Listen. We know that banking terms can be confusing, so here at Rise we decided to make things a bit more comprehensible by creating our own Banking Glossary.
Letâs start off with the basics:
Recipient/Beneficiary: A person who receives money, for example a monthly allowance from Mum or Dad.
Bank transfer: A bank transfer involves the sending money from one bank account to another. You can do this with just a few quick taps on the Rise app đ
Automated teller machine (ATM): A machine that spits out cash or performs other banking services when an account holder inserts a bank card. So if you want to buy a pair of jeans with cash, youâll need to use an ATM.
Account balance: The exact amount of money in your account at the exact moment of checking. Need more? Maybe look into referring some friends to Rise to boost that balance. đ
Account: A banking service allowing a customer's money to be handled and tracked. (Insert Rise download link here). Hereâs an example of a great banking service - shameless self-plug. đ
Bank statement: A bank statement is a list of all transactions for a bank account over a monthly period. The statement lists all the money thatâs gone into and come out of your account as well as the beginning and ending balance for the period. So any âaccidentalâ AirPods purchases will definitely show up here. đ
Withdrawal: The process of taking money out of an account. You can do this instantly with Rise, or when using an ATM.
Not too hard to understand. Letâs ramp it up a notch.
Debit Card: A small plastic card that allows its owner to transfer money electronically from their bank account when buying something. Not to be confused with a credit card.
Credit Card: Another small plastic card issued by a bank that allows the holder to purchase goods or services on credit.
Currency: A system of money in general use in a particular country. If youâre travelling abroad, you can use your card with no extra costs when in another country. âïž
Spending limit: The monthly, weekly or daily maximum amount of spending per account based on the limits set by your parents.
Savings account: A savings account is a basic type of bank account that allows you to deposit money, keep it safe, and withdraw funds, all while earning interest. So the more money you can save and put in this account, the more money youâll be able to use and spend (or save) in the future. Itâs as close to free money as youâll ever get. Pretty cool right? đ
Grab a snack - weâre getting into the real technical stuff.
European Central Bank (ECB): The big guys; the central bank for the Euro. The ECB administers monetary policy of the Eurozone, which consists of 19 EU member states and is one of the largest currency areas in the world. The central bank helps in keeping the European markets stable and afloat, so us guys can spend that hard-earned coin more confidently.
Overdraft: An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. Big Yikes.
Creditor: A creditor is a person to whom money is owed or someone who provides credit - you always have to pay credit back.
Debt: A sum of money that is owed or due. Debts always have to be cleared - Facts.
Interest: Interest is the money you either owe when borrowing or are paid when lending money. When you owe interest, it's calculated as a percentage of the loan (or deposit) you've taken. You earn interest when you lend money or deposit funds into an interest-bearing bank account.
Interest rates: In simple terms, an interest rate is a rate charged by a lender of money or credit to a borrower. From the borrowerâs point of view it is the âextra costâ of borrowing, and from the lenderâs point of view it is the reward for lending. Annual Percentage Yield (APY): APY is the amount of money that you earn in one year on money that you deposit into a savings account. The higher the APY, the more return you get on your money.
Annual Percentage Rate (APR): APR is the total cost of your borrowing for a year. It is an annual rate of interest charged to a person that is borrowing money. Again, the higher the APR, the more money you give back on top from your original loan. Compound interest: Simply put, interest that you earn on interest. So if you put âŹ1000 into a savings account with a 5% APY, in one year you'd have âŹ1050, the next year âŹ1102.5, etc.
International Bank Account Number (IBAN): An IBAN is an international numbering system for bank accounts around the world. It is a code of up to 34 characters, used to identify individual accounts. CVV/CVC code (Card Verification Value/Code): A CVV is the three or four-digit number on your card that adds an extra layer of security when making purchases.
There you have it. Youâre on your way to early speaking the banking lingo.