5.01&5.02

principal

(of money) denoting an original sum invested or lent.

depository institution

A depository institution is a financial institution in the United States (such as a savings bank, commercial bank, savings and loan associations, or credit unions) that is legally allowed to accept monetary deposits from consumers.

compound interest

Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of interest to the principal is called compounding.

time value of money

DEFINITION of 'Time Value of Money - TVM' The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

interest rate

In business, economics or investment, market liquidity is a market's ability to facilitate the purchase or sale of an asset without causing drastic change in the asset's price.

liquidity

In business, economics or investment, market liquidity is a market's ability to facilitate the purchase or sale of an asset without causing drastic change in the asset's price.

savings account

Saving accounts (UK: savings accounts) are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money in the narrow sense of a medium of exchange (for example, by writing a cheque).

pay your self first

To pay yourself first means simply this: Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k)

certificate of deposit

a certificate issued by a bank to a person depositing money for a specified length of time.

checking account

an account at a bank against which checks can be drawn by the account depositor

interst

money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

saving

the money one has saved, especially through a bank or official scheme.

consumption

the using up of a resource.

savings tool

used to transfer funds deposited into an account to make a cash purchase

tiered interest rate

used to transfer funds deposited into an account to make a cash purchase