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BankFinance_Unit3

Bank & Finance Unit 3 - Savings, Loans, & Investments

Annual Percentage Rate APR; annual rate of interest
Depositor person who deposits money in a bank or who has a bank account
FDIC a federally sponsored corporation which insures accounts in national banks and other qualified institutions up to $100,000; Federal Deposit Insurance Corporation
Interest the amount of money paid by a customer to a financial institution for borrowing money through a loan, credit card, etc.
Required Minimum Balance least amount required to be kept on deposit in a bank account
Credit Score represents creditworthiness in a person, which is the likelihood he/she will pay debts in a timely manner
FICO Fair Isaac Credit Organization; credit score used by most lenders
Big Ticket Purchases retail goods which have a high selling price in comparison to other items
Fixed Rate Interest interest rate does not fluctuate during the fixed rate period of the loan
Adjustable Rate Interest interest rate may fluctuate up or down during the term of the loan
Installments buyer gains use of the commodity immediately and pays for it in periodic payments
Lump Sum single sum of money which serves as complete payment
Collateral property acceptable as security for a loan or other obligation
Application Fee money paid to the bank or mortgage company to cover expenses of processing a loan application
Credit Check when a potential lender buys a copy of one’s credit history to determine whether or not he/she is someone with the ability and character to repay a debt
Net Worth total assets minus liabilities or debt
Stocks ownership of a corporation indicated by shares which represent a piece of the corporation’s assets and earnings
Bonds debt securities issued by a corporation or unit of government to raise money
Portfolio total holdings of the securities, commercial paper, etc. of a financial institution or private investor
Trade used to describe buying and selling stocks or bonds on the capital market
Capital Market where securities are bought and sold allowing companies and governments to raise long-term funds; where new issues of stocks and bonds are distributed to investors and existing securities are traded
Bear Market a decline in the capital market’s overall value occurs which reflects a substantial drop in the prices of a range of issues over a defined period of time
Bull Market an increase in the capital market’s overall value occurs which reflects an increase in the value of the companies who are represented in the market
Personal Savings Account the best account for transferring monthly money from a new savings account into a personal checking account
Certificate of Deposit Account a type of account that you can invest in where you will not need access to your money for a set amount of time
Basic Savings Account an account with an advantage that allows you to access your money anytime you want
FDIC most basic savings accounts are insured by this institution
Minimum Balance normally required for you to maintain in order to keep your checking/savings account open
Service Fees you usually do not have to pay these if you have the advantage of a checking and savings account at the same bank
Online Banking allows you access to checking and savings account at almost any time
Credit Bureaus institutions responsible for providing your credit score; Equifax, Experian, and TransUnion
Credit History this is gathered from your public record and customer credit information
Payment History this is the most important component of your credit score
Loan Application lenders have you fill this out and they look at your expenses, obligations, income, and credit history and score
Loan Payment this payment targets a specific date to pay off the amount borrowed
Principal known as the amount of money actually borrowed with the loan
Cost (Interest) known as the additional amount of money you will repay to the bank, along with the amount borrowed with the loan
Term known as the length of time you have to pay the loan back in full to the lender
Secured Loan a loan guaranteed with collateral
Lump Sum Loan a loan due in one full payment
Installment Loan requires the borrower to make monthly, or other types of regular payments
Line of Credit known as having a set limit of money which can be borrowed at any one time and interest is only paid on the amount borrowed
Upfront Fees fees that are usually included for application processing, attorney's expertise, and your credit report
Investments contains the three major categories of stocks, bonds, and cash
Down Payment a payment that goes toward the ownership of your new home
Homeowner the party responsible for maintenance and repairs of the home you own
Value homeowners see an increase in this if they maintain their home over time
Single Family Home the best home choice for a couple looking for their first residence in a suburban neighborhood
Real Estate you can “flip” it, use it as rental property, or as your primary residence
Taxable Account you will owe income tax on any interest or returns you earn on your investment, but the principal amount invested is not taxed
Created by: Mr.Johnston