buisness

Simple interest

Interest calculated only on the original amount of money.

Compound interest

Interest calculated on the original amount plus previously earned interest.

Regular savings account

A basic bank account that earns a small amount of interest and keeps money safe and easy to access.

Money market fund

A mutual fund that invests in safe short-term debt and aims to maintain a stable value.

Money market deposit account (MMDA)

An insured savings account that usually earns more interest than a regular savings account.

Interest

The cost of borrowing money or the payment earned for saving or lending money.

Principal

The original amount of money deposited invested or borrowed.

Inflation risk

The risk that rising prices reduce the purchasing power of money.

Opportunity cost

The value of what you give up when choosing one option over another.

Rate of return

The percentage gain or loss on an investment over a period of time.

Yield

The income earned from an investment over a set period.

Mutual fund

An investment that pools money from many investors to buy stocks bonds or other securities.

Stock

A share of ownership in a corporation.

Bond

A loan to a company or government that usually pays interest.

Return on investment (ROI)

A measure of an investment's profitability compared to its cost.

Liquidity

How quickly and easily an asset can be turned into cash without losing much value.

Investing

Buying assets with the expectation of earning income or profit over time.

Security

A tradable financial asset such as a stock or bond.

Coupon rate

The annual interest rate paid on a bond based on its face value.

Face value (Par value)

The stated dollar value of a security or the amount a bond is worth at maturity.

Bond discount

The amount a bond's market price is below its face value.

Brokerage commission

A fee charged by a broker for buying or selling securities.

Treasury bills (T-bills)

Short-term debt backed by the U.S. government and sold at a discount.

Savings bonds

Low-risk debt securities issued by the U.S. Treasury that earn interest.

Municipal bonds (Muni bonds)

Bonds issued by state or local governments to fund public projects.

Corporate bonds

Bonds issued by companies to raise money for business needs.

Market risk

The possibility of losing money because of changes affecting the overall financial market.

Dividend

A portion of a company's profits paid to its shareholders.

Capital gain

Profit made by selling an asset for more than its purchase price.

Capital loss

Loss from selling an asset for less than its purchase price.

Common stock

Ownership in a corporation that usually includes voting rights and may pay dividends.

Preferred stock

Ownership in a corporation that usually pays fixed dividends but typically lacks voting rights.

Stock broker

A licensed professional or firm that buys and sells securities for clients.

Buy and hold

An investing strategy where securities are bought and kept for a long time.

Day traders

Traders who buy and sell financial assets within the same trading day.

Series EE bonds

U.S. savings bonds that are guaranteed to at least double in value after 20 years if held that long.

An equity

A stock or other security representing ownership in a business.

Default

Failure to make required loan or bond payments on time.

Unrealized gains

Paper profits on assets that have not been sold.

Realized gain

Profit confirmed after an asset is sold.

Blue chip stocks

Stocks of large established financially stable companies with a history of reliable performance.

Regular Savings Account

A basic bank account that earns modest interest and keeps money safe and accessible.

Certificate of Deposit (CD)

A bank deposit with a fixed interest rate and maturity date that may charge penalties for early withdrawal.