Accrued Interest
Interest on an account that has been accumulated but not yet paid.
Amortisation
Gradual reduction of a debt by means of payments sufficient to pay principal and thereby, liquidate the debt.
APR
Annual Percentage Rate is the rate of interest computed for a one-year period.
Asset
Anything owned by a business or by an individual that has commercial value.
Audit
Inspection of accounting records and other procedures to check on their accuracy, completeness, and reliability.
Automated Clearing House (ACH)
A facility that processes electronic debit and credit transfer, such as Direct Deposits or Automatic Payments.
Automated Teller Machine (ATM)
An electronic device through which customers may withdraw cash, make deposits to accounts by cash or cheque, and perform other account transactions.
Average Daily Balance
The sum of each daily balance of an account divided by the number of days in a specified period.
Basis Points
A measure for small differences in yields - 100 basis points equal 1%.
Bear Market
A period of generally declining market prices.
Beneficiary
A person who receives, or is designated to receive, something - such as a person who is named to benefit from the proceeds of a trust or an estate.
Bull Market
A period of generally increasing market prices.
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Commercial Loans
A loan contract between a business and a lending institution, either secured or unsecured, providing for the advancement of funds.
Compound Interest
Interest computed on both principal and accrued interest.
Disbursement
A payout of funds.
Draft
An instrument drawn by one party ordering a second party to pay a certain sum of money to a designated third party. A cheque is the most common form of draft.
Endorsement
The information placed on the back of the cheque by the payee, the depository bank, subsequent collecting banks, returning banks, and the paying bank; an authorized stamp, or a company/corporation stamp representing to whom the cheque is made payable.
Exchange Rate
The price of one nation's currency expressed in terms of another nation's currency.
Fiduciary
Trustee; person or financial institution serving in a financial capacity on behalf of another, especially when holding funds in trust for the other party.
Fixed Rate
The rate of interest that remains constant during the fixed term of the investment or loan.
Foreclosure
Legal process by which a mortgagor of real or personal property is deprived of his interest; the usual method is sale of property, the proceeds of which go to satisfy the debt.
Garnishment
A legal procedure whereby the property, wages, money, or other assets of a debtor are used to satisfy the debt.
Guardian
Court appointed person charged with the duty to care for the health and well-being, but not the property, of a minor or incapacitated person.
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Instalment Loan
Agreement between a customer and a lending institution, whereby the customer receives a sum of money and pays it back in monthly instalments.
Instrument
Term used to describe a negotiable item (cheque, money order, bond coupon, etc.).
Insufficient Funds
Term used to express the fact that the customer's account does not contain enough money to cover a cheque or withdrawal ticket presented for payment; also referred to as non-sufficient funds (NSF).
Interest
Money paid in return for the use of money.
Land Contract
Agreement between two parties involving the exchange of property (usually a home) and money, which is ordinarily paid in regular instalments.
Late Charge
A fee required in connection with any payment on a loan or other obligation that is not made when due.
Lien
The right to hold any property given as a pledge or security until the debt it secures is paid. To constitute a lien, the debt must be enforceable in equity or law (e.g., a mortgage).
Line of Credit
A type of loan in which a borrower receives disbursements as needed, up to a specified maximum amount.
Loan
A contract between two parties whereby a lender agrees to give funds to a borrower. The loan agreement specifies terms for repayment of the borrowed funds.
Maturity Date
The date on which a certificate of deposit, bond or other instrument comes due.
Minimum Balance
Minimum amount required to maintain an account or to maintain a free account.
Mortgagee
One who borrows money, securing repayment by giving a mortgage or deed of trust on real estate.
Mortgage Loan
Special type of instalment loan involving the purchase of real estate and allowing for regular payments of interest and principal. Typically, a mortgage loan involves a larger sum of money and a longer repayment period than an ordinary instalment loan.
Mortgagor
Any individual or business that extends credit secured by real estate.
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Negotiability
Characteristic of certain bank instruments, that permit them to be transferred from one party to another.
Notary Public
A public official who attests or certifies writings to make the signatures legally authentic.
Overdraft
The amount by which a cheque or other order for payment exceeds the funds on deposit.
Payee
The individual or company/corporation to which a cheque is made payable.
Post-Dated Cheque
A cheque that is dated in the future. Such a cheque is not considered negotiable until that date arrives.
Power of Attorney
A document that, when signed by a person, gives legal authority to a second person to act on behalf of the first person.
Prime Rate
Interest rate charged by major banks to their best, credit-worthy, commercial loan customers.
Principal
Original amount of loan, or the total current amount of debt minus any interest.
Qualified Endorsement
An endorsement containing the words "without recourse" or similar language intended to limit the endorser's liability.
Refinancing
The repayment of an existing debt from the proceeds of new borrowing.
Restrictive Endorsement
An endorsement that limits future actions on an item; the most common example is "For Deposit Only."
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Safe Deposit Box
Bank service that enables customers to store valuables and possessions in a secure personal "mini-vault" located at the bank.
Safekeeping
A service rendered by banks where securities and valuables are protected in the bank's vault for the customer for a fee.
Security
(1) Any investment instrument, such as a bond or stock.
(2) Property pledged as collateral for loans.
Signature Card
Card that is signed by customers when opening an account.
Signature Guarantee
The signature of a bank official that guarantees the signature of a customer, generally used on stocks and marketable securities.
Simple Interest
Interest computed on principal balance only, and not on accrued interest.
Special Endorsement
An endorsement that names the party to whom an item is being transferred.
Statement
A record of all transactions made on an account over a specified period of time. Account statements are distributed on a regular basis.
Stop Payment
An order issued by a customer instructing the bank to refuse payment on one or more cheques they have written.
Term
The length of a maturity of a loan, deposit, bond, etc.
Title
Legal evidence of the ownership of property.
Trust
An arrangement established by declaration, will, or by order of a court, under which one party holds legal title to property belonging to another party, with a specific benefit in mind.
Trustee
One who manages assets held "in trust" for the benefit of another.
Variable Rate
The rate of interest that fluctuates during the life of an investment or loan.
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