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canada goose Anyone who uses a bank should know these 10 terms Steve Nicastro , NerdWallet Mar. 25, 2015, 5:05 PM For all the bankers out there: These terms are important.Getty Images / Justin SullivanBanking is full of terms and concepts that can be difficult to comprehend, even for industry professionals. But with banking and finance such an important part of our daily lives, taking the time to learn some new phrases could yield profitable results. Here are 10 essential banking terms every consumer should know: 1. Compound interest To put it simply, this refers to interest paid on the returns your money earns, so that your principal balance grows at a faster pace. Compounding is an important concept to understand, as it can play a vital role in achieving long-term financial goals, like saving for retirement. 2. Prime rate This benchmark is the interest rate that banks and other financial institutions charge their best customers for loans. It is used to set interest rates for many other products, including home equity loans, adjustable-rate mortgages, lines of credit and credit cards. The prime rate is tied to the federal funds target rate, which is set by Federal Reserve policymakers and governs overnight interbank lending. This is an important gauge, because when it changes, so will the prime rate. 3. Escrow This describes money or a financial instrument held by a third party on behalf of two others engaged in a transaction. The most common example is during the purchase of a home


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