Finance Glossary

An account number is a unique number assigned to your bank account or financial account. It helps identify your specific account when sending or receiving money.

ACH stands for Automated Clearing House. It’s an electronic network used to move money between bank accounts in the U.S., often for direct deposit, bill payments, and bank transfers.

After-tax income is the amount of money left after taxes have been taken out of a person’s gross income. When doing your taxes, after-tax income can help show how much income you actually kept after federal, state, local, Social Security, Medicare, and other applicable taxes were withheld or paid.

An annual fee is a yearly charge that some credit cards, accounts, or financial products require for access to their features or benefits.

Annual Percentage Rate (abbreviated APR) is the yearly cost of borrowing money, including interest and certain fees, expressed as a percentage.

Annual Percentage Yield (APY) is the total amount of interest an account can earn over one year, expressed as a percentage and including the effect of compounding. APYs can vary by financial institution, account type, balance, eligibility requirements, and market conditions.


For example: A $1,000 balance would earn about $33.50 in one year at 3.35% APY or about $40 at 4.00% APY, assuming the balance and APY remain unchanged.

An authorized user is someone who is added to another person’s credit card account and can use the card to make purchases. The primary account holder is typically responsible for payments.

An ATM, or automated teller machine, is an electronic terminal that allows customers to perform basic banking transactions, such as withdrawing cash, checking a balance, or making certain deposits, without assistance from a teller.

Autopay is a payment feature that automatically pays a bill or account balance on a scheduled date using a linked payment method.

A balance transfer is the process of moving debt from one credit card to another, often to take advantage of a lower interest rate. A balance transfer fee or temporary promotional APR may apply.

A billing cycle is the period of time between one statement closing date and the next. Purchases, payments, fees, and interest during that period are summarized on your statement.

Blockchain technology is a system for recording data in linked blocks that form a shared, continuously updated ledger, maintained and verified by a network of computers.

A brokerage account is a type of financial account that lets you buy and sell investments like stocks, bonds, mutual funds, and ETFs. These accounts are typically offered by licensed brokerage firms and are not bank accounts or FDIC-insured, though they are subject to SIPC protections.

Capital gains is the profit you earn when you sell an investment, like a stock or crypto asset, for more than you originally paid for it. Capital gains are typically taxed differently depending on how long you held the asset before selling.

A card issuer is the financial institution or company that issues a credit card and manages the associated credit account. 

A few examples of card issuers are: Synchrony Bank, Chase, Capital One, and Citi.

A CD or certificate of deposit is a savings product that locks in money for a fixed period. They usually offer higher interest than regular savings accounts.

Check Clearing for the 21st Century Act (Check 21) is a federal law that allows banks to process checks electronically and create substitute checks instead of transporting original paper checks.

Compounding interest is when interest is calculated on both your original amount and any interest already earned or charged. Over time, this can help your savings grow faster or increase the total cost of debt.

A credit bureau is a company that collects credit information and creates credit reports. Lenders may use these reports to help evaluate applications for credit.

A credit freeze is when you restrict access to your credit report to help prevent new accounts from being opened in your name. You can lift or remove the freeze at any time when you need to apply for credit.

A credit history is a summary of how you’ve used and repaid credit over time. It includes factors like payment behavior, account types, and length of credit, and may impact your credit score.

Credit limit is the maximum amount you can borrow on a credit card. Exceeding it may result in declined transactions or fees.

A credit report is a record of your credit activity, including accounts, payment history, and inquiries. Credit reports are maintained by credit bureaus and used by lenders to evaluate applications.

A credit scoring model is a formula used to calculate a credit score based on information in your credit report. Different models may weigh factors like payment history, credit utilization, credit age, credit mix, and recent credit applications differently.

A credit union is a member-owned, not-for-profit financial institution that accepts deposits, makes loans, and provides other financial products and services. 

Credit utilization is the percentage of your available credit that you’re using. For example, if you have a $1,000 credit limit and a $300 balance, your credit utilization is 30%. 

Cryptocurrency, often called crypto, is a digital asset that exists only in electronic form and runs on blockchain networks—decentralized non-bank systems that record and verify transactions across a network of distributed computers.

Direct deposit is an electronic payment sent directly into a bank or credit union account instead of being issued as a paper check.

Diversification is an investment strategy that involves spreading your money across different types of assets, such as stocks, bonds, or funds, to help reduce risk. It does not guarantee a profit or protect against loss.

A dividend is a payment a company may make to its shareholders, typically from its profits and usually in cash or additional shares.

Dollar-cost averaging is an investing strategy where you invest a fixed amount of money at regular intervals, regardless of the asset's price at the time. This approach spreads out your purchases to help reduce the impact of short-term market swings.

Early pay is a feature that may make an eligible direct deposit available before the scheduled payment date. The timing can vary based on when the payment information is received and the financial institution’s policies.

Earnings per share (EPS) is a measure of a company’s profit divided by the number of outstanding shares. It’s commonly used to help evaluate a company’s financial performance.

An ETF is a type of investment fund that holds a collection of assets, such as stocks or bonds, and trades on an exchange like a stock. ETF prices can change throughout the trading day.

Federal Deposit Insurance Corporation (FDIC) is an independent U.S. government agency that insures eligible deposits at FDIC-insured banks and helps maintain stability and public confidence in the financial system.

Fiat currency, like the U.S. dollar, operates within traditional banking and payment systems, making it widely usable but sometimes limited by processing times and bank hours.

A FICO score is a type of credit score, typically ranging from 300 to 850, that lenders use to evaluate a person’s likelihood of repaying borrowed money. FICO is not one of the three major credit bureaus; instead, FICO scores are calculated using information from credit reports maintained by Equifax, Experian, and TransUnion, which means a person may have a different FICO score from each bureau.

Filing status is a tax classification based mainly on a person’s marital and household circumstances that affects filing requirements, tax calculations, the standard deduction, and eligibility for certain credits.

Fintech is short for financial technology, which refers to digital tools, apps, and platforms that help people manage, move, save, borrow, or spend money.

Fixed vs. variable interest rates is a comparison between two ways loans or credit accounts charge interest: a fixed rate stays the same for the life of the loan, while a variable rate can rise or fall over time based on market conditions. Fixed rates offer predictable payments, while variable rates can start lower but carry more risk of change.

A foreign transaction fee is a charge a card issuer may apply to a purchase or cash advance made outside the United States, with a foreign merchant, or in a foreign currency.

A fractional share is a portion of a single share of a stock or ETF. It allows you to invest in securities without needing to buy a full share, which can make higher-priced investments more accessible.

Funds availability policy is a financial institution’s disclosure explaining when money from deposits will be available for withdrawal or use, including any applicable holds or delays.

A grace period is a set amount of time after a payment due date when a payment may still be made without certain penalties, depending on the account or lender terms.

A hard credit check is when a lender reviews your credit report as part of a credit application, such as for a loan or credit card. This type of inquiry may impact your credit score.

An index fund is an investment fund designed to track the performance of a specific market index, such as the S&P 500. These funds are typically passively managed and may have lower fees than actively managed funds.

An installment is a loan that is repaid over time with a set number of scheduled payments, usually monthly. Each payment typically includes both principal and interest.

An interest rate is the percentage charged for borrowing money or earned on savings, usually expressed on an annual basis. Your actual rate may vary depending on the product and your financial profile.

An IRA is a tax-advantaged retirement account that individuals can use to save and invest for retirement. Contributions and withdrawals may be subject to specific tax rules and eligibility requirements.

A late fee is a charge that may apply when at least the required minimum payment is not received by the payment due date.

Liquidity is how quickly and easily an asset can be converted to cash without significantly reducing its value.

A minimum balance is the amount an account holder may need to maintain in an account to avoid a fee, be able to earn interest, or qualify for certain account features.

A minimum payment is the smallest amount you must pay by your due date to keep your account in good standing. Paying only the minimum may lead to interest charges and may take longer to pay off your balance.

A monthly maintenance fee is a recurring charge for maintaining a checking, savings, or money market account. Depending on the account, sometimes fees are waived when requirements such as maintaining a minimum balance or receiving direct deposit are met. 

A mutual fund is an investment that pools money from many investors to buy a diversified portfolio of stocks, bonds, or other assets. Professional fund managers make the investment decisions for the fund.

Net vs. gross income is a comparison between what you earn before and after deductions: gross income is your total earnings before taxes and other withholdings, while net income is what's left after those deductions — the amount that actually lands in your account. Net income is generally what's most useful for budgeting since it reflects your real take-home pay.

Net worth is the total value of everything you own (assets) minus everything you owe (liabilities). It's a snapshot of your overall financial health at a given point in time.

For example: If you have $10,000 in savings and owe $2,000 on a credit card, your net worth is $8,000.

Online banking is a service that allows customers to view and manage their bank or credit union accounts through a secure website.

An overdraft is what happens when a transaction causes an account balance to go below zero or below the available balance. Some financial institutions offer overdraft protection, which may help cover certain transactions when there isn’t enough money in the account, though fees, limits, and eligibility requirements can vary.

A payment due date is the date by which at least the required minimum payment must be received to be considered on time. Missing the due date may result in a late fee or additional interest, and a payment that remains overdue may be reported to the credit bureaus and affect your credit.

Payment history is a record of whether payments on credit accounts were made on time, late, or missed.

P/E ratio is the price-to-earnings ratio, a metric that compares a company’s current share price to its earnings per share (EPS) to help investors evaluate how expensive or cheap a stock may be relative to its profitability.

The prime rate is an interest rate that banks use as a benchmark for setting rates on loans and credit products. Your actual rate may be higher depending on factors like your credit profile.

Revolving credit is a type of credit that lets you borrow up to a set limit, repay some or all of what you owe, and borrow again. Credit cards are a common example.

A robo-advisor is a digital platform that uses algorithms to provide automated investment management services, often based on your financial goals and risk tolerance, with limited human involvement.

A Roth IRA is a type of IRA funded with after-tax contributions. Qualified withdrawals, including earnings, may be tax-free if certain conditions are met.

A routing number is a nine-digit number that identifies a bank or financial institution in the U.S. It’s often used for direct deposit, bill pay, wire transfers, and ACH transfers.

A Social Security number (SSN) is a nine-digit number assigned by the Social Security Administration to track an individual’s earnings and benefits records. Banks may request an SSN to verify identity, open an account, and report interest income, while taxpayers commonly use it on tax forms and returns so the IRS can match income and tax records.

A review of your credit that does not affect your credit score. Soft checks may be used for prequalification or account monitoring.

A sponsor bank (sometimes referred to as a partner bank) is an FDIC-insured bank that partners with a fintech company to provide the underlying banking infrastructure and regulatory backing needed to offer deposit accounts, cards, or payments. The fintech handles the customer-facing app and experience, while the sponsor bank actually holds the funds and carries the compliance responsibility.

For example: OnePay's deposit accounts, for example, are held by its sponsor banks, Coastal Community Bank and Lead Bank, Members FDIC.

Stablecoins are a type of digital asset designed to maintain a stable value, often by being tied to a reference asset like a fiat currency. They may carry risks, including changes in value, regulatory uncertainty, and how reserves are managed.

A statement balance is the total amount owed on an account at the end of a billing cycle, as shown on the account statement.

A statement credit is money applied to an account balance that reduces the amount owed on a statement. For example, a card issuer may apply a statement credit after a refund, a promotional offer, a rewards redemption, or a correction for an eligible charge. A statement credit can lower the balance shown on the account, but it may not always count as a required minimum payment.

A student loan is money borrowed from the federal government or a private lender to help pay for education-related expenses and typically must be repaid with interest.

A tax-advantaged account is a type of account that offers certain tax benefits, such as tax-deferred growth or tax-free withdrawals, depending on the account type and applicable rules.

Two-factor authentication (2FA) is a security process that requires two forms of verification before someone can access an account, such as a password plus a one-time code.

Volatility is a measure of how much and how quickly the price of an asset rises or falls over time, indicating the level of risk or uncertainty in its value.

Zero-based budgeting is a method that assigns every dollar of income to spending, saving, or debt repayment so planned income minus planned allocations equals zero. It does not mean spending all available money or leaving an account balance at zero.