Glossary of Financial Terms

A

Account

A contractual arrangement between a company or individual, and a business or financial institution which facilitates regular transactions.

· See Also · Chequing Account · Savings Account · Account Agreement

Account Aggregation

The management of multiple accounts through a single user interface.

· See Also · Account · Account Agreement

Account Agreement

An agreement signed by the customer and the bank which specifies account services, conditions, right, responsibilities and limitations for all parties.

· See Also · Account

Account Balance

The total amount of money in an account at a given time after all debits and credits have been accounted for.

· See Also · Account · Chequing Account · Savings Account

Account Reconciliation

The process of comparing ones own records of account use against those of the banks to ensure that they match.

· See Also · Account Statement

Account Statement

A report of all transactions made against an account in a given time period.

· See Also · Account Reconcilliation

Accounts Payable

Amounts owed by a business for goods or services rendered.

· See Also · Accounts Receivable

Accounts Receivable

Amounts owed to a business for goods or services rendered.

· See Also · Accounts Payable

Accrued Interest

The cumulative amount of interest on an account that has not yet been paid to the account holder.

· See Also · Interest

Active Account

An account that is regularly used to conduct transactions.

· See Also · Inactive Account

Adjustable Rate

A rate that fluctuates based on the relative movement of another rate. (Usually the prime rate.)

· See Also · Line of Credit · Mortgage · Line of Credit

Adjusted Balance

A method of calculating finance charges over a certain period based on the final balance of the account at the end of that period.

· See Also · Average Daily Balance

Affinity Credit Card

A credit card bearing the logo of an organization having a type of sponsorship arrangement with the issuing credit card company entitling the sponsor to some form of remuneration based on a percentage of purchases made using that card.

· See Also · Co-Branded Credit Card

Agent

An intermediate person or organization who buys or sells financial products on behalf of a consumer.

Within the financial industry there are mortgage brokers, investment dealers, insurance agents, etc. who focus on delivering personal service to their clients. In some cases these brokers work for a single company (e.g. a State Farm Agent will only sell financial products from State Farm) while in other cases these agents will sell multiple products from multiple companies. In most cases these financial brokers are licensed by a regulatory body.

· See Also · Broker · Managing General Agent

Amortization

The repayment of a loan over the specified time period of that loan.

· See Also · Amortization Schedule · Mortgage

Amortization Schedule

A table that specifies when all payments will be made over the course of a loan.

· See Also · Amortization · Mortgage

Annual Average Growth Rate

The change in the value of something, (expressed percentage points) in a given year when comparing its value from the previous year.

· See Also · Return · Yield

Annual Percentage Rate

The amount of interest, (expressed in percentage points), that when calculated equals the total finance charges over a year.

· See Also · Interest

Annual Percentage Yield

The amount of interest, (expressed in percentage points), that when calculated equals the total amount earned over a year.

· See Also · Interest

Appreciation

The amount by which an asset has increased in value.

· See Also · Depreciation

Assets

Money or real goods having monetary value.

· See Also · Liabilities

Automated Banking Machines

Stand-alone banking terminals used by customers to carry out banking transactions.

· See Also · ATMs

Automated Clearing Settlement System

A system that is managed by the CPA (Canadian Payments Association) by which the values of paper-based and electronic payment items are exchanged.

· See Also · Clearing System · CPA

Automatic Payment

An arrangement authorized by an account holder whereby regular payments are withdrawn from that account.

· See Also · Direct Debit

Automatic Transfer

An arrangement authorized by an account holder whereby regular amounts are withdrawn from one account and deposited in another.

· See Also · Automatic Payment

Average Daily Balance

The average balance of an account derived from the balance of the account at the end of each day divided by the number of days in a given period of time.

· See Also · Adjusted Balance

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