some quick definitions to help you better understand
banking and finances!
The money put into a bank. Each customer has
his or her own account, and many customers have several
different kinds of accounts.
Savings Account is money put away for safekeeping.
A Charge or Credit Account is the amount
of money the customer is allowed to spend with the
understanding that they will pay the money back within
a pre-determined future period.
A Checking Account allows the customer
to write checks instead of using cash.
Asset: Anything you own that has some
at least some basic cash value. This can include
possessions, property, bank accounts, and, of course,
This stands for Automated Teller Machine. This
is a device provided by most banks and many businesses
that allows them to perform various banking activities
Card: A bank-issued card that allows customers
to use a bank's ATMs.
Basically, the amount of money in an account or, alternately,
how much money is owed on a loan. A Principal
Balance is the amount of money in an account before
interest is added.
Small, formalized notes that authorizes a bank to
pay a specified amount out of the customer's checking
account. Check forms are usually issued by the
An asset pledged as security in a loan.
Interest: Interest added to interest previously
earned on a principal balance. The more frequently
interest is compounded, the higher the amount the
account has "earned" for that period.
An amount of money that banks, merchants, and others
may make available to you in trust that you will pay
them back at a future date.
Card: A small, plastic card that authorizes
its user for a pre-determined credit limit.
Can be used for purchases and other money transfers.
Card: Instead of supplying credit which
must be later paid, a debit card subtracts money automatically
from a pre-existing account.
Placing money into an account.
Deposit: Money that is electronically placed
into an account.
The value of a property beyond the amount owed on
The amount of money a bank charges for providing a
certain service. For example, a bank may charge
a small fee each time a customer use an ATM machine.
Interest: The amount of money an account
accumulates over time. The exact amount depends
on the size of the account, the interest rate, and
how often the interest is compounded. You can
think of it as the amount of money in the account
"earns" for being in the bank for a certain amount
Rate: The percentage of the account that
is compounded. For example, if an account had
a $10 balance, a 10% rate would mean $1 would be added
to the account. There are IRA to help pay for education.
This stands for Independent Retirement Account.
This is a specialized, long-range savings account
people use to put money away for their retirement
years. Some IRA's may help pay for education.
An amount of money a bank will allow you to borrow
from them, with the understanding that you will pay
them back in the future on pre-arranged terms with
a certain amount of interest.
A special type of loan dedicated to the purchase of
a house or other real-estate property.
Fund: Money and assets that are held for
you in another's care for a specified period of time.
Removing money from an account.