Banking terms Assignment Help

Commonly used banking terms in finance:

1. Account Balance: The amount of money in a bank account at a specific point in time.

2. Interest Rate: The percentage at which a bank pays interest on deposits or charges interest on loans.

3. Deposit: Funds placed into a bank account, often for safekeeping and potential growth through interest.

4. Withdrawal: The act of taking money out of a bank account, usually through a bank withdrawal slip, ATM, or electronic transfer.

5. Loan: A sum of money lent by a bank or financial institution to a borrower, usually with the expectation of repayment with interest.

6. Interest: The cost of borrowing money, or the earnings from lending money, expressed as a percentage of the principal amount.

7. Overdraft: When a bank account's balance goes below zero, and the account holder borrows money from the bank to cover the negative balance.

8. Credit Card: A payment card that allows the holder to borrow funds to make purchases and pay them back with interest if not paid in full by the due date.

9. Debit Card: A payment card that deducts money directly from a bank account to pay for purchases.

10. ATM (Automated Teller Machine): An electronic banking outlet that allows customers to complete basic transactions, such as withdrawing cash or checking account balances, without the need for a bank teller.

11. Online Banking: The use of the internet to access and manage bank accounts, including checking balances, transferring funds, and paying bills.

12. Checking Account: A type of bank account that allows frequent withdrawals and payments, often via checks or debit cards.

13. Savings Account: A bank account that earns interest on deposited funds while allowing limited withdrawals. It's typically used for saving money rather than frequent transactions.

14. Certificate of Deposit (CD): A time-bound savings instrument with a fixed interest rate and maturity date. The money is locked in for a specified period.

15. Mortgage: A loan used to purchase real estate, where the property itself serves as collateral for the loan.

16. Collateral: An asset or property offered by a borrower to a lender as security for a loan. It can be seized by the lender if the borrower fails to repay the loan.

17. Principal: The initial amount of money borrowed or invested, not including interest.

18. APR (Annual Percentage Rate): The annualized interest rate, including both the stated interest rate and any additional fees or costs associated with a loan or credit card.

19. Bank Statement: A periodic document sent by a bank to an account holder, summarizing all transactions and account activity during a specific period.

20. Wire Transfer: A method of electronically transferring funds from one bank account to another.

These are just a few examples of the many terms used in banking and finance.