A
Account fee - The amount charged by a financial institution for the services they provide in managing the account. This may also be called the monthly service fee.
Automated teller machine (ATM) - A specialized computer used by bank customers to manage their money, for example, to get cash, make deposits, or transfer money between accounts.
Available balance - The amount of money in your account that you can use or withdraw. Your available balance may not reflect all transactions that you have made, for example checks you have written that have not yet been paid from your account.
B
Bank - A financial institution that handles money, including keeping it for saving or commercial purposes, and exchanging, investing, and supplying it for loans.
Bank account - A banking service allowing a customer's money to be handled and tracked. Common bank accounts are savings and checking accounts.
Bank statement - A monthly accounting document sent to you by your bank that lists your account balance at the beginning and end of the month, and all of the checks you wrote that your bank has processed during the month. Your statement also lists other deposits, deductions, and fees, such as service charges.
C
Check - A written order instructing the bank to pay a specific amount of money to a specific person or entity. The check must contain a date, payee (person, company, or organization to be paid), amount, and an authorized signature.
Check register - A small notepad you receive when you open a checking account for the purpose of tracking your checks, deposits, and current balance.
Checking account - A bank account that allows a customer to deposit and withdraw money and write checks. Using a checking account can be safer and more convenient than handling cash.
Credit history - A written record of a person's use of credit, including applying for credit, and using credit or loans to make purchases. Also called a credit record.
Credit score - a number assigned to a person that indicates to lenders their capacity to repay a loan.
Credit union - A non-profit financial institution that is owned and operated entirely by its members. Credit unions provide their members, including savings and lending. Large organizations may organize credit unions for their members, and some companies establish credit unions for their employees. To join a credit union, a person must ordinarily belong to a participating organization, such as a college alumni association or labor union. When a person deposits money in a credit union, he or she becomes a member of the union because the deposit is considered partial ownership in the credit union.
D
Debit card - A card linked to a checking account that can be used to withdraw money and make deposits at an ATM and to make purchases at merchants. When you use a debit card, the money will be deducted from the linked checking account.
Deposit - To put money into your account.
E
Earning power - The amount of money a person is able to make from his or her work.
F
Federal Deposit Insurance Corporation (FDIC) - An agency of the federal government the insures all bank deposits up to $250,000 a person.
G
Good credit - A situation in which lenders are willing to make loans to an individual, due to his or her good history of repaying debts.
J
Joint account - A bank account owned by two or more people who are equally responsible for the account.
L
Late fee - The charge or fee that is added to a loan or credit card payment when the payment is made after the due date.
M
Minimum balance - A specific amount of money required by a financial institution in order to open or maintain a particular account. In some cases, a financial institution may charge the account holder a fee, or even close the account, if the minimum balance is not maintained.
N
Non-sufficient funds - The lack of enough money in an account to pay a particular check or payment. Also known as insufficient funds. A check with insufficient funds may be returned unpaid to the person cashing it. This has a negative impact on the check writer's history of handling his or her account, and may prevent opening of future accounts. See also Overdraft.
O
Online banking - A service that allows you to handle banking activities by computer, using the internet.
Overdraft - When there is not enough money in an account to cover a transaction and the bank pays it on your behalf, creating a negative balance in the account that you that you need to repay.
P
Payee - The person, company, or organization to whom a check is written; a person or company who is to receive money.
Payor (or Payer) - The person or company from whose account the money is to be taken to pay a check; a person or company who pays money.
Personal identification number (PIN) - A secret combination of letters or numbers you use to gain access to your account through an electronic device such as an ATM.
R
Routing number - The nine-digit number on the bottom left hand corner of your checks, to the left of your account number. The routing number identifies the bank that issued the check. Every bank in the United States has at least one routing number.
W
Withdraw - To take money out of an account.
Withdrawal slip - A printed form supplied by a financial institution onto which the customer writes the amount of money to be taken out.
B
Budget - A monthly or yearly spending and savings plan developed by a person, family, or business. A written budget helps people to be better money managers and to prepare for major or unexpected expenses.
D
Debt - Money, goods, or services you owe to others.
Discretionary expense - The purchase of goods or services which are not essential to the buyer, or are more expensive than necessary. Examples include entertainment and restaurant meals.
E
Expense - For individuals, an expense is a cost of living for example rent or groceries. For businesses, an expense is any cost resulting from the money-making activities of the business.
F
Fixed cost, Fixed expense - For an individual, a fixed cost is an expense that stays the same each month, such as rent or a car payment. For a business, a fixed cost is an expense that does not vary depending on production or sales levels, such as an equipment lease or property tax.
Flexible expense - An expense that you can control or adjust, for example, how much you spend on groceries, clothes, or long distance phone calls.
I
Income - For an individual, income means the amount of money received during a period of time, including money received in exchange for labor or services, from the sale of goods or property, or as profit from financial investments. For a business, income is (all the money brought in) minus cost of sales, operating expenses, and taxes, over a given period of time.
R
Reconcile - The process used to determine if the balance in your account register matches the balance reported by the bank on your account statement. Also called balancing your account.
S
Savings account - A bank account that allows a customer to deposit and withdraw money and earn interest on the balance.
Savings account register - A small notepad you receive when you open a savings account for the purpose of tracking your deposits, withdrawals, and current balance.
A
Annual fee - The fee a credit card company charges a credit card holder to use the card for a year. Or, the fee a lender charges a borrower for the use of a line of credit for a year.
B
Bad credit - A situation in which lenders believe that, due to a borrower's poor history of repaying his or her degts, further loans to this person would be especially risky.
C
Co-signer - A second person who signs your credit or loan application. Just like the borrower, the co-signer on a loan is equally responsible for repaying the debt. Also called a co-borrower.
Cost of the loan - The total amount the borrower pays for a loan, including the amount borrowed (or principal), the total interest paid over the term of the loan, and all loan fees.
Credit - When a bank or business allows its customers to purchase goods or services on the promise of future payment. Also used to describe any item that increases the balance in a bank account. Deposits and interest payments are both examples of credits.
Credit card - Any card that may be used repeatedly to borrow money or buy products and services on credit. Credit cards are issued by financial institutions, retail stores, and other businesses. A credit card offers the card holder revolving credit that can be paid monthly with as little as the required minimum payment.
Credit limit - The maximum dollar amount the lender is willing to make available to the borrower according to the agreement between them. For example, if you have a credit card, the credit agreement will usually specify the maximum amount of money you are allowed to charge.
E
Establishing credit - Giving lenders the trust and confidence to make loans to you based on a good history of paying your debts.
F
Finance charge - The amount of money a borrower pays to a lender for the privilege of borrowing money, including interest and other service charges.
I
Interest - The amount of money paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. For example, you earn interest from a bank if you have a savings account and you pay interest to a lender if you have a loan.
Interest rate - The amount of interest paid per year divided by the principal amout (that is, the amount loaned, deposited, or invested). For example, if you paid $500 in interest per year for a loan of $10,000, the interest rate is 500 divided by 10,000, or five percent (5%).
L
Loan - An agreement between a borrower and a lender, where the borrower agrees to repay money with interest over a period of time.
M
Minimum payment - The least amount of money to be repaid on a loan or credit card in order to keep the account in good standing.
O
Outstanding balance - The amount still owed on a bill, loan, or credit line.
Overdraft protection - Offered by many banks, overdraft protection is a service that automatically transfers money from a linked account that you select, such as a savings or credit account, when you don't have enough money in your checking account to pay your transactions.
P
Principal - The total amount of money borrowed, loaned, invested, etc., not including interest or service charges.
R
Risk - The measurable likelihood of loss, or less-than-expected return, on an investment or a loan.
T
Term - A period of time over which a loan is scheduled to be repaid.. For example, a home mortgage may have a 30-year term, meaning it must be repaid within 30 years.
U
Unpaid balance - The amount that is still owed on a loan or credit card debt.
0-9
401(k) plan - A flexible retirement plan for businesses with employees. Investors in the plan don't have to pay taxes on the income they invest until they withdraw the funds at retirement age.
B
Bond - A debt investment where you loan money to a government or a business for a defined amount of time and at a fixed interest rate. Bonds are issued by companies, municipalities, states and federal governments to finance a variety of projects.
C
Certificate of deposit (CD) - An insured (no risk) time deposit with a bank. When you open a CD, you agree not to use the money for a specific period of time (from a few months to many years) and you earn interest. You can withdraw your money early but will have to pay a penalty.
E
Exchange traded Funds (ETFs) - Uniquely structured investment funds that track indexes, commodities and baskets of assets. ETFs trade just like stocks on regulated exchanges, and ETF prices fluctuate throughout each trading session in response to market events and investor activity.
M
Mutual Funds - An investment that is made up of a pool of funds collected from lots of investors to invest in securities including stocks, bonds and money market instruments.
R
Rule of 72 - A way to estimate the time or interest rate you would need to double your money on an investment. For example, if you have an investment that's earning 8% per year, 72 divided by 8 equals 9. This means it would take about nine years for your original investment to double.
S
Stocks - A type of investment that signifies ownership in a company. The value of a stock changes throughout the day. If the price goes up, the value of your investment increases; if the price falls, the value decreases.