More Financial Jargons | Financial Acronyms | Financial Terms Translation

More financial jargon translations

More financial jargon translations 750 400 Lorna Slee

Following on from our blog of last month where we provided some simple translations to the most common financial jargon, we have a few more that we wanted to share:

AIR
Assumed interest rate is the growth or percentage rate that an insurance or investment will grow over a 1-year basis.

APY
Annual percentage yield is the rate of interest that has been earnt from an investment over a 12-month period.

ATR
Ability to repay relates to an individual or business who has taken funding and has a commitment to ensure they meet repayment terms.

CD
A certificate of deposit is basically a form of savings account where a lump sum is deposited to generate interest for a fixed term, no withdrawals can be made during this time.

DDA
A demand deposit account is a bank account that can accrue interest on any money investment but also allows you to withdraw this money at any stage.

DTI
This is an evaluation of your debt-to-income ratio, basically it analysis your debt against the level of income you generate.

ETF
An exchange traded fund is a type of investment which contains stocks and bonds that are traded on the stock exchange.

HELOC
A home equity line of credit is a loan which is taken over an agreed period, but the collateral is secured against an individual’s home.

LOI
A letter of intent is an initial commitment outlining an understanding as to how one business would like to work with another business

MBS
A mortgage-backed security is when an asset is purchased which is secured through a collection of mortgages

NSF
Non-sufficient funds means a business does not have enough cash in its business to remain operational and therefore needs to look at securing funding.

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