Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
Annual Percentage Yield (APY)
The percentage, required by Truth in Savings regulations, to be disclosed on interest-bearing deposit accounts that reflects the total interest to be earned based on an institution’s compounding method, assuming funds remain in the account for a 365-day year.
Average annual yield
The average yield per year over the life of the investment, assuming all principal and interest remain on deposit until maturity.
An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers. A bank must be chartered and meet certain criteria. Chartering is done by the Comptroller of the Currency for national banks, by the Federal Reserve System for state member banks, by the Federal Deposit Insurance Corporation (FDIC) for insured banks, and by state regulatory agencies. Also referred to as a commercial bank.
Bank holding company
A company that owns or controls one or more banks or companies associated with banking such as leasing companies, credit companies, etc.
It is usually identified by the word Bancorp or Bancshares in the name. The Federal Reserve Board of Governors regulates all bank holding companies.
Bank Secrecy Act
The Bank Secrecy Act was designed to help identify the source, volume and movement of currency and other monetary instruments transported into or out of the U.S. or deposited in financial institutions.
An electronic payment system for the transfer of money between banks. The payments are conducted on the Federal Reserve System's federal wire (Fed Wire) network. Also known as a wire transfer.
Break the buck
When the price of a share in a money market mutual fund dips below the $1-per-share price it is supposed to hold, the fund is said to "break the buck." This is bad for investors because they might lose principal.
The profit that an owner makes when selling real estate or other property.
Comptroller of the Currency
An officer of the Treasury Department who is responsible for chartering national banks and has primary supervisory authority over them.