A not-for-profit financial cooperative owned by its members. One is eligible to join a particular credit union if he or she belongs to the field of membership defined in its charter. All members have the right to democratically elect a board of directors. The board gives the credit union's management and staff general instructions. Historically, credit unions encourage thrift among members and provide them with credit at a low rate.
An account that permits withdrawals of money on demand of a signed instrument. Also called a transaction account or demand account.
A retirement plan created by the US government to encourage people to save for their own retirement. Benefits include tax-deferred growth and, depending on the type of IRA, tax deductibility or tax-free withdrawal. There are several qualifications and limitations as to who may contribute and when withdrawals may be made.
The earnings on securities or other investments, whether they are dividends or interest, realization of profits or receipts, income, or some other source.
1. Money placed into a savings account at a financial institution. 2. Money given to a seller as proof of intention to buy a piece of property; also called a down payment. 3. To deposit funds into an account.
Termination of employment due to age, choice, or physical limitation. Certain benefits, such as Social Security payments, are available to those who retire. In finance, retirement is the paying of a debt when or before it is due.
An amount of money that credit unions set aside by law to insure their members' money against loss. Similar to Federal Deposit Insurance Corporation insurance on bank and savings and loan accounts.
A plastic card that allows the owner to borrow money or buy products and services on credit with his or her signature. The lender that issues the credit card puts a dollar limit on its use, depending on the borrower''s creditworthiness.
Money that has been borrowed from a creditor (lender) by a debtor and that must be repaid. Loans may also be referred to as liabilities.
Having a favorable credit rating.
1. An entity that engages in commercial activities in some particular sector, such as industry, retail, or professional services. 2. The commercial activity in which a business engages.
A contract in which one party, called the insurer, agrees to protect another party, called the insured, against loss, damage, or medical costs in return for a premium. Another way to look at insurance is to see it as the assumption of risk by another party. In return for a periodic fee (the premium) and a set of requirements by which to abide, an insurance company will assume risks taken by those covered. Insurance companies are regulated by the insurance commissioners of their respective states or territories.
The purchase of a potentially appreciable asset such as a stock, a bond, a property, or a unit of production. The purchase provides funds for the growth of businesses and governments.
A system that guarantees that people who deposit their money in a financial institution are protected if the institution fails. Depending on the type of account and ownership, this protection totals $100,000 or more. Two government agencies provide this type of coverage: the National Credit Union Administration insures credit unions, and the Federal Deposit Insurance Corporation covers banks. Some financial institutions buy similar coverage from private insurers.
An investment document that a corporation, government, or other organization issues as proof of debt or equity. Also, the debt or equity itself.
Portion of a company's capital owned by a party and represented by the number of shares possessed. Stock represents equity in a company. There are many types of stock--for example, blue-chip, common, preferred, and growth.
A legal document that is a promise to repay borrowed principal along with interest on a specified schedule or certain date (the bond's maturity). Federal, state, and local governments, corporations, and other types of institutions raise capital by selling bonds to investors.
A fund that is owned by many investors and that sells its shares to the public on a continuous (open-ended) basis. Mutual funds place their money in a variety of stocks, bonds, and other investments. Advantages of investing in mutual funds include diversification and professional money management.
A business, with a state or federal government charter, that provides services such as paying interest on deposits, issuing and collecting checks, and making loans, especially to businesses. Shareholders receive part of a bank's profit as a return on their investment in the bank, represented by the stock that they've purchased.
The medium of exchange used in trade or commerce.
