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
- Certificate of Deposit (CD)A savings product where you lock money away for a fixed term in exchange for a set interest rate, paying a penalty if you withdraw early.
- 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.
- 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.
- 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.
- Savings AccountA bank account meant for storing money you don't need right away, usually paying a small amount of interest on the balance.
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.