Saving and investing Vocabulary

28 terms by RichardsJT

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Simple Interest

The amount of money paid or earned for the use of money

compound Interest

interest calculated on both the principal and the accrued interest

rate of return

The return on an investor's capital. Also called Yield. Expressed in a percentage

risk

The chance that an investment's actual return will be different than expected.

Liquidity

being in cash or easily convertible to cash

EE Savings Bonds

Government investment which you put down in cash half the face value and wait for it to mature

Mutual Funds

a pool of money invested by a professional in a group of stocks.

Stocks

Shares of ownership in a corporation.

Bonds

a certificate issued by a government or private company which promises to pay back with interest

Securities

All of the investments, including stocks, bonds, mutual funds, options, and commodities, that are traded.

Real Estate

Land including all the natural resources and permanent buildings on it.

Retirement Plans

Company sponsored programs for providing retirees with income

individual Retirement Account

a self-funded retirement plan that allows you to contribute a limited yearly sum toward your retirement

Pay yourself first

taking a certain amount of all money you receive and saving it to be used for spending on longer-term goals

Saving Accounts

the amount of money you have in the bank that you receive interest on

Share accounts

The credit union term for a checking account

Check accounts

an account you can deposit and withdrew

Certificates of Deposit

you are loaning a bank money for a set period of time and getting interest in return.

Principal

the major party to a financial transaction at a stock exchange

Annual Percentage Rate

the total cost of credit expressed as a yearly percentage

Maturity Date

the date when a bond will be repaid

Direct deposit

An automatic deposit of a paycheck without having to take a physical check to the bank.

payroll deduction

Charges subtracted from your paycheck

FDIC

a federally sponsored corporation that insures accounts in national banks and other qualified institutions

NCUA

agency of many credit unions

Rule of 72

the amount of time it takes for money to double in value

Asset

something of value, a resource

Diversification

A risk management technique that mixes a wide variety of investments within a portfolio

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