Banking

Cash

Money in coins and banknotes

Currencies

The dollar, the euro, the yen etc.

Deposits

Money placed in banks and other savings institutions

Credit

Money available in the banking system for individuals and businesses to borrow

Loan

Money borrowed from a bank

Mortgage

Money borrowed from a bank to buy property or real estate

Debt

Borrowed money that has to be paid back

Wages

A fixed amount of money earned for a week’s manual work

Overtime

Money received for working extra hours

Salary

A fixed annual amount of money paid to an employee in monthly instalments

Bonus

Extra money paid to employees for good financial results

Commission

Money paid to salespeople and agents depending on the amount of goods sold

Fees

Money paid to lawyers, architects, auditors etc. for professional services

Social security, welfare

Money paid by the government to unemployed and sick people

Pension

Money paid by the government or a former employer to a retired person

Capital

The money needed to start a company

Fund

The money that will eventually be used to pay pensions is kept in it

Budget

Estimated expenditure and income is often written down in there

Rent

Money paid for the use of a house or flat

Commercial banks

Receive and hold customers’ deposits in current and savings accounts, pay money according to customers’ instructions, lend money to individuals and small businesses

Investment banks

Give financial advice to large companies, raise capital for them by issuing stocks and bonds, orhanize mergers and takeovers etc.

Building societies

Receive customers’ deposits and lend mortgages to buy homes

Private banks

Manage the assets of rich people or high net worth individuals

Clearing banks

Pass cheques and other payments through the banking system

Islamic banks

Do not pay interest to depositors or charge interest to borrowes, for religious reasons, but invest in companies and share the companies’ profits with the bank’s depositors

Microfinance banks

Provide financial services and make very small loans to poor people in developing countries, to help them set up in a business

Insurance companies

Provide financial protection against loss, offer life insurance etc.

Mutual funds

Investment companies that pool money from many investors and invest it in stocks, bonds and other securities

Hedge funds

Private investment funds for wealthy investors that use high-risk, speculative strategies that are not used by ordinary mutual funds, in order to achieve higher returns

Lender of a last resort

A bank that will lend money to financial institutions in difficulty if no other bank will

Bond

An interest-paying debt certificate issued by governments or companies to raise money

Interest

The price paid for borrowing money, paid to the lenders

Money supply

The total amount of money in circulation in an economy

Takeover

When one company acquires or buys another one

Merger

When two companies join together

Direct debit

An instruction to a bank to pay a fixed or variable amount to a specified beneficiary at regular intervals

Standing order

An instruction for a bank to pay a recurring fixed amount to a specified beneficiary at regular intervals

Overdraft

An arrangement by which a bank customer can run up a debt to an agreed limit

Savings account

An interest-paying bank account, usually with restrictions on when money can be withdrawn

Phishing

Attempts to acquire information from bank customers by sending fraudulent emails

Syndicate

A group of banks involved in a large transaction

High net worth individual

A person with a lot of investable asstes, often defined as being over US$1 milion

Collateral

Assets that secure or guarantee a loan

Spread

The difference between two prices (a buying and a selling price)

Blue-chip company

Large business with a good reputation and a long record of being profitable

Creditworthiness

An estimation of a borrower’s present and future solvency

Credit rating

A professional estimation of a company’s ability to pay its debts

Discount rate

A minimum interest rate at which the central bank make secured loans to commercial banks

Prime rate

The lowest rate that commercial banks charge, to lend money to blue-chip companies