Tips and Tools For Financial Success - Newton Free Library

Stocks: Parts of a company, called shares. If the company does well, you might receive periodic
dividends based on the number of shares you own. Dividends are part of a company’s profits that it gives
back to you, the shareholder.
Substitute Check: An electronic image of your check that has the same standing as the actual check.
Thrift: A financial institution that operates under federal and state laws and regulations. Thrifts make
loans, pay checks, accept deposits, and provide other financial services.
Traditional Individual Retirement Arrangements (IRAs): Contributions to a traditional IRA
may be tax deductible, based on the amount of your contribution and your income. The earnings on the
amounts in your IRA are not taxed until they are distributed.
Transaction: A banking activity (e.g., depositing or withdrawing money, using your Automated Teller
Machine (ATM) or debit card, or having checks direct-deposited into your account).
Treasury Inflation-Protected Securities (TIPS): Provides protection against inflation, and the
interest rate is tied to the Consumer Price Index.
Truth in Savings Act (TISA): An act that requires financial institutions to tell you the terms of
consumer deposit accounts (e.g., checking or savings accounts). It also requires the bank to periodically
send you statements for your accounts.
Unsecured Loan: A loan not backed by collateral. Credit cards are often unsecured loans, although
some are secured by a bank account.
U.S. Savings Bonds: A long-term investment option backed by the full faith and credit of the U.S.
Government. Savings bonds can be purchased at a financial institution for as little as $25 or through
payroll deductions.
U.S. Treasury Securities: Loans to the U.S. Government for a certain period of time, called a term.
Treasury securities are backed by the full faith and credit of the U.S. Government and include Treasury
bills (T-bills), notes (T-notes), and bonds (T-bonds).
Variable Annuity: An insurance contract that invests your premium in various mutual fund-like
investments.
Variable rate: An interest rate that may change during the loan term.
Withdrawal: The process of taking money from your bank account.
Wire Transfer: A form of money transfer from one bank to another.
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