Finance & Economics

An ACH transfer is an electronic way to move money between bank accounts using the Automated Clearing House network. This system allows for direct deposits, bill payments, and other money transfers without the need for paper checks.

Buy Now Pay Later (BNPL) is a payment option that allows consumers to purchase items and pay for them over time, often in installments. This service typically does not require interest, making it an attractive choice for shoppers who want to manage their expenses more flexibly.

A bail-in occurs when a bank uses its own funds, typically from shareholders and creditors, to stabilize itself during financial distress, while a bailout involves external support, often from the government, to rescue a failing bank. Both mechanisms aim to prevent a bank's collapse, but they differ in who bears the financial burden.

A bank is a financial institution that accepts deposits from the public and provides loans and other financial services. It plays a crucial role in the economy by facilitating transactions and providing a safe place for people to store their money.

A bank run occurs when a large number of customers withdraw their deposits simultaneously due to fears that the bank may fail. This can lead to liquidity issues for the bank and potentially result in its collapse.

A global regulatory framework, Basel III aims to strengthen the regulation, supervision, and risk management within the banking sector. It sets higher capital requirements and introduces new regulatory requirements on bank liquidity and leverage.

A central bank is a national institution that manages a country's currency, money supply, and interest rates. It plays a crucial role in the economy by regulating the banking system and ensuring financial stability.

A checking account is a type of bank account that allows you to deposit money and withdraw funds easily for daily transactions. It typically offers features like checks, debit cards, and online banking, making it convenient for managing everyday expenses.

A commercial bank is a financial institution that offers a range of services such as accepting deposits, providing loans, and facilitating transactions. These banks play a crucial role in the economy by helping individuals and businesses manage their money and access credit.

Deflation is a decrease in the general price level of goods and services in an economy. It means that money can buy more than it could before, leading to increased purchasing power for consumers.

A digital wallet is an electronic system that allows individuals to store and manage their payment information securely online. It enables users to make transactions, pay bills, and transfer money using their smartphones or computers without needing physical cash or cards.

FDIC Insurance is a government-backed protection that guarantees deposits made at member banks up to a certain limit. It ensures that even if a bank fails, depositors will not lose their money, up to $250,000 per depositor, per bank.

The Federal Funds Rate is the interest rate at which banks lend money to each other overnight. It is a key tool used by the Federal Reserve to influence monetary policy and the economy.

Fintech refers to technology that improves and automates financial services. It includes everything from mobile banking apps to online investment platforms, making financial transactions easier and more accessible.

This banking system allows banks to keep only a fraction of their deposits as reserves while lending out the rest. It helps banks create money and provides liquidity to the economy.

A HELOC, or Home Equity Line of Credit, is a loan that allows homeowners to borrow against the equity in their home. It provides a flexible way to access funds for various expenses, usually at a lower interest rate than other types of loans.

A home equity loan is a type of loan where homeowners borrow money against the equity in their home. This means they use the value of their home, minus what they owe on the mortgage, as collateral for the loan.

An IBAN, or International Bank Account Number, is a unique identifier for bank accounts used internationally. It helps ensure that cross-border transactions are processed smoothly and accurately.

An investment bank is a financial institution that helps companies and governments raise money by underwriting and issuing securities. They also provide advisory services for mergers and acquisitions and facilitate trading of financial assets.

LIBOR and SOFR are benchmark interest rates used in the financial markets. LIBOR, or the London Interbank Offered Rate, was used to determine borrowing costs, while SOFR, or the Secured Overnight Financing Rate, is a newer rate based on actual transactions in the U.S. Treasury repurchase market.

A line of credit is a flexible loan option that allows individuals or businesses to borrow money up to a specified limit. Borrowers can access funds as needed and only pay interest on the amount they use.

A mobile payment is a method of paying for goods and services using a smartphone or other mobile device. This process often involves apps or digital wallets that securely store payment information, allowing users to complete transactions quickly and easily.

Monetary policy is the process by which a country's central bank manages the money supply and interest rates to influence the economy. It aims to achieve goals like controlling inflation, maximizing employment, and stabilizing the currency.

The money supply refers to the total amount of money available in an economy at a specific time, categorized into different measures known as M1, M2, and M3. M1 includes cash and checking deposits, M2 adds savings accounts and money market securities, while M3 includes larger time deposits and institutional money market funds.

The NCUA is a U.S. government agency that regulates and insures credit unions. It protects members' deposits and ensures that credit unions operate safely and soundly.

A neobank is a digital-only bank that operates without physical branches. It offers banking services through online platforms and mobile apps, focusing on convenience and lower fees.

A system that allows banks to share customer financial data with third-party providers, given the customer's consent. This enables new financial services and applications to be developed, enhancing customer experience and competition.

Open Market Operations are actions taken by a country's central bank to buy or sell government securities in the open market. This process helps control the money supply and influence interest rates in the economy.

An overdraft is a banking feature that allows you to withdraw more money than you have in your account, up to a certain limit. This can help cover unexpected expenses but often comes with fees and interest charges.

A personal loan is a type of unsecured loan that individuals can borrow from banks or financial institutions to cover various expenses. It typically comes with a fixed interest rate and a set repayment schedule, making it easier to budget for monthly payments.

The Prime Rate is the interest rate that banks charge their most creditworthy customers for loans. It serves as a benchmark for various types of loans and credit products offered to consumers and businesses.