Tips and Tools For Financial Success - Newton Free Library
Tips and Tools For Financial Success - Newton Free Library
Tips and Tools For Financial Success - Newton Free Library
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Glossary (excerpted from FDIC Money Smart)<br />
401(k) Plan: A retirement savings plan established by an employer in which employees set aside a<br />
percentage of pay in an account that earns interest.<br />
403(b) Plan: A retirement savings plan similar to a 401(k), but exclusively for employees of public<br />
schools <strong>and</strong> certain tax-exempt organizations.<br />
529 College Savings Plan: An education savings plan operated by a state or educational institution. It<br />
is designed to help families set aside funds to pay for future college costs.<br />
Annual Percentage Rate (APR): The cost of your loan expressed as a yearly percentage rate.<br />
Annual Percentage Yield (APY): The amount of interest you will earn on a yearly basis. It is expressed<br />
as a percentage.<br />
Automated Teller Machine (ATM): A kiosk or terminal where you can deposit, withdraw, or transfer<br />
money from one account to another 24 hours a day.<br />
Balance: The amount of money you have in your bank account.<br />
Bank: A business that offers you a safe place to keep your money <strong>and</strong> uses your deposits to make loans.<br />
This business is also called a financial institution.<br />
Bank Statement: A monthly record of the deposits <strong>and</strong> withdrawals made.<br />
Bonds: Loans to corporations or to the government for a certain period of time, called a term. You earn<br />
interest on your loan investment, <strong>and</strong> at the end of the term, your bond matures <strong>and</strong> can be repaid to<br />
you by the company.<br />
Certain Retirement Accounts: Deposit accounts owned by one person <strong>and</strong> titled in the name of that<br />
person’s retirement plan.<br />
Certificate of Deposit (CD): An account in which you leave your money for a set term (e.g., six months<br />
or one, two, or five years). You cannot make deposits or withdrawals to the account during this term.<br />
Check: A written contract between you <strong>and</strong> your bank. When you write a check, you are asking the bank<br />
to take money from your account <strong>and</strong> give it to someone else.<br />
Checking Account: An account that allows you to write checks to pay bills <strong>and</strong> buy goods. The financial<br />
institution will send you a monthly statement that lists the deposits, withdrawals, <strong>and</strong> purchases you made.<br />
Check Register: A booklet to write down all of your deposits <strong>and</strong> withdrawals from your account,<br />
including any fees <strong>and</strong> monthly charges.<br />
Collateral: The security you provide the lender.<br />
132
Change language