A bank run occurs when large groups of depositors withdraw their money from banks at the same time, out of fear that the institution will become insolvent.
As more people withdraw money, banks will use up their cash reserves and eventually fail.
Bank runs have occurred throughout history, including during the Great Depression and the financial crisis of 2008-2009.
The Federal Deposit Insurance Corporation was created in 1933 in response to bank runs.
Silent bank withdrawals occur when funds are withdrawn via wire transfer rather than in person.
The 3-6-3 rule is a slang term for an informal practice in banking, especially in the 1950s, 1960s and 1970s, that was the result of the industry’s uncompetitive and simplistic conditions.
The account balance represents the available funds or present value of an account of a particular financial account, such as a checking, savings or investment account.
The annual equivalent rate (AER) is the actual interest rate on investments, loans or savings accounts that can be obtained after compounding interest.
The bank reconciliation report summarizes the banking and commercial activities by reconciling the organization’s bank account with its financial statements.
A canceled check is a check that has been redeemed by cashing or depositing it, making the check invalid for further transactions and cannot be reused.