Terms Used In Banking And Finance Pdf
File Name: terms used in banking and finance .zip
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks.
- Complete List of Banking Terms with Definitions For Bank Exams
- English for Banking: 30 Terms for Spending, Lending and More
- Glossary of Banking terms A-Z
Complete List of Banking Terms with Definitions For Bank Exams
The contract governing your open-end credit account, it provides information on changes that may occur to the account. The payment history of an account over a specific period of time, including the number of times the account was past due or over limit.
Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account. Interest that has been earned but not yet paid.
Also known as variable-rate mortgages. The initial interest rate is usually below that of conventional fixed-rate loans. The interest rate may change over the life of the loan as market conditions change. There is typically a maximum or ceiling and a minimum or floor defined in the loan agreement. If interest rates rise, so does the loan payment. If interest rates fall, the loan payment may as well.
Under the Equal Credit Opportunity Act, a creditor's refusal to grant credit on the terms requested, termination of an existing account, or an unfavorable change in an existing account. See related questions about Credit Denials. The notice required by the Equal Credit Opportunity Act advising a credit applicant or existing debtor of the denial of their request for credit or advising of a change in terms considered unfavorable to the account holder.
A sworn statement in writing before a proper official, such as a notary public. See related questions about Credit Disputes and Forgery and Fraud. Any change involving an erasure or rewriting in the date, amount, or payee of a check or other negotiable instrument. See related questions about Alteration.
The process of reducing debt through regular installment payments of principal and interest that will result in the payoff of a loan at its maturity.
A percentage rate reflecting the total amount of interest paid on a deposit account based on the interest rate and the frequency of compounding for a day year. Under the Equal Credit Opportunity Act ECOA , an oral or written request for an extension of credit that is made in accordance with the procedures established by a creditor for the type of credit requested.
See related questions about Loan Application Denials. The act of evaluating and setting the value of a specific piece of personal or real property. See related questions about Home Equity Appraisals. The issuance of approval, by a credit card issuer, merchant, or other affiliate, to complete a credit card transaction.
A computerized facility used by member depository institutions to electronically combine, sort, and distribute inter-bank credits and debits. ACHs process electronic transfers of government securities and provided customer services, such as direct deposit of customers' salaries and government benefit payments i.
See related questions about Electronic Transactions. A machine, activated by a magnetically encoded card or other medium, that can process a variety of banking transactions. These include accepting deposits and loan payments, providing withdrawals, and transferring funds between accounts.
As of May 1, , up to two months of Federal benefits such as Social Security benefits, Supplemental Security Income benefits, Veteran's benefits, Railroad Retirement benefits, and benefits from the Office of Personnel Management that are direct deposited to an account may be protected from garnishment. The amount automatically protected will depend upon the balance of the account on the day of review.
See related questions about Garnishments. A checkless system for paying recurring bills with one authorization statement to a financial institution. Bank's policy as to when funds deposited into an account will be available for withdrawal. See related questions about Funds Availability.
The balance of an account less any hold, uncollected funds, and restrictions against the account. The difference between the credit limit assigned to a cardholder account and the present balance of the account.
See related questions about Credit Cards. The process of moving an outstanding balance from one credit card to another. This is usually done to obtain a lower interest rate on the outstanding balance.
Transfers are sometimes subjected to a Balance Transfer Fee. See related questions about Balance Transfers. A bank custodian is responsible for maintaining the safety of clients' assets held at one of the custodian's premises, a sub-custodian facility or an outside depository. See related questions about Bank Custodians. Examination of a bank's assets, income, and expenses-as well as operations by representatives of federal and state bank supervisory authority-to ensure that the bank is solvent and is operating in conformity with banking laws and sound banking principles.
Periodically the bank provides a statement of a customer's deposit account. It shows all deposits made, all checks paid, and other debits posted during the period usually one month , as well as the current balance.
A business day during which an office of a bank is open to the public for substantially all of its banking functions. See related question about Funds Availability. A bankrupt person, firm, or corporation has insufficient assets to cover their debts. The debtor seeks relief through a court proceeding to work out a payment schedule or erase debts.
In some cases, the debtor must surrender control of all assets to a court-appointed trustee. The legal proceedings by which the affairs of a bankrupt person are turned over to a trustee or receiver for administration under the bankruptcy laws. There are two types of bankruptcy:. A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. The month, date, and year when a periodic or monthly statement is generated.
Calculations have been performed for appropriate finance charges, minimum payment due, and new balance. A charge that appears on a periodic statement associated with an extension of credit e. A billing error can also be caused by a creditor's failure to credit a payment or other credit to an account as well as accounting and clerical errors. See related questions about Credit Card Disputes.
Savings bonds are issued in face value denominations by the U. They are typically long-term, low-risk investment tools. See related questions about Savings Bonds.
Any day on which offices of a bank are open to the public for carrying on substantially all of the bank's business. A check that a bank has paid, charged to the account holder's account, and then endorsed. Once canceled, a check is no longer negotiable. A check drawn on the funds of the bank, not against the funds in a depositor's account. However, the depositor paid for the cashier's check with funds from their account. The primary benefit of a cashier's check is that the recipient of the check is assured that the funds are available.
See related questions about Cashier's Checks. A negotiable instrument issued by a bank in exchange for funds, usually bearing interest, deposited with the bank. See related questions about Certificates of Deposit.
A certificate signed by a lender indicating that a mortgage has been fully paid and all debts satisfied, also known as release of lien. See related question about Lien Release. A personal check drawn by an individual that is certified guaranteed to be good.
The face of the check bears the words "certified" or "accepted," and is signed by an official of the bank or thrift institution issuing the check. The signature signifies that. The balance on a credit obligation that a lender no longer expects to be repaid and writes off as a bad debt. See related question about Charge Off.
A written order instructing a financial institution to pay immediately on demand a specified amount of money from the check writer's account to the person named on the check or, if a specific person is not named, to whoever bears the check to the institution for payment. Check 21 is a Federal law that is designed to enable banks to handle more checks electronically, which is intended to make check processing faster and more efficient.
Check 21 is the short name for the Check Clearing for the 21st Century Act, which went into effect on October 28, See related question about Check The conversion of data on a check into an electronic image after a check enters the processing system. Check truncation eliminates the need to return canceled checks to customers.
The ChexSystems, Inc. ChexSystems shares this information among member institutions to help them assess the risk of opening new accounts. ChexSystems only shares information with the member institutions; it does not decide on new account openings. Generally, information remains on ChexSystems for five years. See related questions about ChexSystems.
Generally, any credit sale agreement in which the amount advanced, plus any finance charges, is expected to be repaid in full by a specified date. Most real estate and automobile loans are closed-end agreements. Generally, any loan in which the amount advanced, plus any finance charges, is expected to be repaid in full by a specified date. The consummation of a contractual real estate transaction in which all appropriate documents are signed and the proceeds of the mortgage loan are then disbursed by the lender.
The expenses incurred by sellers and buyers in transferring ownership in real property. The costs of closing may include the origination fee, discount points, attorneys' fees, loan fees, title search and insurance, survey charge, recordation fees, and the credit report charge. Assets that are offered to secure a loan or other credit.
English for Banking: 30 Terms for Spending, Lending and More
The contract governing your open-end credit account, it provides information on changes that may occur to the account. The payment history of an account over a specific period of time, including the number of times the account was past due or over limit. Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account.
Glossary of Banking terms A-Z
Understanding basic banking and finance — and the terminology people use to talk about them — can make a big difference in your bank balance. Here are 10 banking terms you should know to manage your money better. A nine-digit number that identifies your financial institution. Larger banks may have multiple routing numbers that are based on the geographic location where the account was opened. The Federal Deposit Insurance Corp.
The words, expressions, institutions and definitions of the Banking and Finance industry can often seem dense and confusing to an undergraduate, even to one aspiring to the financial world themselves. So, we've brought together a glossary for the most common terms to help you get up to speed. An item of property owned by a person or company regarded as having a value, and which can meet a debt. The central bank for the UK.
However, since banking is a significant part of our business and personal life, it is useful for consumers to learn some common banking terms. Sign in. Log into your account. Password recovery.
How to Learn the Banking Terms in This Post
ABS expresses principal prepayments as a percentage of the original number of loans or contracts in the pool of securitized loans that created the security. ABS is always expressed as a monthly rate. Absorption A term used by real estate lenders and developers to describe the process of renting up newly built or renovated office space or apartments. The term "absorption period" is often used to describe the period of time necessary for absorption. Abstract of title A written report summarizing the history of title transactions and conditions of title that affect a given piece of land covering the period from the present back to a date in the past.