Reference

The amount of interest that has accumulated on a bond since the last time a coupon payment was made.

A mortgage with an interest rate that can change periodically based on the performance of a specific benchmark.

A home loan with an interest rate that can change periodically based on the performance of a specific benchmark.

Your total gross income minus specific subtractions like student loan interest or retirement contributions. It is used as the starting point for calculating your final tax liability.

The process of gradually paying off a debt over time through regular payments of principal and interest.

A detailed table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment.

A multiplier used by insurers to determine the amount of a regular payment based on interest rates and age.

Annual Percentage Rate represents the total yearly cost of borrowing money, including interest and fees, giving you a clearer picture of what a loan like a car payment will actually cost you over time.

Annual Percentage Yield is the amount of interest you earn on a savings account over a year, taking into account the effect of your interest earning more interest as it sits in the bank.

Adjustable Rate Mortgage is a home loan where the interest rate can change over time based on the market, meaning your monthly payment might go up or down after an initial fixed period.

Moving debt from one credit card to another, often to take advantage of a lower interest rate.

A unit of measure equal to one-hundredth of one percentage point, often used to describe changes in interest rates or yields.

A measure of the non-linear relationship between bond prices and interest rates.

A measurement of a bond's price sensitivity to changes in interest rates.

A flexible loan arrangement that lets a business borrow money up to a set limit as needed. Interest is generally charged only on the amount borrowed.

Unpaid interest that is added to the principal balance of a student loan, increasing the total amount on which future interest is calculated.

Credit Card Act of 2009 — A federal law that established fair and transparent practices for credit card companies regarding fees and interest rates.

A strategy where an investor borrows money in a currency with a low interest rate to invest in a currency with a higher interest rate.

A service provided by credit card issuers allowing cardholders to withdraw cash up to a certain limit, usually at a high interest rate.

A type of pension plan where the employer credits a participant's account with a set percentage of their yearly compensation plus interest.

Certificate of Deposit is a type of savings account where you agree to leave your money untouched for a set period, like one year, in exchange for a higher interest rate than a standard savings account.

A strategy of buying multiple certificates of deposit with different maturity dates to maintain liquidity and capture varying interest rates.

An institution that manages the currency, money supply, and interest rates of an entire nation. It also oversees the commercial banking system and acts as a lender of last resort.

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

A single new loan used to pay off multiple existing debts, typically intended to simplify payments or secure a lower interest rate.

A short-term, higher-interest loan used to cover the costs of building a home or other real estate project.

A policy used to slow down economic growth or combat inflation by decreasing the money supply and raising interest rates.

A policy used to slow down an economy that is growing too fast or to curb rising inflation. It involves raising interest rates or reducing government spending to decrease the money supply.

A measure of the relationship between bond prices and interest rates that accounts for how the duration changes as yields change.

The annual interest rate paid by the issuer of a bond to the bondholder.

The possibility that a borrower or bond issuer will be unable to make their required interest or principal payments.

A situation where increased government borrowing to fund spending leads to higher interest rates. This can reduce private sector investment as it becomes more expensive for businesses to borrow.

A strategy where an investor borrows money in a country with low interest rates to invest in assets that offer higher yields in another country. The goal is to profit from the interest rate difference while managing the risk of currency fluctuations.

A financial agreement where two parties exchange the principal and interest payments of a loan in one currency for those in another currency. It is often used by companies to reduce borrowing costs or manage exposure to exchange rate fluctuations.

A debt repayment strategy where you focus on paying off the debt with the highest interest rate first to save money over time.

A debt repayment strategy where you pay off debts with the highest interest rates first to minimize total interest paid.

The process of raising capital by borrowing money from a lender that must be repaid with interest over time.

A process where a borrower and lender negotiate new terms for existing debt, such as changing interest rates or extending the repayment period to avoid default.

A temporary postponement of loan payments during which interest may not accrue on some types of federal loans.

A federal loan for undergraduate students with financial need where the government pays the interest while the student is in school.

A federal loan available to both undergraduate and graduate students regardless of financial need, where interest starts accruing as soon as the loan is issued.

Optional fees paid to a lender at closing in exchange for a lower interest rate on a mortgage.

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility. It influences other interest rates in the economy.

A term describing policymakers who favor lower interest rates to encourage economic growth and employment.

A measure used to estimate how much a bond's price is likely to change if interest rates rise or fall.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, which is a way to look at how much cash a company is actually generating from its core business operations. It helps investors see the 'raw' profit of a company before accounting tricks or financing costs get in the way.

A loan or lease specifically designed to help business owners purchase expensive machinery, vehicles, or technology. The equipment itself typically acts as collateral for the debt, which can result in lower interest rates.

A Coverdell Education Savings Account is a special tax-free savings account designed to help you set aside money for a child's future education costs. It is like a piggy bank that the government helps grow by not taxing the interest you earn, provided you use the money for school expenses.

A policy used by a central bank to stimulate the economy by increasing the money supply and lowering interest rates.

A macroeconomic policy that seeks to expand the money supply to encourage economic growth. This is usually achieved by lowering interest rates or increasing government spending.

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight. It is the target rate set by the Federal Reserve to guide monetary policy.

A person or institution legally obligated to act in the best interest of another party, such as an executor or manager.

The legal and ethical obligation of a retirement advisor or plan administrator to act solely in the best interest of the plan participants.

A contract with an insurance company that guarantees a minimum interest rate and a fixed, predictable payment amount.

An insurance contract that pays interest based on the performance of a market index while protecting the principal from market losses.

An interest rate that remains constant for the entire duration of a loan or investment term.

A loan where the interest rate remains constant throughout the entire term, ensuring predictable monthly payments for the borrower.

A home loan with an interest rate that remains the same for the entire life of the loan.

A bond or debt instrument with a variable interest rate that adjusts periodically based on a benchmark index.

An investment made by a company or individual in one country into business interests located in another country. It usually involves establishing operations or acquiring tangible assets.

An investment made by a firm or individual in one country into business interests located in another country, usually by establishing business operations or acquiring assets.

A form sent to taxpayers by lenders showing the amount of mortgage interest paid during the year for deduction purposes.

A form provided by lenders that reports the amount of interest paid on a student loan during the tax year.

The amount of time you have to pay your credit card bill in full before the company starts charging interest.

A term describing policymakers who favor higher interest rates to keep inflation in check.

A bond that has a lower credit rating and pays a higher interest rate because it carries a greater risk of default.

A type of savings account that typically pays a significantly higher interest rate than a standard savings account.

Capital that flows rapidly into or out of a country's financial markets in search of the highest short-term interest rates or speculative returns.

High-Yield Savings Account is a bank savings account that pays a much higher interest rate than a standard account, helping your money grow faster. It works exactly like a regular savings account at your local bank, but the bank rewards you more generously for keeping your balance there.

A benchmark interest rate used by lenders as a starting point to calculate the rate for variable-rate credit products.

A legal requirement stating that an individual must suffer a financial loss if the insured person or property is harmed.

The amount charged by a lender to a borrower for the use of borrowed money, usually expressed as a percentage.

The process where unpaid interest is added to the principal balance of a loan, which then increases the total amount owed.

The percentage of a loan amount that a lender charges a borrower for the use of assets.

The risk that an investment's value will decline as a result of a change in the general level of interest rates.

A financial account, such as a savings or checking account, that pays the account holder a percentage of their balance as interest.

A loan where the borrower is only required to pay the interest for a certain period, after which they must begin paying down the principal.

Specific expenses such as medical bills or mortgage interest that you list individually to reduce your total taxable income.

A flexible loan from a bank that allows you to borrow up to a certain limit and pay interest only on what you use.

A situation in which interest rates are so low that people prefer to hold cash rather than invest or spend. This makes traditional monetary policy tools ineffective at stimulating the economy.

Federal Student Loan Consolidation — Combining multiple federal education loans into one new loan with a single monthly payment and a fixed interest rate.

Student Loan Interest Deduction — A deduction that allows you to reduce your taxable income by the amount of interest paid on qualified student loans during the year.

Private Student Loan Refinancing — The process of taking out a new private loan to pay off existing student loans, usually to secure a lower interest rate.

Modified Adjusted Gross Income: This is essentially your total income after certain tax deductions have been subtracted, which the government uses to decide if you qualify for specific tax breaks or benefits. You can think of it as your 'official' income level for tax purposes, adjusted for things like student loan interest or retirement contributions.

The set number of percentage points a lender adds to an index rate to determine the final interest rate for a borrower.

The lowest amount of money you are required to keep in your bank account to earn interest or avoid monthly service fees.

The smallest amount of money a customer must keep in a bank account to avoid fees or earn interest.

Money Market Account: This is a type of savings account offered by banks that usually pays a higher interest rate than a standard savings account. It provides you with easy access to your money, often with limited check-writing or debit card features, making it a safe place to park cash while earning a little extra interest.

The actions taken by a central bank to manage the money supply and interest rates. Its goal is to achieve macroeconomic objectives like controlling inflation and consumption.

A type of savings account that usually earns higher interest and requires a higher minimum balance than regular savings.

An itemized deduction that allows homeowners to subtract the interest paid on a home loan from their taxable income.

Master Promissory Note: This is a legal contract you sign when taking out a student loan, stating that you promise to pay the money back along with interest. It is a one-time document that covers all your future loans for that specific program, acting as your formal 'I.O.U.' to the lender.

A situation where the monthly loan payment is less than the interest due, causing the unpaid interest to be added to the principal balance.

The interest rate on a loan or investment that has not been adjusted for inflation. it represents the actual percentage increase in the amount of money over time.

The total number of derivative contracts, such as options, that are currently held by market participants and have not been closed.

A short-term, high-interest loan designed to be repaid when the borrower receives their next paycheck.

A very high interest rate applied to a credit card account if the cardholder violates the terms of the agreement, such as by making a late payment.

The interest rate charged on a loan or credit account over a specific period, such as daily or monthly.

An acronym for Principal, Interest, Taxes, and Insurance, which are the four main components of a monthly mortgage payment. It represents the total periodic cost of owning a home under a mortgage.

Fees paid directly to a lender at closing in exchange for a lower interest rate on a mortgage.

The base interest rate that commercial banks charge their most creditworthy corporate customers, influencing consumer rates.

The original sum of money borrowed in a loan or the amount put into an investment, separate from interest.

A Qualified Terminable Interest Property trust is a legal arrangement that allows a person to provide income to their spouse after they pass away, while still controlling who eventually gets the remaining assets later. It is commonly used in estate planning to support a surviving spouse while ensuring that children from a previous marriage eventually inherit the property.

A form of monetary policy in which a central bank purchases large-scale financial assets from the open market. This is done to inject money into the economy and lower long-term interest rates.

A legal instrument used to transfer interest in real property without making any guarantees about the title's validity.

A refinancing of an existing mortgage to change the interest rate, the loan term, or both, without taking cash out.

The process of replacing an existing mortgage with a new one, typically to obtain a lower interest rate or different terms. This can help homeowners reduce monthly payments or access home equity.

The process of replacing an existing loan with a new loan that has different terms, usually to lower the interest rate.

The right to own and use a property after the person holding the life estate has passed away.

An options Greek that measures the sensitivity of an option's price to changes in interest rates.

A quick formula used to estimate how many years it will take for an investment to double at a fixed annual rate of interest.

A bank account where money is kept to earn interest and is generally not intended for daily spending.

Interest calculated only on the original amount of money borrowed or invested, not on any interest earned.

A provision in a trust that prevents a beneficiary from selling their interest and protects it from their creditors.

A process that combines multiple federal student loans into one single loan with a fixed interest rate based on the average of the previous loans.

A temporary postponement of loan payments granted under specific circumstances, during which interest may not accrue on subsidized loans.

A temporary pause or reduction of loan payments for borrowers facing financial hardship, during which interest continues to accumulate.

The act of taking out a new private loan to pay off existing student loans, usually to obtain a better interest rate.

A person with a low credit score who is considered a higher risk for lenders. Because of this risk, they are often charged higher interest rates on loans.

A loan offered to individuals with lower credit scores at higher interest rates to compensate the lender for the increased risk of default.

A federal student loan for which the government pays the interest while the borrower is in school at least half-time. These loans are based on financial need.

A price level where an asset tends to stop falling because of a concentration of demand or buying interest.

An interest in a property earned by the owner through labor or improvements they performed themselves rather than through financial investment. This often involves renovating or repairing a home to increase its overall market value.

Interest income that is not subject to federal income tax, often earned from municipal bonds.

A loan for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.

The Truth in Lending Act is a law that requires lenders to clearly show you the total cost of a loan, including interest rates and fees, so you can easily compare options before borrowing money.

A bank deposit that earns interest but requires the funds to remain in the account for a fixed term to avoid paying a fee.

A short-term, high-interest loan where the borrower uses their vehicle's clear title as collateral to secure the funds.

A marketable U.S. government debt security with a fixed interest rate and a maturity between one and ten years.

The Time Value of Money is the simple idea that a dollar you have today is worth more than a dollar you get in the future, because the dollar you have now can be invested to earn interest and grow over time.

A federal student loan where the borrower is responsible for all interest that accrues from the time the loan is issued. These loans are not based on financial need.

Regulations that set a maximum interest rate that can be legally charged on loans to protect consumers.

An interest rate on a loan or security that fluctuates over time based on an underlying market index.

A graph that shows the interest rates on bonds of different maturities, typically comparing short-term and long-term debt.

Yield to Maturity is the total profit you can expect to earn on a bond if you hold it from the day you buy it until the day it expires. Think of it like buying a gift card at a discount: if you pay $90 for a card worth $100 that expires in a year, your yield is the profit you make from that discount plus any interest earned over that time.

A macroeconomic problem that occurs when the short-term nominal interest rate is at or near zero, causing a liquidity trap.

A debt security that does not pay periodic interest but is traded at a deep discount.