Financial Dictionary

The 183-day rule refers to criteria used by most countries to identify if someone should be evaluated as a resident for taxation purposes

The 52-week high/low is the highest and lowest price at which a stock has traded during the previous 52 weeks (approximately one year)

ACH refers to the electronic payment network responsible for moving money between bank accounts in the United States

APR is the fees you pay each year for the borrowed money, in terms of a percentage

APY is the earnings you receive for money deposits in a year, in terms of a percentage

Annualized premium is the amount of insurance premium paid in a year. An insurance policy's premium amount can be paid monthly, quarterly, and annually

The assessed value is the dollar valuation attached to a property for calculating its tax rates or while selling it

The person to whom the payment is transferred from your bank account or from an insurance policy

A blue chip stock refers to a large company with a long-standing reputation and stable financials

A bank identification number (BIN) represents the first four to six digits on a credit card useful in identifying the bank issuing the card

A cash advance is the service of cash withdrawal from the bank's ATM or branch against your credit card's line of credit. This service attracts a high interest fee.

A checking account is a type of bank account that allows you to take money out at any time using your cheque or debit card for everyday transactions.

A cosigner is someone who signs a loan agreement along with a primary borrower. That individual becomes liable to repay the loan amount if the primary borrower cannot.

A Collateral is an asset, such as a property, a car, jewelry pledged by a borrower as a security against a loan request to the lender.

A credit score is a three-digit number designed on a person's repayment history to show a person's ability to repay a debt.

The amount of money an insured person has to pay for an insurance claim before an insurance plan starts paying.

A special type of insurance, under which deposit holders in a bank are guaranteed against loss in the event of a bank failure to pay back its depositors.

A dividend is a distribution of earnings by the company to its shareholders in the form of cash or stock.

An amount paid by a borrower to a lender at a specified date each calendar month to clear off an outstanding loan.

ESOP is an employee benefit plan that offers the stock of the company at a low or no additional cost to encourage ownership in the company's future.

ETFs or exchange traded funds are similar to company stocks that are sold on an exchange but it is usually a basket of company stocks and bonds.

FDIC is an independent US government corporation insuring deposits in the U.S. banks in the event of bank failures.

FICO score for a borrower varies from 300 to 850, and is used by lenders to determine how likely you will repay a loan.

A grace period is an extra time after the due date for completing the payment without additional fees or a penalty.

A guarantor is an individual who promises to pay a borrower's debt to lender in the event of borrower defaulting on the loan.

Index fund is a type of mutual fund that consists of multiple company stocks to track popular market indices such as the S&P 500, Nasdaq 100.

IRA is a savings account that individuals can open to save for the long term, potentially for retirement and comes with tax advantages.

IRS is a US federal agency accountable for collection of taxes and enforcement of tax laws.

IPO refers to the process where a private company goes to the public by selling its company shares.

The interest rate used in lending between banks on the London interbank market.  Commonly used as a reference for setting the interest rate on loans by individuals and businesses.

The loan-to-value (LTV) ratio is used by lenders to determine the amount of loan that can be borrowed against the value of property.

Market Cap is the total market value of a company's shares measured in a dollar amount. Usually used to evaluate the market value of companies.

MOU is a document describing the broad outlines of an agreement that two or more parties have reached.

Mortgage is a loan provided by a financial institution to an individual to purchase a home, land, or other types of real estate.

A mutual fund is a professionally-managed investment fund that consists of multiple company stocks, bonds and other assets.

The total wealth of an individual after taking into account all financial assets minus liabilities or obligations.

A collection of various assets such as company stocks, mutual funds, ETFs, bonds, cash etc.

A process where an exiting loan is replaced with a new loan usually at a lower rate of interest.

REITs are companies that hold or finance income-producing real estate properties.

ROI is a financial metric used to measure the gains from an investment.

Roth 401(k) refers to a post-tax retirement savings account sponsored by your employer.

S&P 500 is a stock market index that tracks 500 largest companies on the US stock market exchanges such as NYSE and Nasdaq.

A process by used financial institution to determine your credit worthiness by evaluating your income, debt, assets, and credit score etc.

A loan given purely based on borrower's creditworthiness without any collateral as security for loan.

A process where each employee will vest, or own, a certain percentage of the stock options offered by their company.

W-8 are IRS forms used by foreign individuals and businesses to claim that they qualify for a lower rate of tax withholding.

XRP is a cryptocurrency token used on the Ripple network to facilitate money transfers between different currencies.

YTD refers to the time period from the first day of the current calendar year or fiscal year up to the current date

A bank account where the customer need not maintain a certain monthly average balance (MAB) or where MAB is zero