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Strand 3
| Term | Definition |
|---|---|
| bank | Intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money) |
| credit union | A not-for-profit financial institution that accepts deposits, make loans, and provides a wide array of other financial services and products |
| balance | A measure of inflows and outflows that takes the capital and current accounts into consideration |
| checking | A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer |
| savings | The money that a person has left over after they subtract out their consumer spending from their disposable income over a given time period |
| credit | The ability of an individual or organization to obtain goods or services before payment, based on an agreement to pay later |
| debit | Money being paid out of a particular account |
| deposit | Money held in a bank account or with another financial institution that requires a transfer from one party to another. |
| FDIC | An independent agency created by the Congress to maintain stability and public confidence in the nation's financial system |
| NCUA | An independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions |
| interest | The amount of money a lender or financial institution receives for lending out money |
| principle | A set of rules or concepts that govern how people satisfy their unlimited wants with their limited resources |
| overdraft | Occurs when there isn't enough money in an account to cover a transaction or withdrawal, but the bank allows the transaction anyway |
| 50-30-20 rule | Spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do. The remaining half should be split up between 20% savings and debt repayment and 30% to everything else that you might want. |
| CD | A savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest |
| Compound interest | The interest you earn on interest |
| inflation | The rate of increase in prices over a given period of time |
| emergency fund | A cash reserve that's specifically set aside for unplanned expenses or financial emergencies |
| recession | A sustained period of weak or negative growth in real GDP (output) that is accompanied by a significant rise in the unemployment rate |
| IRA | An account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis |
| Roth IRA | A special individual retirement account (IRA) where you pay taxes on money going into your account, and then all future withdrawals are tax free |
| Cryptocurrency | Digital tokens |
| deductible | An expense that an individual taxpayer or a business can subtract from adjusted gross income while completing a tax form |
| premium | A price paid for above and beyond some basic or intrinsic value |
| max out of pocket | The most you have to pay for covered services in a plan year |
| liability insurance | An insurance product that provides protection against claims resulting from injuries and damage to other people or property |
| collision insurance | A coverage that helps pay to repair or replace your car if it's damaged in an accident with another vehicle or object |
| comprehensive insurance | A coverage that helps pay to replace or repair your vehicle if it's stolen or damaged in an incident that's not a collision |
| actuary | To analyze the financial costs of risk and uncertainty |
| medicare | The system of government subsidies for health care for the elderly and disabled |
| medicaid | A public health insurance program that provides health care coverage to low-income families and individuals in the United States |
| copay | A fixed out-of-pocket amount paid by an insured for covered services. |
| HMO | A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO |
| PPO | An organization providing health care that gives economic incentives to the individual purchaser of a health-care contract to patronize certain physicians, laboratories, and hospitals which agree to supervision and reduced fees |
| HSA | A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses |
| asset | A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit |
| bond | A debt security, similar to an IOU |
| Stock | A security that represents the ownership of a fraction of the issuing corporation |
| Dividend | A form of income that shareholders of corporations receive for each share of stock that they hold |
| Index Fund | A type of mutual fund or exchange-traded fund that seeks to track the returns of a market index |
| mutual fund | A company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt |
| pension | An employee benefit that commits the employer to make regular contributions to a pool of money that is set aside in order to fund payments made to eligible employees after they retire |
| portfolio | A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs) |
| security | The condition of having stable income or other resources to support a standard of living now and in the foreseeable future |
Created by:
Baileyd0717
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