Bank interest refers to the cost incurred by a borrower for the privilege of using funds from a financial institution. This charge is calculated based on the daily cleared overdraft balance or a committed loan, with the interest rate typically consisting of the base rate plus an additional percentage ranging from 1% to 5%.
A financial institution traditionally engaged in accepting deposits and making loans for house purchases or improvements, predominantly found in the UK, Australia, South Africa, Ireland, and New Zealand.
A credit union is a not-for-profit financial institution, typically formed by employees of a company, a labor union, or a religious group, and operated as a cooperative.
A custodian refers to a bank or financial institution responsible for safeguarding the assets of a mutual fund, individual, or corporation. It also describes a person who manages the care of a facility or building.
Any organization whose core activity is to provide financial services or advice in relation to financial products. Financial institutions include state bodies, such as central banks, and private companies, such as banks, building societies, and financial markets.
A fund refers to a pool of financial resources managed and set aside for a specific purpose. Common types of funds include mutual funds, pension funds, and endowment funds, among others.
The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal. It also refers to the earning rate for deposits held in a financial institution.
A line of credit is an agreement between a financial institution and a borrower that allows the borrower to access funds up to an approved limit, providing flexibility in borrowing. It is not necessary to reapply each time funds are needed, but repayment is expected as the credit is used.
A loan commitment is an agreement by a financial institution to lend a specified amount of money on established terms in the future. This commitment outlines the conditions under which the loan will be provided and ensures the borrower of available funds when needed.
A financial institution similar to a Savings and Loan Association (S&L) but organized as a cooperative. It is owned by its members, with deposits representing shares. Members, as shareholders, vote on the association’s affairs and receive income in the form of dividends.
A Paying Agent is typically a bank or another financial institution that is contracted under a paying agency agreement to manage the payment of interest and principal sums due on a bearer security.
Savings and Loan Associations (S&Ls) are financial institutions that specialize in accepting savings deposits and making mortgage and other loans.
A Savings and Loan Association (S&L), also known as a building and loan association, is a financial institution similar to a savings bank, with a historical focus on providing home loans. In recent years, S&Ls have expanded their services to include a wider variety of loans.
A state bank is a financial institution that operates under a charter granted by the regulatory authority of a specific state, as opposed to a national bank, which operates under a federal charter.
A Time Deposit is a savings account or a Certificate of Deposit (CD) held in a financial institution for a fixed term or with the understanding that the depositor can withdraw only by giving notice. It offers a specified term and usually carries penalties for early withdrawal.
