Account
A financial asset or liability held and owned under your name. When you open a checking, savings, certificate of deposit (CD) or money market account—you have certain rights as an account holder.
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APR (Annual Percentage Rate)
The total annual cost of borrowing a loan, including interest and fees. Most lenders require you to agree to the rate they quote before they will lend money.
APY (Annual Percentage Yield)
Savings accounts, money market deposit accounts and certificates of deposits offer different interest rates. The annual percentage yield (APY) is a way to compare these savings options by taking into account the compounding effects that occur when you regularly add funds to your account.
ATM (Automated Teller Machine)
Banks with convenient locations and an ATM network are perfect for basic banking transactions, such as withdrawing cash or checking balances.
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Available balance
The amount of money in your bank account that you can use to buy things or pay bills. Some transactions may still be pending (not yet completed) and so they will not be part of the available balance.
Cash equivalents
Accounts that hold funds that can be accessed immediately without penalty or risk of loss. FDIC-insured bank savings and checking accounts, as well NCUA-backed credit union money market accounts are considered safe and liquid places to hold cash.
Cheque
A cheque instructs the writer’s bank to make a payment to someone else. Some people write paper cheques and other people use their banks' online bill pay features, which generate electronic versions of checks that can be sent over the Internet.
Checking account
A checking account, sometimes referred to simply as a bank account, is the place where people keep money and maintain records of their transactions.
Laine RedpathCompound interest
When you deposit money into an account that offers a rate of interest, the greater amount your savings earn over time as compound interest takes effect. Compound interest allows you to earn more money on your savings by earning interest not only on the amount in your account, but also on previous earnings.
Conditions
Terms and conditions are basically the rules that you agree to when opening a bank account or taking out a loan. Make sure you read them carefully, because violating them can have serious consequences.
Credit/credit history/credit score
Credit refers to a person's ability to borrow money and pay it back –a record compiled by credit bureaus of when someone pays bills on time. A high credit score can help you get lower interest rates on loans, better terms and larger amounts of money, among other benefits.
Debit card
A debit card works like a credit card but it is connected to your bank account. The money you spend with the debit card gets deducted from that same account rather than charging interest.
Direct deposit
A payment method where people can sign up to have their paychecks automatically deposited into their account (without having to endorse and deposit a cheque), many banks offer reduced fees for those customers.
Electronic funds transfer (EFT)
An electronic method of transferring funds between banks, businesses or individuals.
Electronic signature
Electronic signatures have the same legal validity as paper contracts--and often carry more weight in disputes because they are easier to find and produce as evidence than handwritten documents can be.
Investments
Investments are financial assets that are purchased and sold by investors, with the goal of earning a return on investment (ROI). Common types of investments include stocks, bonds, and mutual funds.
There are a number of investment alternatives to traditional savings accounts, such as gold and fine art. Unlike bank savings and checking accounts, investments carry risks of loss but can also reap substantial rewards in the form of higher interest rates or increased liquidity if sold at a profit.
Joint account
A joint account is an account that two or more people have equal rights to use. For example, many married couples have a joint checking account that allows them both write checks and make deposits into the same shared bank balance.
Online bank
Online banks offer most of their services through websites or mobile apps, allowing users to perform financial transactions from any location at any time.
Savings account
When you opened a savings account, you began your banking career. You have many options for where to stash your money safely –banks and credit unions alike.
Wire transfers
Wire transfers are another type of electronic funds transfer. They typically involve paying a fee depending on whether the transfer is incoming or outgoing and domestic (within your country) or international.
