A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Savings AccountA bank account meant for storing money you don't need right away, usually paying a small amount of interest on the balance.
- APY (Annual Percentage Yield)The real yearly return on a deposit, including the effect of compounding, which makes it the fairest way to compare account rates.
- InterestThe money a bank pays you for keeping deposits, or the money you pay a lender for borrowing, calculated as a percentage of the balance.
- Money Market AccountA deposit account that blends savings and checking features, often paying higher interest while allowing a limited number of checks or transfers.
- Early Withdrawal PenaltyA fee a bank charges when you take money out of a certificate of deposit before its agreed-upon maturity date.
- CD LadderA strategy of splitting money across certificates of deposit with staggered maturity dates so some cash frees up at regular intervals.
More in Banking
Account NumberAccount ReconciliationACH TransferAPR (Annual Percentage Rate)ATM (Automated Teller Machine)ATM Fee
Plain-English education — not personalized legal, tax, or investment advice.