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat. With the exception of noncirculating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values. The idea of a using durable light-weight substance as evidence of a promise to pay a bearer on demand originated in China during the Han Dynasty in 118 BC, and was made of leather. [2] The first known banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty (618907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions.[3][4][5] During the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century by travelers such as Marco Polo,[6][7] with proper banknotes appearing in 17th century Sweden. A financial security that generally has a longer term than a bill, but a shorter term than a bond. However, the duration of a note can vary significantly, and may not always fall neatly into this categorization. Notes are similar to bonds in that they are sold at, above or below face (par) value, make regular interest payments and have a specified term until maturity. The discount window is an instrument of monetary policy (usually controlled by central banks) that allows eligible institutions to borrow money from the central bank, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions. The term originated with the practice of sending a bank representative to a reserve bank teller window when a bank needed to borrow money.[1] The interest rate charged on such loans by a central bank is called the discount rate, base rate, or repo rate, and is separate and distinct from the Prime rate. It is also not the same thing as the federal funds rate and its equivalents in other currencies, which determine the rate at which banks lend money to each other . In recent years, the discount rate has been approximately a percentage point above the federal funds rate (see Lombard credit). Because of this, it is a relatively unimportant factor in the control of the money supply and is only taken advantage of at large volume during emergencies. Credit facilities in which financial institutions go to borrow funds from the Federal Reserve. These loans, which are priced at the discount rate, are often structured as secured loans to alleviate pressure in reserve markets. It helps to reduce liquidity problems for banks and assists in assuring the basic stability of financial markets. NCDs: A certificate of deposit with a minimum face value of $100,000. These are guaranteed by the bank and can usually be sold in a highly liquid secondary market, but they cannot be cashed-in before maturity. A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

Investopedia explains 'Certificate Of Deposit - CD'

A certificate of deposit is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty. For example, let's say that you purchase a $10,000 CD with an interest rate of 5% compounded annually and a term of one year. At year's end, the CD will have grown to $10,500 ($10,000 * 1.05). CDs of less than $100,000 are called "small CDs"; CDs for more than $100,000 are called "large CDs" or "jumbo CDs". Almost all large CDs, as well as some small CDs, are negotiable Commercial papers: An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates. Commercial paper is not usually backed by any form of collateral, so only firms with high-quality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue. A major benefit of commercial paper is that it does not need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months (270 days), making it a very cost-effective means of financing. The proceeds from this type of financing can only be used on current assets (inventories) and are not allowed to be used on fixed assets, such as a new plant, without SEC involvement. In the global money market, commercial paper is an unsecured promissory note with a fixed maturity of 1 to 15 days. Commercial paper is a money-market security issued (sold) by large corporations to get money to meet short term debt obligations (for example, payroll), and is only backed by an issuing bank or corporation's promise to pay the face amount on the maturity date specified on the note. Since it is not backed by collateral, only firms with excellent credit ratings from a recognized rating agency will be able to sell their commercial paper at a reasonable price. Commercial paper is usually sold at a discount from face value, and carries higher interest repayment rates than bonds. Typically, the longer the maturity on a note, the higher the interest rate the issuing institution must pay. Interest rates fluctuate with market conditions, but are typically lower than banks' rates.[

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Electronic Funds Transfers Money Orders Traveler's Checks Credit Card Accounts Repurchase Agreements Bank Notes Mutual Funds with Transaction Features Demand Debt with Transaction Features Discount window Large Negotiable CDs Commercial Paper Mortgages on bank buildings

13. Capital notes and debentures

Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computerbased systems. The term covers a number of different concepts: Wire transfer via an international banking network Cardholder-initiated transactions, using a payment card such as a credit or debit card Direct deposit payment initiated by the payer Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services Electronic bill payment in online banking, which may be delivered by EFT or paper check Transactions involving stored value of electronic money, possibly in a private currency Electronic Benefit Transfer Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money changing hands. One of the most widely-used EFT programs is Direct Deposit, in which payroll is deposited straight into an employee's bank account, although EFT refers to any transfer of funds initiated through an electronic terminal, including credit card, ATM, Fedwire and point-of-sale (POS) transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments. Transactions are processed by the bank through the Automated Clearing House (ACH) network, the secure transfer system that connects all U.S. financial institutions. For payments, funds are transferred electronically from one bank account to the billing company's bank, usually less than a day after the scheduled payment date. The growing popularity of EFT for online bill payment is paving the way for a paperless universe where checks, stamps, envelopes, and paper bills are obsolete. The benefits of EFT include reduced administrative costs, increased efficiency, simplified bookkeeping, and greater security. However, the number of companies who send and receive bills through the Internet is still relatively small.

A money order is a payment order for a pre-specified amount of money. Because it is required that the funds be prepaid for the amount shown on it, it is a more trusted method of payment than a cheque. A money order is purchased for the amount desired. In this way it is similar to a certified cheque. The main difference is that money orders are usually limited in maximum face value to some specified figure (for example, the United States Postal Service limits domestic postal money orders to US $1,000.00 as of July 2008) while certified cheques are not. Money orders typically consist of two portions: the negotiable check for remittance to the payee, and a receipt or stub that the customer retains for his/her records. The amount is printed by machine or checkwriter on both portions, and similar documentation, either as a third hard copy or in electronic form and retained at the issuer and agent locations A traveler's cheque (also traveller's cheque, travellers cheque, traveller's check or traveler's check) is a preprinted, fixed-amount cheque designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege. A medium of exchange that can be used in place of hard currency. Travelers' checks are often used by individuals who are traveling on vacation to foreign countries. The checks were first introduced by

American Express back in 1891. Travelers' checks provide a safe way to carry currency abroad. Security is provided against lost or stolen checks by the issuing party - usually a bank. Specific checks are given unique check numbers, similar to a normal check. When a lost or stolen check is identified, it is simply canceled and the individual is re-issued a new check. Although banks issue the checks directly to individuals, they are produced by a separate party. A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest, sometimes called the repo rate. The party that originally buys the securities effectively acts as a lender. The original seller is effectively acting as a borrower, using their security as collateral for a secured cash loan at a fixed rate of interest. A repo is equivalent to a spot sale combined with a forward contract. The spot sale results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is effectively the interest on the loan, while the settlement date of the forward contract is the maturity date of the loan. In a repurchase agreement, or repo, one party sells assets or securities to another and agrees to repurchase them later at a set price on a set date. Transactions where the securities are sold one day and bought back the next day are known as overnight repos. If the agreement is for a longer period they are known as term repos; they can sometimes last for a month or more. Agreements where securities are bought for resale later are known as reverse repos. Many central banks use repos and reverse repos in government debt as part of their open market operations. In a repo the repurchase price is slightly higher than the sale price; this is the interest on the loan. When expressed as an annualised percentage of the sale price it is known as the repo rate. Traders engaging in short-selling use reverse repos to acquire the securities they sell short. A form of short-term borrowing for dealers in government securities. The dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day. For the party selling the security (and agreeing to repurchase it in the future) it is a repo; for the party on the other end of the transaction, (buying the security and agreeing to sell in the future) it is a reverse repurchase agreement. A banknote (often known as a bill, paper money or simply a note) is a type of negotiable instrument known as a promissory note, made by a bank, payable to the bearer on demand. When banknotes were first introduced, they were, in effect, a promise to pay the bearer in coins, but gradually became a substitute for the coins and a form of money in their own right. Banknotes were originally issued by commercial banks, but since their general acceptance as a form of money, most countries have assigned the responsibility for issuing national banknotes to a central bank. National banknotes are legal tender, meaning that medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation.[1] Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment. This practice of "backing" notes with something of substance is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat. With the exception of noncirculating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values. The idea of a using durable light-weight substance as evidence of a promise to pay a bearer on

demand originated in China during the Han Dynasty in 118 BC, and was made of leather. [2] The first known banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty (618907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions.[3][4][5] During the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century by travelers such as Marco Polo,[6][7] with proper banknotes appearing in 17th century Sweden. A financial security that generally has a longer term than a bill, but a shorter term than a bond. However, the duration of a note can vary significantly, and may not always fall neatly into this categorization. Notes are similar to bonds in that they are sold at, above or below face (par) value, make regular interest payments and have a specified term until maturity. The discount window is an instrument of monetary policy (usually controlled by central banks) that allows eligible institutions to borrow money from the central bank, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions. The term originated with the practice of sending a bank representative to a reserve bank teller window when a bank needed to borrow money.[1] The interest rate charged on such loans by a central bank is called the discount rate, base rate, or repo rate, and is separate and distinct from the Prime rate. It is also not the same thing as the federal funds rate and its equivalents in other currencies, which determine the rate at which banks lend money to each other . In recent years, the discount rate has been approximately a percentage point above the federal funds rate (see Lombard credit). Because of this, it is a relatively unimportant factor in the control of the money supply and is only taken advantage of at large volume during emergencies. Credit facilities in which financial institutions go to borrow funds from the Federal Reserve. These loans, which are priced at the discount rate, are often structured as secured loans to alleviate pressure in reserve markets. It helps to reduce liquidity problems for banks and assists in assuring the basic stability of financial markets. NCDs: A certificate of deposit with a minimum face value of $100,000. These are guaranteed by the bank and can usually be sold in a highly liquid secondary market, but they cannot be cashed-in before maturity. A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

Investopedia explains 'Certificate Of Deposit - CD'

A certificate of deposit is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty. For example, let's say that you purchase a $10,000 CD with an interest rate of 5% compounded annually and a term of one year. At year's end, the CD will have grown to $10,500 ($10,000 * 1.05). CDs of less than $100,000 are called "small CDs"; CDs for more than $100,000 are called "large CDs" or "jumbo CDs". Almost all large CDs, as well as some small CDs, are negotiable

Commercial papers: An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates. Commercial paper is not usually backed by any form of collateral, so only firms with high-quality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue. A major benefit of commercial paper is that it does not need to be registered with the Securities and Exchange Commission (SEC) as long as it matures before nine months (270 days), making it a very cost-effective means of financing. The proceeds from this type of financing can only be used on current assets (inventories) and are not allowed to be used on fixed assets, such as a new plant, without SEC involvement. In the global money market, commercial paper is an unsecured promissory note with a fixed maturity of 1 to 15 days. Commercial paper is a money-market security issued (sold) by large corporations to get money to meet short term debt obligations (for example, payroll), and is only backed by an issuing bank or corporation's promise to pay the face amount on the maturity date specified on the note. Since it is not backed by collateral, only firms with excellent credit ratings from a recognized rating agency will be able to sell their commercial paper at a reasonable price. Commercial paper is usually sold at a discount from face value, and carries higher interest repayment rates than bonds. Typically, the longer the maturity on a note, the higher the interest rate the issuing institution must pay. Interest rates fluctuate with market conditions, but are typically lower than banks' rates.[