200+ terms across all financial categories
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The actual rate of return earned on a savings deposit or investment taking into account the effect of compounding interest. APY is expressed as a percentage and shows how much you'll earn in one year.
The yearly interest rate charged on borrowed money or earned on an investment, expressed as a percentage. Unlike APY, APR does not account for compounding within the year.
Interest calculated on the initial principal and also on the accumulated interest from previous periods. This creates exponential growth over time, often called "interest on interest."
Interest calculated only on the principal amount, not on accumulated interest. Less common in savings accounts but used for some bonds and short-term deposits.
How often interest is calculated and added to your account balance. Common frequencies include daily, monthly, quarterly, or annually. More frequent compounding results in higher returns.
The original amount of money deposited or invested, before any interest is earned. The base amount on which interest is calculated.
The percentage of principal charged or paid over a specific period, typically expressed annually. For savings accounts, it's the rate at which your money grows.
The earnings generated and realized on an investment over a particular period, expressed as a percentage. In savings contexts, essentially synonymous with APY.
Another term for APY - the actual annual return on an investment after accounting for compound interest.
The stated interest rate before adjusting for compounding or inflation. Similar to APR.
The interest rate adjusted for inflation, showing the true purchasing power growth of your savings.
An interest rate that remains constant for the entire term of a financial product. Common in CDs and some savings accounts.
An interest rate that can change over time based on market conditions or benchmark rates like the federal funds rate. Most savings accounts have variable rates.
An interest rate structure where higher account balances earn higher rates. Different balance ranges (tiers) receive different APYs.
A temporarily higher interest rate offered to attract new customers or encourage certain behaviors. Typically reverts to a standard rate after a set period.
The amount of money an investment or savings account will grow to at a specific point in the future, considering interest earned.
The current value of a future amount of money, accounting for a specific rate of return. Used to determine how much to save today to reach a future goal.
The total amount of interest earned before any fees, taxes, or deductions are taken out.
The interest earned after taxes and fees are deducted from gross interest.
The rate at which the general level of prices for goods and services rises, reducing purchasing power. Your savings need to grow faster than inflation to maintain real value.
A deposit account held at a bank or credit union that earns interest and allows easy access to funds while maintaining separate from daily spending money.
A savings account that offers significantly higher interest rates than traditional savings accounts, typically offered by online banks. Rates can be 10-20x higher than the national average.
A savings product that holds a fixed amount of money for a fixed period of time (term) in exchange for a higher interest rate. Early withdrawal typically results in penalties.
A savings account that typically offers higher interest rates but may require higher minimum balances. Often includes check-writing privileges and debit card access.
A deposit account that allows frequent withdrawals and unlimited transactions, designed for daily spending. Typically earns little to no interest.
A bank account shared by two or more individuals, where each person has equal access and ownership rights. Common for couples or business partners.
A savings or investment account managed by an adult (custodian) on behalf of a minor until they reach legal age. Assets irrevocably belong to the minor.
A savings account designated for unexpected expenses or financial emergencies. Financial experts typically recommend 3-6 months of living expenses.
A savings account designed for businesses, often with higher balance requirements and different fee structures than personal accounts.
A savings account designed for students, typically with lower or no minimum balance requirements and reduced fees.
A savings account for minors, often with parental oversight, designed to teach financial literacy. May have educational features and no fees.
An account that automatically transfers (sweeps) excess funds from checking to savings or investment accounts to maximize interest earnings.
A hybrid account offered by brokerages that combines features of checking and savings accounts with investment capabilities.
A bank account that holds funds in a currency other than your home currency, used for international transactions or currency speculation.
A savings account or deposit that must be held for a specific term to avoid penalties. CDs are the most common type of time deposit.
An Individual Retirement Account where contributions may be tax-deductible, and earnings grow tax-deferred until withdrawal in retirement. Withdrawals are taxed as ordinary income.
An Individual Retirement Account funded with after-tax dollars. Earnings and withdrawals in retirement are tax-free if certain conditions are met.
An employer-sponsored retirement plan that allows employees to contribute pre-tax dollars. Employers often match contributions up to a certain percentage.
An employer-sponsored retirement account funded with after-tax contributions, with tax-free growth and withdrawals in retirement.
A retirement plan similar to a 401(k) but offered by public schools, nonprofits, and certain religious organizations.
A deferred compensation retirement plan for state and local government employees and some nonprofit workers, with unique early withdrawal rules.
Simplified Employee Pension IRA designed for self-employed individuals and small business owners. Allows higher contribution limits than traditional IRAs.
Savings Incentive Match Plan for Employees - a retirement plan for small businesses with fewer than 100 employees. Requires employer contributions.
A tax-advantaged savings plan designed for education expenses. Earnings grow tax-free when used for qualified educational costs.
Coverdell Education Savings Account - a tax-advantaged account for education expenses (K-12 and college) with a $2,000 annual contribution limit.
A tax-advantaged account for medical expenses, available to those with high-deductible health plans. Contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free.
An employer-sponsored account for medical or dependent care expenses funded with pre-tax dollars. Often has "use-it-or-lose-it" rules.
Short-term U.S. government securities with maturities of one year or less. Sold at a discount and redeemed at face value.
Medium-term U.S. government securities with maturities of 2, 3, 5, 7, or 10 years. Pay interest semi-annually.
Long-term U.S. government securities with maturities of 20 or 30 years. Pay interest semi-annually.
U.S. savings bonds that protect against inflation by combining a fixed rate with an inflation rate that adjusts semi-annually.
U.S. savings bonds with a fixed rate that are guaranteed to double in value after 20 years.
Bonds issued by state or local governments. Interest is often exempt from federal and sometimes state taxes, making them attractive to high-income investors.
Debt securities issued by corporations to raise capital. Offer higher yields than government bonds but carry more risk.
An investment strategy where you purchase bonds or CDs with staggered maturity dates to balance liquidity and higher yields.
An account at a financial institution that allows you to buy and sell investments like stocks, bonds, mutual funds, and ETFs.
A mutual fund that invests in short-term, low-risk securities. Not FDIC-insured but considered very safe. Often used as a cash alternative.
A CD that allows you to request a rate increase once (or sometimes multiple times) during the term if rates rise.
A CD where the interest rate automatically increases at predetermined intervals during the term.
A CD that allows you to withdraw funds before maturity without paying an early withdrawal penalty, typically after a short initial period.
A CD requiring a large minimum deposit (typically $100,000+) that offers higher interest rates than standard CDs.
A certificate of deposit held within a Traditional or Roth IRA, combining CD safety with tax advantages.
A CD that the bank can "call" (terminate) before maturity if interest rates fall, returning your principal plus earned interest.
A CD purchased through a brokerage rather than directly from a bank. Can be sold before maturity on a secondary market but not FDIC-insured at the brokerage level.
A CD that allows you to make additional deposits after the initial deposit, unlike standard CDs.
A recurring charge some banks impose for maintaining an account. Often waived if you meet certain requirements like minimum balance or direct deposit.
The lowest amount of money that must be maintained in an account to avoid fees or maintain certain benefits like higher interest rates.
A fee charged when you withdraw money from a time-deposit account (like a CD) before the maturity date. Penalties typically equal several months of interest.
A charge for using an out-of-network ATM. Can include both the ATM owner's fee and your bank's fee.
A fee charged when a transaction exceeds your available balance. Can be $30-$35 per transaction.
A fee charged when there isn't enough money in your account to cover a transaction and the bank declines it.
A service that links a backup account (savings or credit) to cover overdrafts, typically with a smaller transfer fee instead of a full overdraft fee.
A charge for electronically transferring money, especially for international or same-day transfers. Can range from $15-$50.
A fee charged on purchases or withdrawals made in foreign currencies or from foreign banks, typically 1-3% of the transaction.
A fee some banks charge if you close an account shortly after opening it, typically within 90-180 days.
A monthly charge for receiving paper statements by mail instead of electronic statements.
A fee charged for exceeding the transaction limit on savings accounts (historically six per month under Regulation D).
A financial institution that operates primarily or exclusively online without physical branches. Typically offers higher interest rates due to lower overhead costs.
A digital-only bank that operates exclusively through mobile apps and websites, often with innovative features and no physical branches.
Banking services accessed through smartphone apps, allowing you to check balances, transfer money, deposit checks, and pay bills.
An electronic application that stores payment information and passwords for online purchases and in-person transactions (e.g., Apple Pay, Google Pay).
Automated Clearing House transfer - an electronic network for processing batches of debit and credit transactions. Takes 1-3 business days, typically free.
Direct money transfer between individuals using apps like Zelle, Venmo, or Cash App, bypassing traditional banking channels.
A P2P payment service integrated into many banking apps for instant transfers between bank accounts.
An electronic transfer of funds directly into a bank account, commonly used for paychecks, government benefits, or pension payments.
A feature that allows you to deposit checks by taking photos with your smartphone camera through a banking app.
A scheduled, recurring movement of funds from one account to another without manual intervention. Also called auto-save or automatic savings.
A transfer method that moves money between accounts in seconds or minutes, often with a small fee, instead of 1-3 business days.
A system where banks allow third-party financial service providers secure access to customer data through APIs, enabling innovative financial products.
Application Programming Interface banking - technology that allows different financial applications to communicate and share data securely.
An automated investment platform that uses algorithms to create and manage investment portfolios with minimal human intervention.
An account that pays interest on cryptocurrency holdings, though not FDIC-insured and carrying higher risk than traditional savings.
Federal Deposit Insurance Corporation protection that guarantees bank deposits up to $250,000 per depositor, per insured bank, for each account ownership category.
National Credit Union Administration insurance that protects credit union deposits up to $250,000, equivalent to FDIC insurance for credit unions.
Federal Reserve regulation that historically limited certain withdrawals from savings accounts to six per month. Enforcement was suspended in 2020.
Federal regulation that protects consumers in electronic fund transfers, including ATM transactions, debit card purchases, and ACH transfers.
Federal law requiring financial institutions to provide clear disclosure of rates, fees, and terms for deposit accounts.
Comprehensive financial reform legislation passed after the 2008 crisis, including enhanced consumer protections and banking regulations.
Law requiring financial institutions to report certain transactions and maintain records to prevent money laundering and financial crimes.
Banking regulations requiring financial institutions to verify customer identities and understand their financial activities to prevent fraud.
Laws and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.
The process by which dormant or unclaimed bank account funds are turned over to the state after a period of inactivity (typically 3-5 years).
The central banking system of the United States that sets monetary policy and influences interest rates nationwide.
The interest rate at which banks lend money to each other overnight, set by the Federal Reserve. Influences all other interest rates including savings accounts.
The percentage of deposits that banks must hold in reserve and cannot lend out, set by the Federal Reserve (currently 0% as of 2020).
One hundredth of a percentage point (0.01%). Used to describe small changes in interest rates.
The difference between two interest rates, such as what a bank pays depositors versus what it charges borrowers.
A graph showing interest rates across different maturity lengths. Normal curves show higher rates for longer terms; inverted curves may signal recession.
The practice of comparing interest rates across multiple banks to find the best savings or CD rates.
The potential benefit you miss out on when choosing one option over another. In savings, it's what you could have earned elsewhere.
The principle that money available today is worth more than the same amount in the future due to its earning potential.
The theoretical rate of return on an investment with zero risk, typically represented by U.S. Treasury securities.
A standard interest rate used as a reference point for other rates, such as the federal funds rate or SOFR (Secured Overnight Financing Rate).
How quickly and easily an asset can be converted to cash without losing value. Savings accounts are highly liquid; CDs are less liquid.
An investment strategy where you divide savings across multiple CDs or bonds with different maturity dates to balance access and higher rates.
The practice of spreading money across different accounts, institutions, or investment types to reduce risk.
Understanding how the $250,000 insurance limit applies across different account categories (individual, joint, retirement, trust) to maximize protection.
The total amount of money currently in your savings or checking account, including all deposits, interest earned, and minus any withdrawals or fees.
The amount you can withdraw or spend immediately, which may differ from your account balance due to pending transactions or holds.
Money added to a bank account via cash, check, electronic transfer, direct deposit, or mobile deposit.
The removal of money from a bank account via ATM, check, transfer, or in-person at a branch.
A monthly or quarterly document detailing all transactions, deposits, withdrawals, fees, and interest earned during the statement period.
The time frame covered by a bank statement, typically one month.
The date when a CD or other time-deposit account reaches the end of its term and you can withdraw funds without penalty.
The automatic continuation of a CD or term deposit for another term period when it reaches maturity, often at the current prevailing rate.
A set amount of time after maturity during which you can withdraw CD funds or change terms without starting a new CD.
A person designated to receive account funds upon the account holder's death.
An account designation that allows you to name beneficiaries who will receive funds directly upon your death without going through probate.
Similar to POD but typically used for brokerage accounts and investment assets.
Legal authorization allowing someone to act on your behalf in financial matters, including managing bank accounts.
A person or institution that manages assets in a trust account on behalf of beneficiaries.
An adult who manages a minor's financial account until they reach legal age.
The person(s) who own and have legal rights to a bank account.
A member-owned financial cooperative that provides banking services. Credit unions typically offer competitive rates because they're not-for-profit.
A specific financial target you're working toward, with a defined amount and timeline, such as a down payment or vacation fund.