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Financial Calculators:

Mortgage Calculators

Investment Calculators

Retirement Calculators

Debt Calculators

Slavie Glossary of Terms



Word
Definition

Account

Money deposited with a bank for investment and/or safekeeping purposes.

Adjusted balance

The balance that remains when all payments made during a billing cycle are subtracted from the balance from the previous billing cycle. This balance does not include finance charges for the current billing cycle.

Adjustable Rate Mortgage (ARM)

Mortgage loan that allows the interest rate to be changed at specific intervals over the maturity of the loan.

Amortization

Gradual reduction of an amount over time.

Annual Percentage Rate (APR)

The cost of credit expressed as a yearly rate. APR is a percentage that results from an equation considering the amount financed, the finance charges, and the term of the loan.

Annual Percentage Yield (APY)

Amount of interest expressed as a percentage rate, a deposit account would earn in a year at a stated interest rate.

Appraised Value

Estimated value of an asset.

Assets

Items of monetary value (i.e. house, land, car), owned by an individual or a company.

ATM

Acronym for automated teller machine.

Average Daily Balance

The balance that results form adding together the entire daily balances of an account in the cycle and dividing by the number of days in the cycle. The balance is often used to calculate finance charges (credit) or interest (savings).

Balance

In banking, balance refers to the amount of money in a particular account. In credit, balance refers to the amount owed.

Bounced Check

A check that a bank has refused to cash or pay because there are no funds in the account to cover the transaction.

Bump-up CD

Certificate of Deposit with the option to increase the term rate should interest rates rise during the original term of the certificate.

Canceled Check

A 'used' check that has been paid and subtracted from the check writer's account. The images or in some cases the actual check are mailed to the writer each month with the account statement. Many banks keep records that are available upon request.

Capital

A stock of accumulated wealth used or available for producing more wealth.

Cashier's Check

A check issued by a bank, drawn on its own funds rather than on one of its depositor's funds.

Certificate of Deposit (CD)

A savings account in which an individual promises to deposit the money for a set period of time, for which the bank pays higher interest than a regular savings account.

Check

Any written document instructing a bank to pay money from the writer's account.

Check Card

Also known as 'debit card'. See definition for Debit Card.

Checking Account

An account for which the holder can write checks. Checking accounts pay less interest than savings accounts, or none at all.

Clear

A check 'clears' when its amount is debited (subtracted) from the payer's account and credited (added) to the payee's account.

Collateral

Anything that a bank accepts as security against the debtor's not repaying a loan. If the debtor fails to repay the loan, the bank is allowed to keep the collateral. Collateral is most commonly in the form of real estate (i.e. a home).

Compound Interest

Interest calculated not only on the original principal, but also on the interest already accrued.

Co-Signer

The person who signs on a credit agreement in addition to the primary applicant. This person is legally responsible for repayment of the debt.

Credit Card

A plastic card that gives access to a line of credit. Users are limited in how much they can charge, but they are not required to repay the full amount each month. Instead the balance (or 'revolve') accrues interest with only a minimum payment due.

Credit Limit

The maximum amount of money a borrower can access in a credit account.

Credit Rating

A banks evaluation of whether a person is suitable to receive credit. Credit ratings are based on an individual's character, capacity to repay and capital.

Credit Report

A summary of the credit usage of a consumer, including payment histories and current status of all credit accounts. This plays a very large part in the decision to grant credit to a consumer.

Credit

A bookkeeping term for a sum of money deposited to an account

Debit

A bookkeeping term for a sum of money owed by an individual or institution; a charge deducted from an account.

Debit Card

A banking card enhanced with ATM (automated teller machine) and POS (point-of-sale) features that can be used to purchase goods and services electronically. The card replaces cash or checks. Transactions are deducted from the cardholder's checking account either immediately or within one to three days. Depending upon the type of card, a debit card may require the user to sign his or her name or enter a PIN (personal identification number) into special equipment.

Deposit Slip

An itemized slip showing the exact amount of paper money, coin, and checks being deposited to a particular account.

Direct Deposit

Automatic deposit of wages or benefits (such as Social Security payments) into a consumer's bank account.

Endorse

To sign, as the payee, the back of a check before cashing, depositing, or giving it to someone else. The first endorsement must be made by the payee to authorize the transaction. Later endorsements may be made by whoever receives the check.

Federal Deposit Insurance Corporation (FDIC)

Federal agency established in 1933 that guarantees (within limits) funds on deposit in member banks and thrift institutions and performs other functions such as making loans to or buying assets from member institutions to facilitate mergers or prevent failures. Accounts are insured up to $100,000 in interest and principal ($250,000 for retirement accounts).

Federal Reserve System

A governmental agency established by Congress to organize and regulate banking throughout the United States. The twelve reserve banks keep paper and currency reserves for affiliated banks.

Fixed Rate

An interest rate that does not vary over time.

Floating Rate

Interest rate that changes whenever an index rate, or base rate (such as the bank prime rate) changes.

HELOC

An acronym used to identify a Home Equity Line of Credit.

Identity Theft

Misappropriation of an individual's identifying information with the intent to commit fraud. An individual who knowingly uses another person's Social Security number or driver's license or other personal identifying data to open fraudulent bank accounts or apply for fraudulent loans is committing identity theft.

Interest

The fee paid for the use of money. Interest may be paid, for example, by an individual to a bank for credit card use, or by a bank to an individual for holding a savings account. Interest is expressed in terms of annual percentage rate (APR).

Joint Account

A savings or checking account established in the names of more than one person.

Line of Credit

An authorized amount of credit given to an individual, business or institution.

Loan

Money advanced to a borrower, to be repaid at a later date, usually with interest.

Loan to value (LTV)

Relationship, expressed as a percent, between the principal amount of a loan and the appraised value of the asset securing the financing. In a residential mortgage loan, this is the percentage value of the property the lender is willing to finance with a mortgage.

Minimum Deposit

The smallest amount a consumer can deposit into an account.

Money Market Account (MMA)

A savings account that shares some of the characteristics of a money market fund. Money market accounts offer many of the same services as checking accounts, with limited transactions and the protection of being FDIC insured.

Overdraft

A check written for more money than is currently in the account. If the bank refuses to cash the check, it is said to have 'bounced'.

Personal Identification Number (PIN)

A code that provides security for consumers at an ATM.

Posting Date

The date when a transaction is recognized on your account.

Phishing

Phishing is the term used for Internet scammers looking to obtain victims financial information. Phishing is a high-tech scam that uses email, spam or pop-up messages to deceive a victim into disclosing credit card numbers, bank account information, Social Security number, passwords, or other sensitive information.

Principal

The original amount of money borrowed, deposited or invested before interest accrues.

Refinance

To revise a loan agreement to make the terms of payment more suitable to a borrower's present income and ability to repay. Refinancing usually provides a lower interest rate and lower monthly payments over a longer period of time.

Revolving Line of Credit

A credit agreement that allows a consumer to borrow a set amount of money then after repayment of any portion of that money the consumer may borrow again up to the original set amount. A credit card is a form of revolving credit.

Savings Account

A bank account that accrues interest in exchange for use of the money on deposit.

Securities and Exchange Commission (SEC)

Federal agency created by the Securities Exchange act of 1934 to monitor and regulate corporate financial reporting and disclosure, use of accounting principles, auditing practices, and trading activities. The SEC is made up of five commissioners, appointed by the President of the United States on a rotating basis for five-year terms.

Service Charge

A monthly fee a bank charges for handling a checking account.

Stop Payment

A request made to a bank to not pay a specific check. If requested soon enough, the check will not be debited from the payer's account. Normally there is a charge for this service.

Term

The period of time and the interest rate arranged between creditor and debtor to repay a loan.

Tiered Rate

A term that applies to interest rates where the actual rate applied depends on the balance on the account.

Transaction Date

The date that a purchase was made or a cash advance taken.

Unsecured Debt

A credit source that is not guaranteed with collateral.

Variable Interest Rate

An interest rate that changes and is determined by adding the index rate to the previously disclosed margin.

Wire Transfer

A transaction that electronically transfers money from one financial institution to another.

Withdrawal

An amount of money taken out of an account.

Yield

Rate of return to the investor from an asset.