Remainder of your income after you subtract expenses such as student loan interest from your gross income. Finding your AGI is one step in the process of figuring how much income tax you owe.
Affinity card
A credit card that earns benefits when you make purchases. For example, you may earn a frequent flier mile for every dollar that you charge on an airline affinity card.
Allowances
Claims on IRS Form W-4 that let your employer figure out how much of your gross income to withhold to prepay your federal income taxes. You can take one allowance for yourself, a second allowance if you work two jobs, and an allowance for each dependent.
AMEX
American Stock Exchange, one of three major US stock markets, along with the NYSE and NASDAQ.
Annual percent return
The amount earned on an investment, in percentage terms, divided by the number of years you've owned the investment. It tells you how much, on average, your investment has increased or decreased in value each year you've owned it.
Annual return
is how much your investment increases or decreases in value over one year. It is usually reported as a percentage of what you invested, or your annual percent return.
APR
stands for annual percentage rate. It's the most accurate way to measure what you're paying each year as a finance charge on a loan or for a credit card. It is also the most accurate measure of what you earn in interest each year on a savings account or certificate of deposit (CD).
Assets
are valuable things that you own, such as the money in your savings accounts and your investments.
Audit
is an Internal Revenue Service (IRS) review of your federal income tax return. If you're audited, you may have to explain or prove the information you supplied on your tax return.
Balance
is an amount of money in one of your financial accounts. A credit card balance is the amount of money that you owe a credit card company. If you carry a balance from month to month instead of paying your whole bill, then you are in debt to the credit card company. A bank balance is the amount of money in your bank account.
Bank checks (Cashier's checks)
are checks a bank writes from its own account, guaranteeing that the check will be paid when it's deposited. To get a bank check, you give the bank the amount of the check, plus a fee. The bank gives you a printed and signed check that you send or deliver to the payee.
Benefits
are job perks that employers offer to attract and retain employees. Benefits include paid vacation, paid health insurance, and more.
Bonds
are investments issued, or sold, by corporations and governments. When you buy a bond, you're actually loaning the issuer your principal, which is the purchase price. The issuer pays you interest for the use of the money with a promise to repay your principal at a specific time.
Bonus
is a lump-sum payment that an employer makes to an employee as a reward for good work, or sometimes, as a share of the company's profits.
Bouncing a check
means there isn't enough money in your checking account to cover the amount of a check you've written at the time the payee deposits it. The formal term for bouncing a check is overdrawing your account.
Buy-and-hold
strategy means purchasing investments that you expect to keep for a long time.
Buy-and-sell
strategy means making investments that you plan to sell when the investment's value increases or decreases by a certain percentage.
Cancelled checks
are evidence that money transfers have been completed. A check is cancelled, or stamped paid, when the payee deposits it. Your bank may return your cancelled checks to you, or provide copies of them, with your monthly statement.
Cap
is a limit. It may refer to the largest amount of money you're permitted to contribute each year to a retirement account. It can also refer to the largest amount that you're required to pay in interest or Social Security taxes.
Capital gains
are profits from selling investments for more than you paid for them.
Cash advances
are cash loans that a credit card company makes to its customers, usually through an ATM. You must repay the loan plus interest.
Cash investments (Cash equivalents)
are insured or secure investments that are very liquid, such as CDs and short-term US government bills.
Certificates of Deposit (CDs)
are insured investments offered by banks and credit unions. Your money earns interest in a CD, but you must agree not to withdraw the money for a certain term, or period of time.
Charge cards
are similar to, but not the same as, credit cards. If you make purchases with a charge card – such as American Express – you have to pay off your whole bill each month. You can't carry a balance from month to month the way you can with a credit card.
Checking accounts
are bank accounts where you hold money that you expect to spend in the near future. You often get an ATM card with a checking account.
Collateral
is valuable property – such as your house or car – that you pledge to a lender to guarantee that you'll repay your loan. If you fail to repay, the lender can take your collateral.
Commission
is an amount that's paid to a salesperson in addition to regular salary, based on the value of the products or services the person sells. You may also pay a commission, or percentage of the sales price, when you buy stocks, mutual funds, and other investments.
Compounding
means accumulating earnings on your previous interest earnings. If you reinvest interest you earn in a bank account that pays compound interest, you'll earn interest on the interest.
Consumer Price Index
(CPI)
is a measure of inflation, based on changes in the prices of everyday goods and services. It's figured every month, and those numbers are used to determine the annual inflation rate.
Cosigning
a loan means you agree to cover the borrower's payments if he or she cannot or does not pay.
Cost of living
is a term used to describe the expenses of day-to-day life, such as housing, transportation, and groceries.
Credit
is the ability to borrow money that you promise to repay. The most common uses of credit are paying for something with a credit card, taking a loan, or getting a cash advance.
Credit cards
allow you to charge purchases or take cash advances with the understanding that you will pay back the money. If you make those payments over time, you agree to pay a finance charge on the amount you still owe.
Credit check
means getting a copy of a credit report. Lenders – such as credit card and loan companies – usually do credit checks on anyone who applies for credit. Employers and landlords may also do credit checks.
Credit history
includes all the ways that you have used credit, including how much you've owed and whether you've repaid on time.
Credit limit
is the amount that you can borrow from your credit card company or line of credit. Once you reach your credit limit, you must repay some of your balance before you can charge purchases again.
Credit rating (Credit score)
is a number – usually between 300 and 950 – that companies use to sum up your credit history. Usually, the higher the number, the better your score and the better your chance of being approved for additional credit.
Credit report
is an official summary of your credit history.
Credit risk
is based on a lender's evaluation of how likely you are to repay what you borrow, based on your credit history. If a lender thinks you're a high credit risk, you may have a hard time getting credit.
Credit unions
are nonprofit financial institutions. They offer banking services – such as checking, loans, and credit cards – to their members, at a lower cost than a bank.
Creditors
are lenders. They supply loans, credit cards, and lines of credit, and expect to be repaid with interest.
Debit cards
let you pay for purchases directly from your bank account. When you use your debit card, the money is taken immediately from your account and credited to the seller's account.
Debt
is an obligation to repay money you've borrowed.
Deductible IRAs
are individual retirement accounts that offer extra tax savings, since the principal you invest is tax deductible. You qualify for a deductible IRA based on your income and other factors.
Defaulting
on a loan means failing to repay.
Dependents
are people who don't support themselves. Children under 18 are usually dependents of their parents or guardians.
Direct deposit
is a payment system that allows money to be added directly to a checking, savings, or investment account, often from an employer.
Distribution
An amount a mutual fund pays its shareholders. It may come from income that the fund gets in dividends or interest, or from selling investments for more than the fund paid to buy them.
Diversifying
Buying different kinds of investments in different sectors of the economy. Diversifying can help protect the value of your investment portfolio when one area of the economy weakens.
Dividends
Investment income from stock that are paid out of the company's earnings. You can get a check for the dividend amount, or you may be able to reinvest your dividends if the company has a dividend reinvestment plan (DRIP).
Down payment
The portion of a purchase price that you must have available in cash when you're taking a loan to make a major purchase. You pay the down payment directly to the seller.
Dividend Reinvestment Plan (DRIP)
Automatically reinvests your stock dividends to buy more shares of that stock. Participating in a DRIP is optional.
Earned income
is money you get for working, including your salary, wages, tips, and commissions.
Earned Income Credit (EIC)
provides tax relief for people whose income is low enough to qualify for the credit.
Effective interest rate
is the percentage of principal you earn on an investment. If the interest is compounded, the effective rate is higher than the nominal, or stated, rate.
Employment taxes
are taxes that businesses pay, based on how many employees they have and how much their employees earn.
Entrepreneurs
are people who create and manage their own businesses. Successful entrepreneurs can transform their ideas for making money into profitable companies. Sometimes, their ideas even change the way other businesses operate.
Equity
means ownership. When you buy stock, for example, you own a very small part of the company that issued it, and you have the right – along with other shareholders – to vote for its board of directors and on some of its business decisions.
Excise taxes
are state or federal taxes on certain goods, including cigarettes, alcohol, gasoline, and certain high-priced items.
FDIC
stands for Federal Deposit Insurance Corporation. The FDIC insures member bank accounts for up to $100,000.
Filing status
is how you must describe yourself when you pay your federal income taxes, such as whether you're single, married, or widowed. Your filing status affects the tax rates you pay and the tax breaks you're eligible for.
Finance charge
is the amount that you pay in interest when you borrow money using a credit card or loan. Your finance charge is your monthly interest rate multiplied by your unpaid balance.
Financing
means borrowing to pay for an item you can't or don't want to pay for in cash. When you get a car loan, you're financing your purchase of the car.
Fixed-income investments
, such as bonds, pay investors regular income on a regular schedule.
Fixed rate
means that the interest rate on a loan stays the same as long as you have the loan. The fixed rate on a credit card is also set, but the credit card issuer can change the rate if it notifies you and other cardholders.
Fixed term
describes investments that hold on to your principal for a certain amount of time. When the term ends, you get your money back, usually with interest. Bonds and CDs are fixed-term investments.
Flat taxes (Regressive taxes)
are taxes that everyone pays at the same rate, regardless of income or any other factor. Sales taxes are flat taxes.
Flexible spending plans
are optional employer-sponsored programs. You put pretax income in a flexible spending plan to pay for certain expenses, such as healthcare and childcare costs.
Grace period
is the period of time before your credit card company starts charging interest. Usually, your grace period lasts from the time that you buy something until the day the credit card payment that includes that charge is due. That means you never pay interest if you pay your whole bill each month.
Gross income
is your total income before any taxes are withheld or other money is subtracted.
Gross pay
is the total amount of income you get from working before taxes or other expenses are subtracted.
Guaranteed checks (Certified checks)
are checks that you write from your account that your bank guarantees will be paid. The bank freezes your account for the amount of the check, so you cannot spend it before the payee deposits the check.
Head of household
is the IRS's term for unmarried people with dependents. If you fit the definition of head of household, you owe less income tax than you would as a single filer with the same income.
Income taxes
require you to pay a percentage of what you earn to the government levying, or collecting, the tax. Federal, state, and some local governments levy income taxes.
Indexes
measure changes in a market or economy. For example, a stock index reports the changing performance of a group of stocks. Investors can use a stock index to gauge the overall health of the stock market.
Inflation
is the steady erosion of the value of the dollar, which means you can buy less with the same amount of money as the years go by.
Inflation rate
is the increase in the cost of goods or services, measured monthly and expressed as a percent of the previous month's cost. The annual inflation rate reflects 12 months' worth of inflation changes.
Inflation risk
is the possibility that your investment will not earn enough to keep up with increases in the rate of inflation. In that case, your investment will lose value, even if its price doesn't fall.
Initial rates (Introductory rates)
are interest rates that are lower than the usual cost of borrowing, and only apply for the first few months of your loan or credit agreement. These rates are designed to attract customers, who pay normal rates after the introductory rate expires.
Installment loans
are repaid over time in installments, which are payments you make regularly, typically once a month. When you pay the final installment, you've repaid the entire principal and interest.
Insured investments (Insured accounts)
are usually bank investments insured by the FDIC, such as CDs. Putting money in an insured account means there's very little chance that you'll lose the money you invest.
Interest
is a percentage of the principal that a borrower pays a lender. You pay interest on your loans and unpaid credit card charges, and you earn interest on bonds and some bank accounts.
Interest bearing
describes a bank account – usually a savings account – that pays you interest on your principal.
Interest income (Interest earnings)
is income you receive from bonds and some bank accounts. You may get a check for the amount of interest you earn on a bond. But bank interest is usually added to your account.
Interest rate (Rate of interest)
is the percentage of principal that you owe when you borrow, or that you earn when you invest. An interest rate can be fixed, which means it stays the same for the term of the loan or investment. Or it can be variable, which means it is changed from time to time, usually on a specific schedule.
Interest rates
across the US tend to move up or down together, since they all are related to a single interest rate, called the federal funds rate. That's the interest rate that banks charge each other to borrow money.
Internships
are jobs that help you learn about an industry or occupation. Usually, interns are unpaid, but some earn small salaries, or stipends.
Interview
is a meeting between an employer and a potential employee to discuss job opportunities. An interview is an opportunity for an employer to decide if the applicant is right for the job, and for a potential employee to figure out whether he or she would want to work for the employer.
Investing
means putting your money into assets, called investments, that may earn income and may increase in value. The most common investments are mutual funds, cash equivalent investments such as certificates of deposit (CDs), and securities such as stocks and bonds.
Investment accounts
are brokerage accounts that you use to buy stocks, bonds, and mutual funds. You can open a brokerage account with a brokerage firm, a bank, a mutual fund company, or another financial institution.
Investment income
is money that you earn from your investments. The two most common kinds of investment income are stock dividends and bond or bank account interest.
Investment risk
is the possibility that that you could lose some or all of your principal if an investment you've made loses value. For example, a stock may lose value if a competing company comes out with a better product or service.
IRA
stands for individual retirement account. Any earnings on your IRA investments are tax deferred, but you usually can't take the money out of the account without paying a penalty until you turn 59 1/2.
IRS
stands for Internal Revenue Service. The IRS is the government agency that oversees the US tax system. Its duties include providing tax forms and collecting taxes.
Issuers
are the corporations that sell, or issue, stocks or bonds, and the governments that sell bonds.
Itemizing deductions
means listing all the expenses you're allowed to subtract from your adjusted gross income instead of using an average figure called the standard deduction. You can itemize expenses for medical care, state and local income taxes, and interest on a home equity loan or mortgage.
Joint accounts
are bank or investment accounts shared by two people. If you and your parent have a joint account, you each have equal access to the money in the account.
Late payments
are received after the date a credit card bill or a loan payment is due. You may be charged a late payment fee as a penalty for late payments.
Levy
means to collect a tax.
Line of credit
is an example of revolving credit. With a line of credit, you can borrow money up to your credit limit, often by writing a check linked to your line of credit. Once you repay what you borrow, with interest, you can borrow the money again.
Liquid
investments are ones that you can sell easily when you need cash. True liquid investments are those you can sell without losing any of your principal, or the amount that you put into the investment.
Liquidity
is the measure of how easily you can turn an investment into cash.
Loan
is money that a bank or other financial institution lends you, with the understanding that you will repay the money plus interest.
Loan insurance
is a contract you have with an insurance company – or sometimes a government or government agency – to cover your loan payments if you have problems repaying your loan. In some cases, taking loan insurance can help you qualify for a loan, but it can add to the expense of borrowing.
Markets
traditionally are physical places where investors buy and sell stock or other investments. But in the age of computer trading, the term market also describes the organized activity of buying and selling investments electronically.
Market cycles
are alternating periods of rising and falling investment prices. They don't occur on a fixed schedule.
Married filing jointly
is an income tax filing status. If you are married and file jointly, you use one tax form to report both incomes if you both work. Couples usually save money when they file jointly.
Married filing separately
describes an income tax filing status. If you are married and file separately, you and your spouse use separate tax forms to report your individual incomes. There may be cases when couples benefit by filing separately.
Matching contribution
is money that an employer adds to an employee's retirement account, usually figured as a percentage of the employee's contribution.
Mature
means to reach the limit of its time; or to come to the end; or to become due. When a bond or another investment matures, you get your investment money back, sometimes plus interest.
Medicaid
is government health insurance for people whose income is below a certain level.
Medicare
is government health insurance for people 65 or older and the disabled.
Minimum amount due (Minimum balance due)
is the smallest payment you can make on a credit card bill without falling behind on your obligation to repay what you've borrowed.
Minimum balance
is the smallest amount of money you can have in your bank account to avoid a penalty or, in some accounts, to continue earning interest.
Minimum wage
is the lowest hourly wage that the government allows employers to pay employees.
Money market accounts
are bank accounts that pay higher interest rates than standard savings accounts, but may require you to keep a minimum balance to earn that higher rate. You can usually write checks against money markets accounts, but you may be limited to three transactions a month.
Money orders
let you pay bills or send money if you don't have a checking account or if your payee wants guaranteed payment. You give a bank or post office enough cash to buy the money order, plus a small fee. The amount of the payment is printed on the money order, which you send to your payee. The payee can exchange the money order for cash or deposit it in a bank account.
Mortgages
are special loans you use to buy a home or other real estate.
Mutual funds
are professionally managed investments that use their investors' money to buy stock, bonds, and other investments.
NASDAQ
is an electronic stock market that specializes in stocks of new and emerging companies. Some large companies, including computer, software, and Internet companies, are also listed on NASDAQ.
National debt
is money that the US government owes. The government uses some of the income taxes it collects to repay the debt and the interest on the debt.
NAV
, which stands for net asset value, is what one share of a mutual fund is worth. A fund's NAV is based on the value of the fund's underlying investments and the number of shares the fund has sold.
Net change
measures how much the value of an investment changes over a set period of time, such as a day. It can be stated as an amount or as a percentage.
Net pay
is the income that remains after you deduct taxes and pretax contributions, such as money you contribute to a retirement savings plan. It's also called your take-home pay, since it's what you actually have to spend.
Nominal interest rate (Nominal APR)
is the interest rate that a bank account pays, expressed as a yearly percentage of principal. When you’re earning compound interest, the nominal rate is lower than the annual percentage rate (APR).
Nonprofit
organizations aren't set up to make a profit, unlike businesses that try to earn more than it costs them to operate.
NYSE
stands for New York Stock Exchange, the oldest stock exchange in the US.
Online banking
means handling your checking, savings, and investment accounts by connecting to your bank's website, another financial website, or by using computer software. You can pay your bills, look up your account balance, transfer money between accounts, and more.
Orders
are instructions you give to a stockbroker to buy or sell a certain stock or other investment, either at its current value or when it reaches a certain price.
Overdraft privileges
protect you if you write checks for more than your available balance. The privileges don't cost you anything unless you use them. If you do, you pay interest on the amount your financial institution transfers from your overdraft line of credit to your checking account to cover the check.
Over-the-limit fee
is an additional fee that credit card companies make you pay if you charge more than your credit limit.
Overtime
is the time that you work in addition to your regular working hours. If you work full-time, then overtime may describe hours you work above 40 hours a week. You may earn higher wages for overtime work.
Passport
is a document that contains your photograph and information about your name, address, birth date, birthplace, and citizenship. You need a passport to travel outside the country.
Performance
describes an investment's changing value over time. If the investment increases in value, its performance is positive. If it decreases, its performance is negative.
PIN
stands for personal identification number. It's a code you need to use an ATM card or debit card, or to access your online banking or brokerage accounts. If you keep your PIN secret, no one else can use your card or log on to your account.
Portfolio
is an investor's collection of investments.
Principal
is the amount that you borrow when you take a loan or the amount that you put into an investment. The interest you owe the lender or earn on your investment is a percentage of your principal.
Profit
is the money that corporations have left after subtracting the costs of doing business. Investors have a profit when they sell an investment for more than they paid to buy it.
Progressive taxes (Graduated taxes)
are designed to tax people at different rates, depending on their income. Those with larger incomes pay at higher rates.
Property tax
is a local tax on landowners, based on the value of their real estate.
Prospectus
is a document that outlines the background, objectives, and performance of a mutual fund or new stock.
Quote
is the highest price a buyer offers to pay for an investment and the lowest price a seller is willing to take. The term is also used to describe the most recent price of a stock or bond, or its final price at the end of the trading day. You can get quotes online, in newspapers, or from your broker.
Real interest rate
is the actual percentage of principal that you earn on an investment after subtracting the rate of inflation.
References
are people who can speak in support of your job application, confirming that you would make a good employee. Former employers are often more persuasive references than family or friends.
Reinvesting
means that your investment earnings, such as dividends or interest, are added to the principal you have already invested.
Repossess
means that a lender takes a loan's collateral because the borrower stops repaying the loan.
Resume
is a formal description of your qualifications for a job, including your education and previous work experience.
Retirement savings plans
are tax-deferred or tax-exempt investment accounts. Many employers offer tax-deferred plans, such as 401(k)s or 403(b)s, which let employees contribute pretax income. You can also set up an individual retirement account (IRA). Traditional IRAs are tax deferred and Roth IRAs are tax exempt.
Return
is investment profit. Usually, it’s expressed as percent return, which is the amount your investment increased in value divided by the amount you invested.
Revenue
is the income a government gets from taxes.
Revolving credit
lets you regularly borrow money, up to a set amount called your credit limit. As you repay what you borrow, you can borrow that amount again.
Risk
is the chance an investor takes of losing money on an investment. For example, if a company's management makes bad decisions, there's a risk the value of your stock may fall.
Roth IRAs
are tax-free individual retirement accounts. You pay tax on the amount you invest, but all of your investment earnings and your withdrawals are tax free, as long as you follow the withdrawal rules.
Salary reduction plans
are retirement savings plans, such as 401(k) and 403(b), which allow you to contribute pretax income to a tax-deferred investment account.
Sales tax
is a charge that's figured as a percentage of the cost of products and services you buy and added to your bill. The seller collects the tax and sends it to the state or local government that levies the tax.
Savings accounts
are bank accounts where you keep money you don't expect to use to pay your current bills but may need to use in the near future. Savings accounts usually earn interest.
Sector
is an unofficial division of a stock market that includes stocks of a specific industry, such as computers or retail stores.
Secured cards
are credit cards linked to special savings accounts. People who don't qualify for regular credit cards because they have a poor credit history or no credit history may be able to get a secured card.
Share
is a unit of equity, or ownership. You can own one or more shares of a stock or a mutual fund, which means that part of the value of the company or the fund belongs to you. The more shares you own, the more equity you have.
Shareholders
own stock in a company or mutual fund.
Short-term investments
are almost always cash equivalent investments, which can be converted to cash easily with little or no loss of value.
Signature cards
are official bank records of your signature. The bank compares the signature on checks you sign to the signature card, making it harder for someone to forge your name.
Simple interest
is interest that you may earn on the balance in a bank account or on your investment principal. With simple interest, you don't earn interest on the interest that you have already earned and added to your account.
Social Security
is a government program that pays benefits to retired and disabled workers and their families.
Social Security credits
are the way you qualify for Social Security. You earn credits by working for a certain number of quarters of a year – currently 40, or the equivalent of 10 years – and earning at least a minimum amount in each quarter.
Social Security number
is a unique sequence of numbers issued to each US citizen born in the US or naturalized citizens from other countries who live and work legally in the US.
Standard deduction
is a set amount that you can subtract from your income before figuring how much tax you owe. People who spend about the average amount on expenses such as charitable contributions or uninsured health care and use the standard deduction don't have to list expenses separately to be able to deduct them. If your deductible expenses are less than the standard deduction, it's perfectly legal to use the standard deduction. If they are larger, you can subtract your actual expenses.
Statements
are reports from banks or other financial institutions that detail your account activity – such as how much you added or withdrew – for a set amount of time, typically the previous month or three months.
Stock symbols
are abbreviations that identify each publicly traded stock. They may be one to five letters long, and are sometimes related to the issuing company's name, such as IBM for IBM.
Subsidizing
means paying part of the cost of something. For example, the government may subsidize your student loan by paying the interest you owe if you qualify based on your family's income.
Tax adjustments
are certain tax-deductible expenses that you can subtract from your gross income as part of the process of finding your taxable income. For instance, you can subtract interest on student loans.
Tax brackets
are levels of income that are taxed at a specific rate for a particular filing status. For example, if you filed your tax return as a single person for tax year 2000, and had taxable income of less than $26,250, you were in the 15% bracket, the lowest one for that year. If you earned more than that, you paid a higher percentage. The highest rate at which you pay is called your marginal tax bracket.
Tax credit
is a dollar amount that you can subtract directly from your tax bill for certain things, such as education expenses.
Tax deductions
are tax-deductible expenses, such as contributions to charity, that you can subtract from your adjusted gross income to find your taxable income.
Tax-deferred
investments provide a break on your income taxes. You don't pay tax on any earnings in the account until you take the money out of the account. Sometimes the amount you invest is tax deferred too, which reduces your current taxes.
Tax exempt (Tax-free) investments
are investments whose earnings aren't taxed either as you earn them or when you take them out. Tax-exempt organizations, such as
certain charities and educational institutions, aren't required to pay government taxes.
Tax rates
are specific percentages of taxable income that are due to the government as income taxes. For tax year 2000, there were five federal tax rates, from a low of 15% to a high of 39.6%.
Tax refund
is the amount that you overpay in taxes during the year, which the government returns to you after you file your tax return.
Taxable income
is the part of your income on which you owe tax. To find your taxable income, you subtract the adjustments, exemptions, and deductions you qualify for from your gross income.
Taxes
are amounts a government charges most citizens to cover its expenses. Different levels of government levy different types of taxes.
Term
describes the length of time a financial arrangement lasts. Bonds, loans, and certain investments such as CDs all have fixed terms, which means that they mature on a certain date.
Tips
are payments that customers make to people who provide a service, such as a barber or a restaurant server. The amount of the tip – if any at all – is the customer's choice.
Total return
is the amount your investment has increased in value plus any interest or dividends it has paid. It’s usually reported as a percentage of what you invested, or total
percent return.
Transactions
are banking or investment activities, such as withdrawing money, taking a loan, or purchasing mutual funds.
Treasury bills
are government bonds with short terms – either 13 or 26 weeks. Since the government issues these bills, they are considered as safe as a cash investment.
Underlying investments
are the stocks, bonds, and other investments that a mutual fund owns.
Unsecured loan
is a loan that doesn't require collateral. Certain loans, such as student loans, are usually unsecured.
Variable rate (Adjustable rate)
is an interest rate that is changed periodically, perhaps every six months or one year, to reflect changes in the cost of borrowing in the market as a whole.
Verifying
a check means that a bank confirms that you wrote a check by matching the signature on the check to the one they have on file on your signature card.
Volatile
investments are ones whose value changes all the time. Often the short-term changes can be quite dramatic.
Volatility
is a term that describes how much and how quickly the value of an investment changes.
Volume
is the number of shares of a stock trading at a certain price or during a period of time, such as a trading day.
Welfare
is a set of government programs that help families overcome certain financial difficulties. Welfare programs typically include housing allowances, food stamp programs, low-cost health insurance, and more.
Withdraw
means take money out of your account.
Withdrawal slips
are pieces of paper you fill out to get cash from your savings or investment account.
Withholding
occurs when your employer subtracts amounts from your gross income for taxes and pretax expenses, such as contributions to a retirement savings plan. The term can also describe the amount that your employer withholds.
Zero-coupon bonds
don't pay regular interest, as other bonds do. Instead, you buy a zero-coupon bond at a price lower than its face value, and collect the full face value when the bond matures. The difference between what you paid and what you get at maturity is your interest.