Glossary of Terms

Glossary of Terms

Categories of terms
Banking,Credit, Debt, Income, Insurance, Tax, Savings, Investing, Loans

Banking

ATM: (Automated Teller Machine) An electronic banking outlet, which allows customers to complete basic transactions without the aid of a branch representative or teller.
Bank: Is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.
Bank Account: When a person entrusts there funds to a bank. The person can make withdrawals from this fun and, in many cases, can make interest off the money left in the bank.
Certificate of Deposit: (Also known as a CD) Is a certificate issued by a bank to a person depositing money for a specified length of time. A CD has a maturity date with a fixed interest rate. They can vary from a month to 5 years and can be issued in any denomination.
Checks: A written order for the bank to pay money. The money is given when the check is presented to the bank.
Credit Union: A nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates.
Deposit: A sum of money placed or kept in a bank account, usually to gain interest.
Loans: Loans are a sum of money that is borrowed that is expected to be paid back with interest.
Mortgages: The charging of property by a debtor to a creditor as security for a debt (esp. one incurred by the purchase of the property), on the condition that it shall be returned on payment of the debt within a certain period.
Safe Deposit Box: a fireproof metal strongbox (usually in a bank) for storing valuables.
Savings and Loaning Association (S&L).

Credit – (Bank Credit)

Bank Account: When a person entrusts there funds to a bank. The person can make withdrawals from this fun and, in many cases, can make interest off the money left in the bank.
Closed-ended credit: A loan or credit is given to the person in full once the loan closes and much be paid in full, including an interest and charges by a specific date.
Credit: The ability to obtain goods or services before payment, based on the trust that payment will be made in the future. This is usually a limit to how much credit a person can have. Usually interest is added if the payment is not made on time.
Creditor: It is similar to a lender. It is a person or company to whom money is owed.
Credit Card: A plastic card that is issued by a bank, business etc. for purchases of goods or services on credit.
Credit History: (Also known as credit report) It is a record of the person or company’s borrowing and repaying history.
Credit Card Issuer: The bank or lenders that gives a person a credit card.
Credit Limit: Is the maximum amount of credit that a financial institution will extend to a debtor for a specific line of credit.
Credit Rating: An estimate of the ability to fulfill financial commitments, based on past history.
Credit Report: (Also known as credit history) A credit report is a record of your credit history that includes information about your identity (Name, address, SSN, date of birth and sometimes employment information). The credit history contains your borrow and repaying history.
Credit Score: A credit score is a number that reflects the information in your credit report. The score summarizes your credit history and helps lenders predict how likely it is that you will repay a loan and make payments when they are due. Lenders may use credit scores in deciding whether to grant you credit, what terms you are offered, or the rate you will pay on a loan.
Lenders: An organization or person that lends money.
Loans: Loans are a sum of money that is borrowed that is expected to be paid back with interest.
Open-ended credit: This is a type of credit where the lender places a limit to how much can be borrowed in a period of time (usually a month).
Prime Rate: The prime rate is an interest rate determined by individual banks.

Debt

Bankruptcy: A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition usually filed by the debtor. All of the debtor’s assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.
Credit Card: A plastic card that is issued by a bank, business etc. for purchases of goods or services on credit.
Credit Card Issuer: The bank or lenders that gives a person a credit card.
Debt: Money that is owed or due. This could be debt accrued on the use of a credit card or by receiving a loan.
Debtor: A person or institution that owes a sum of money.
Insolvent: Unable to pay debts owed.
Interest Rate: The percentage of a sum of money charged for its use.
Mortgage: The charging of property by a debtor to a creditor as security for a debt (esp. one incurred by the purchase of the property), on the condition that it shall be returned on payment of the debt within a certain period.
Past Due: Most lenders allow a specified period after a due date during which payment can be made without penalty. Any amount owed that is not received by the end of this grace period is considered past due.

Income

Adjusted Gross Income: Adjusted Gross Income is defined as gross income minus adjustments to income.
Earned Income: Money derived from paid work.
Gross income: An individual’s total personal income before taking taxes or deductions into account.
Interest Income: A term used by companies to represent passive income. This money is usually interest earned on cash that is temporarily held in a savings account, CDs or investments.
Investments: The action or process of investing money for profit or material result.
Net income: The excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses)
Tax: a compulsory contribution to state and/or federal revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions.
Tax exempt: A security that is not subject to taxation.
Taxable income: The amount of income that is used to calculate an individual’s or a company’s income tax due.
Total Income: The sum of all taxable income, including the W-2 wages.

Insurance

Automobile insurance: Insurance against loss due to theft or traffic accidents of your automobile.
Damages: A sum of money claimed or awarded in compensation for a loss or an injury.
Claim: A demand for payment in accordance with an insurance policy or other formal arrangement.
Insolvent: Unable to pay debts owed.
Insurance: A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
Insurance brokers: An agent who sells insurance.
Insurance company: A financial institution that sells insurance.
Insurance policy: A document detailing the terms and conditions of a contract of insurance.
Insurer: The party in an insurance contract undertaking to pay compensation.
Liability insurance: The company’s liability insurance covers use of the equipment only whilst booked on ‘wet’ hire (supervised by a representative of the company).
Life insurance: Insurance that pays out a sum of money either on the death of the insured person or after a set period.
Personal line insurance: A general term that refers to any insurance that covers individuals or families, for example, health insurance or homeowners insurance.
Commercial line insurance: A general term used for any insurance that covers a company, for example, damage to company property.
Policyholders: A person or group in whose name an insurance policy is held.
Premium: An amount to be paid for an insurance policy.

Investing

Bank: Is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.
Certificate of Deposit: (Also known as a CD) Is a certificate issued by a bank to a person depositing money for a specified length of time. A CD has a maturity date with a fixed interest rate. They can vary from a month to 5 years and can be issued in any denomination.
Dividend: A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).
Government bonds: A bond that is an IOU of the United States Treasury; considered the safest security in the investment world
Interest Income: A term used by companies to represent passive income. This money is usually interest earned on cash that is temporarily held in a savings account, CDs or investments.
Investments: The action or process of investing money for profit or material result.
Investor: Someone who commits capital in order to gain financial returns.
Junk bonds: a high-yield, high-risk security, typically issued by a company seeking to raise capital quickly in order to finance a takeover.
Preferred Stocks: stock that entitles the holder to a fixed dividend, whose payment takes priority over that of common-stock dividends.
Return: A profit from an investment.
Speculator: A person who trades derivatives, commodities, bonds, equities or currencies with a higher-than-average risk in return for a higher-than-average profit potential.
Stock: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.
Stock Market: (Also known as Stock Exchange) A market in which securities are bought and sold.

Loans

Bank: Is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.
Borrower: Someone who receives something on the promise to return it or its equivalent.
Collateral: Something pledged as security for repayment of a loan, to be forfeited in the event of a default.
Credit Union: A nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates.
Federal Loans: Loans guaranteed by the U.S. government.
Interest: Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
Lender: An organization or person that lends money.
Loan: A thing that is borrowed, esp. a sum of money that is expected to be paid back with interest.
Mortgages: The charging of property by a debtor to a creditor as security for a debt (esp. one incurred by the purchase of the property), on the condition that it shall be returned on payment of the debt within a certain period.
Nonrecourse Loan: Is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable.
Principal: A sum of money lent or invested on which interest is paid.
Recourse Loan: A type of loan that allows a lender to seek financial damages if the borrower fails to pay the liability, and if the value of the underlying asset is not enough to cover it. A recourse loan allows the lender to go after the debtor’s assets that were not used as loan collateral in case of default.
Savings and Loan association: (Also known as S&L) is a financial institution that specializes in accepting savings deposits and making mortgage and other loans.
Secured loan: A loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.
Student Loans: A student loan is designed to help students pay for university tuition, books, and living expenses. It differs from other types of loans in that the interest rate is substantially lower and the repayment schedule is deferred while the student is still in education.
Subsidized Loans: A subsidized student loan is one on which the government actually pays the interest while a student remains enrolled in a qualified college or university.
Unsecured Loan: In finance, unsecured debt refers to any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation.
Unsubsidized Loans: loans that accrue interest from the date of disbursement and if there is unpaid interest it will be added back to the principal through a process called capitalization.

Tax

Tax: A compulsory contribution to state and/or federal revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions.
Capital gains tax: a tax levied on profit from the sale of property or of an investment.
Estate tax: A tax levied on the net value of the estate of a deceased person before distribution to the heirs.
Federal Income Tax: n income tax is a tax levied on the income of individuals or businesses (corporations or other legal entities) by the federal government.
Gift tax: A tax imposed on transfers of property by gift during the lifetime of the giver.
Income tax: Tax levied by a government directly on income, esp. an annual tax on personal income.
Property tax: A capital tax on property imposed by municipalities; based on the estimated value of the property
Sales tax: A tax on sales or on the receipts from sales.
State income tax: State income tax is an income tax in the United States that is levied by each individual state.
Taxable income: The amount of income that is used to calculate an individual’s or a company’s income tax due.

Savings

Bank: Is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.
Bank Account: When a person entrusts there funds to a bank. The person can make withdrawals from this fun and, in many cases, can make interest off the money left in the bank.
Bank charges: The term bank charge covers all charges and fees made by a bank to their customers. In common parlance, the term often relates to charges in respect of personal current accounts or checking account.
Checking Account: An account at a bank against which checks can be drawn by the account depositor.
Deposit
Interest: Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
Minimum balance: A specific amount of money that the bank requires to open or maintain a particular account, or avoid a service fee.
Money Market Accounts: A money market account (MMA) or money market deposit account (MMDA) is a deposit account offered by a bank, which invests in government and corporate securities and pays the depositor interest based on current interest rates in the money markets.
Savings Account: A bank account that earns interest.

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