Financial Terms Vocabulary

Vocabulary flashcards covering key personal finance, banking, and investment concepts from the transcript.

ATM

Automated Teller Machine; an electronic banking outlet that allows customers to complete basic transactions without a teller.

Certificate Of Deposit (CD)

A savings product offered by banks that pays a fixed interest rate in exchange for holding a deposit for a specified term.

Compound Interest

Interest calculated on both the initial principal and the accumulated interest earned from prior periods.

Deposit

Money placed into a financial account or institution for safekeeping or to earn interest.

Direct Deposit

An automated electronic transfer of funds directly into a recipient's bank account.

Federal Deposit Insurance Corporation (FDIC)

An independent U.S. government agency that insures deposits in member banks to protect consumer funds.

Inflation

A general upward price movement of goods and services in an economy over time, reducing purchasing power.

Interest

A fee charged for borrowing money, or earnings paid to an investor or depositor for the use of their funds.

Principal

The original amount of money borrowed, deposited, or invested, excluding interest.

Simple Interest

Interest computed solely on the original principal amount for the duration of the period.

Bond

A fixed-income security representing a loan made by an investor to a borrower, such as a corporation or government entity.

Diversification

A strategy of spreading investments across various financial assets to minimize overall risk.

Dividend

A portion of a company's earnings paid out directly to its shareholders.

Individual Retirement Account (IRA)

A tax-advantaged savings account designed to help individuals save for retirement.

Investment

An asset or resource acquired with the expectation that it will generate income or appreciate over time.

Risk

The potential for financial loss or uncertainty regarding the actual return on an investment.

Shareholder

An individual or entity that owns at least one share of a company's stock.

Security

A negotiable financial instrument that holds monetary value, including stocks, bonds, or options.

Social Security

A federal government program providing retirement, disability, and survivor benefits to eligible workers and dependents.

Stock

A security representing ownership in a corporation and a claim on a portion of its assets and profits.