KEy Vocabulary Financial Intermediaries

Annuity

A type of investment where money is exchanged for series of equal payments over time. Payments can include interest on the original sum plus income from investment. Annuities are sold by life insurance companies and are often purchased to provide retirement income and shift the responsibility for investing to an investment company.

bond

A loan an investor makes to a government or corporation for a specified amount of time for the purpose of raising capital for the government or corporation. In return the investor receives the principal plus interest.

Capital

The financial resources that are used to make money, which can take the form of equity or debt.

financial intermediary

An institution that provides a service for those who have extra money to save lend and channels it to those who wish to invest or borrow.

mutual funds

Investment products that combine the money from a large group of investors to buy stocks and other investments.

pension funds

Financial products that specialize in gathering payments into retirement funds and investing those payments so that they can accumulate to provide income at retirement.

saving and loan associations

depository financial institutions that specialize in home mortgage loan.

Stock

A share of ownership in a company

Thrifts

Depository institutions that include savings and loans as well as savings banks. They specialize in saving account and real estate financing