Fundamental terms and concepts essential for understanding banking operations.
bank – a financial institution licensed to receive deposits and make loans.
deposit – money placed into a banking account.
withdrawal – the act of taking money out of a banking account.
interest – the cost of borrowing money, expressed as a percentage of the principal.
interest rate – the percentage at which interest is calculated on a loan or deposit.
principal amount – the initial size of a loan or investment before any interest added.
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check clearing – the process of moving funds from one account to another via a check.
Finally, two important words that have several meanings:
debit – an amount of money taken from a bank account.
debit – an entry recording an amount owed.
credit – an arrangement to receive goods, services, or money now and pay for them in the future.
credit – an entry recording a sum received.
Jakub Marian