Financial Terms Glossary

 

At River Valley Credit Union, our primary goal is to positively impact the financial wellbeing of our members. We are dedicated to understanding and adapting to their evolving needs, always striving to surpass their expectations. When engaging with our members, we are committed to providing them with timely and valuable information, as well as educational resources to empower their financial journey.

 

We want to ensure you're fully equipped to navigate the world of finance with ease. That's why we've put together a handy list of financial terms provided by the Consumer Financial Protection Bureau to help you out. Let's make your financial journey move enjoyable and less confusing. 

 

 Don't hesitate to check out the Consumer Financial Protection Bureau's website for a comprehensive Financial Terms Glossary. It's a great resource for diving deeper into the world of finance.

 

• APR (Annual Percentage Yield)

  • The cost of borrowing money on a yearly basis, expressed as a percentage rate. 

 

• Asset

  • An item with economic value, such as stock or real estate. 

 

• Beneficiary

  • Someone or something named to receive proceeds or benefits. In the insurance context, it's the person, charity, trust, or estate designated by the policy holder to receive the policy's benefits or payments.

 

• Bond

  • A type of debt. When you buy a bond, you're lending to the issuer, which may be a government, municipality, or corporation. The issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal - also known as the bond's face value or par value - when the bond "matures," or comes due after a set period. 

 

• Certificate of Deposit (CD)

  • A savings tool from a bank or credit union that has a fixed maturity date and a fixed interest rate. 

 

• Collateral

  • An asset that secures a loan or other debt that a lender can take if you don't repay the money you borrow. For example, if you get a home loan, the bank's collateral is typically your house. 

 

• Credit

  • Borrowing money, or having the right to borrow money, to buy something. Usually, it means you're using a credit card, but it might also mean that you got a loan.

 

• Debt

  • Money you owe another person or a business. 

 

• Emergency Fund

  • A cash reserve that's specifically set aside for unplanned expenses or financial emergencies. Some common examples include car repairs, home repairs, medical bills, or a loss of income. 

 

• Fraud

  • An illegal act that occurs when people try to trick you out of your personal information and your money.

 

• Imposter Scam

  • An attempt to get you to send money by pretending to be someone you know or trust, like a sheriff; local, state, or federal government employee; a family member; or charity organization. 

 

• Interest Rate

  • A percentage of a sum borrowed that is charged by a lender or merchant for letting you use its money. A bank or credit union may also pay you an interest rate if you deposit money in certain types of accounts. 

 

• Maturity Date

  • The date than an investor's investment is to be paid back in full in accordance with its agreement. A certificate of deposit (CD) contains a maturity date provision obligating the financial institution to repay an investor sum invested plus interest on a specified date. 

 

• Money Market Deposit Account

  • Federally insured account at a bank or credit union that offers a higher rate of interest than a savings account, allows for a limited number of transactions monthly, and may require a minimum deposit or minimum account balance. 

 

• Principal

  • In the lending context, principal is the amount of money that you originally received from the lender and agreed to pay back on the loan with interest. In the investment context, it is the amount of money you contribute with the expectation of receiving income. 

 

 

Happy learning and exploring the world of finance!

 

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Isabel Kinzie

Marketing Specialist

 

 

Sourced: Financial Terms Glossary | Consumer Financial Protection Bureau (consumerfinance.gov)