Account Balance
The exact amount of money in an account.
Account fee
A regular amount charged by the bank or other financial provider to an account, often monthly.
Accounting
A system of recording monetary transactions also called bookkeeping.
Annual fee
A fee often charged by credit card companies annually.
Annual percentage rate (APR)
The actual yearly cost of a loan, including interest and charges.
Annual percentage yield (APY)
The return on an investment, over one year.
Appreciation
Increase in the value of an asset.
Assets
Things of value owned by a person or a company or business.
Automated Teller Machine (ATM)
Automated facility for customers to withdraw money and do certain other transactions. Often called hole in the wall or cashpoint.
Bad credit
A situation in which lenders believe that, due to a borrower's bad history, further loans to this person would be especially risky.
Bank
A financial institution handling money for its customers.
Bank account
A service provided by a bank, allowing customers to handle and track their money. Services include current accounts, savings accounts, credit cards, loans and mortgages.
Bank statement
A document sent to customers by the bank, detailing the transactions on an account usually sent monthly.
Bankruptcy
A process of legally declaring inability to repay debts, and providing protection for the debtor. Bankruptcy orders are kept on record for six years from the date of the bankruptcy.
Bond
An investment in the government or a company essentially a loan, with a fixed or variable rate of interest. Usually has a fixed term.
Bookkeeping
See accounting.
Borrower
A person or business that borrows money from a lender.
Bouncing a cheque
The process by which a bank refuses to pay a cheque drawn on a customer's account usually because the account does not contain enough money.
Break-even
The point at which income equals expenses.
Budget
A financial plan drawn up can be for an individual, a family, a business, or a government. Usually for a period of a month, or a year, but can be for longer periods.
Building Society
A financial institution offering many of the services offered by banks. Building societies are usually owned by members.
Capacit
A borrower's ability to make monthly repayments on a loan or other commitment.
Capital
The total of a person's or a business's assets less their liabilities.
Capital gain
Profit made on an asset the difference between the proceeds of sale and the cost of buying the asset.
Capital Gains Tax
A tax on capital gains.
Capital loss
Loss made on selling an asset when the cost of buying the asset is more than the proceeds of sale.
Cash flow
A measure of the movement of cash in and out of the funds of a company or an individual.
Certified cheque
A cheque written on a bank account, which is guaranteed by the bank, on which it is drawn.
Character
A judgement made by a lender about the financial steadiness of a borrower including things like length of time at current address, or in present employment.
Charge card
Similar to a credit card, but the holder is required to pay off the balance in full every month.
Cheque
A written order instructing a bank to pay a specific amount to a specific person. A cheque must be dated and signed.
Cheque guarantee card
A card issued by a bank, guaranteeing payment up to a specified limit.
Cleared funds
When you pay an amount into your bank, it is only cleared when it has gone through the system and has been paid by the payer's bank.
Clearing
The time it takes for money to be processed as it moves between bank accounts.
Collateral
Assets of a borrower that a lender has a right to take possession of if the borrower defaults on payment.
Collection agency
A business specialising in collecting outstanding debts.
Commission
A form of payment for a service which is related to the principal amount of a transaction. For example, estate agents charge a commission of a percentage of the sale price of a house. Stock brokers charge a commission of a percentage of the value of the trade carried out.
Completion
The day and time when all the necessary legal formalities are signed for the transfer of a house or piece of land.
Compound interest
Interest paid or received not only on the original amount of the loan or investment, but also on the accumulated interest.
Consumer
An individual buying products or services for personal or household use.
Corporation tax
A tax on the profits of companies.
Cost of loan
The total cost of servicing a loan including interest plus all charges, fees, etc.
Council tax
A local tax based on the value of a property.
County Court Judgment (CCJ)
Record of a court order to repay money. CCJ's stay on the record for six full years from the date of the judgment.
Credit
The process of allowing a customer to purchase goods or services on the promise of future payment.
Credit card
A card used to borrow money or to pay for purchases. The card allows the cardholder revolving credit that can be paid monthly from the minimum amount up to the full amount.
Credit history
A record of a person's use of credit.
Credit limit
The maximum amount allowed to be used on a credit card.
Credit rating
An evaluation of an individual's or a business's financial history and ability to pay debts.
Credit reference agency
An organisation that collects information on people's credit history for use by lenders.
Credit union
A not-for-profit organisation owned by its members providing saving and loan facilities for its members.
Creditor
A person or business to whom money is owed.
Creditworthiness
A lender's evaluation of a borrower's ability to pay debts.
Currency
Any form of money in public circulation, and universally accepted.
Current account
A bank account allowing a customer to deposit money and withdraw money, by writing cheques, standing orders or direct debits.
Database
A collection of information organised for ease and speed of access and reference usually kept on a computer.
Debit
Any transaction that reduces the balance in a bank account.
Debit card
A card issued by a bank. Used in a similar way to a credit card, but the amount is debited immediately from the bank account.
Debt
Money owed to another person or business.
Debt counsellor
A professional adviser helping people with debt problems can be on a paid or voluntary basis.
Deed
A legal document conveying ownership of property.
Default
Failure to pay a debt.
Delinquency
Regular late payments by a debtor on monthly payments, or on trading accounts.
Deposit
Putting money into a bank account in the form of cash or cheques or as a direct deposit, such as from an employer.
Deposit slip
A bank form to enable deposits to be credited to the correct bank account.
Direct debit
A form of payment, authorised by signature of a bank account holder, authorising a creditor to withdraw sums from the holder's bank account.
Diversification
An investment strategy designed to reduce risk by combining a variety of investments. Not putting all your eggs in one basket.
Dividend
Reward for investors in a company — a share in the profits.
Down payment
First sum of money paid to a seller or hire purchase company. Also called a deposit.
Fees
Charges made by a financial institution for their services.
Financial institution
Any business providing financial services to the public including banks, building societies, credit unions, money lenders, insurance companies, pension companies, etc.
Financial planning
The process of setting financial goals, and producing plans (e.g. budgets) to achieve those goals.
Fixed costs
Costs which do not vary, such as monthly payments on a hire purchase agreement.
Fixed rate mortgage
A mortgage with a fixed rate of interest.
Foreclosure
The legal process by which a lender enforces their right to possess a property and sell it to pay off their debt.
Identity theft
Criminal activity involving stealing personal information allowing the thief to obtain goods or credit falsely.
Income
Amount of money received or earned over a period of time.
Income Tax
A tax on personal income.
Individual Savings Account
A form of saving and investing with tax advantages.[ISA]
Inheritance Tax
A tax charged upon the value of a person’s estate at the time of their death
Instalment credit
A loan repaid in regular instalments over a period of time.
Insurance
Business contract (known as a policy) by which the insurer promises to pay certain amounts in the event of certain contingencies happening. The cost of this is called the premium.
Interest
Financial reward for the use of money. Usually expressed as a percentage of the amount of money involved (the principal).
Interest rate
The amount of interest paid or charged in percentage form.
Investing
Purchasing something usually part ownership of a business or property for the expectation of future reward or gain.
Investment trust
A form of collective investment. Many small investors entrust their money to the managers who invest in a range of companies.
National Savings
A government organisation giving a range of savings products - accounts, bonds, etc.
Net income
The amount of income for a certain period after all deductions (e.g. tax and National Insurance). Also called "take-home" pay.
Online banking
A service enabling you to operate a bank account over the Internet.
Outstanding balance
The amount of a debt still owing.
Overdraft
An arrangement whereby the bank allows a customer to withdraw more funds from a current account than have been deposited. It is a form of lending.
Pawnbroker
A money lender taking goods as pledges against the repayment.
Pay period
The period of time used to calculate wages (usually weekly or monthly).
Payee
The person or business to whom a payment is made.
Payer
The person or business who pays money.
Payroll deductions
Deductions made at source i.e. before wages are paid to the employee. Includes items like tax, National Insurance, student loan repayments and pension contributions.
Pension
An income paid to someone who has retired from work.
Personal Identification Number (PIN)
A secret combination of numbers used to gain access to information or money.
Personal guarantee
A legally binding promise to make good a debt if the borrower defaults.
Portfolio
A collection of investments owned by the same person.
Predatory lending
Lending money in a way that is unscrupulous, illegal, or not in the best interests of borrowers.
Premium
The annual costs of renewing an insurance policy.
Principal
The amount of money borrowed, loaned or invested, on which interest is charged.
Profit
The gain of a business or an investment after all expenses have been met.
Profit sharing
An arrangement by which an employer shares some of the profits with its employees.
Prospectus
A document offering shares for sale in a company.
