Financial Lit C2L3-5 Savings & Interest Vocabulary

Front

savings account

Back

an account on which a bank pays interest for the use of the money deposited

Front

interest rate

Back

the proportion (or percentage) of the balance that will be paid for the use of money

Front

annual percentage rate (APR)

Back

the yearly interest rate being paid

Front

simple interest

Back

interest that is based only on the original principal

Front

simple interest formula

Back

I = Prt

in which I = interest; p = principal; r = annual interest rate (as a decimal); t = time (in years)

Front

minimum balance

Back

the amount required in an account to avoid fees

Front

statement savings

Back

a savings account where the owner receives a monthly statement showing all activity on the account

Front

money market account

Back

a higher interest savings account that usually requires a higher initial deposit and minimum balance

Front

certificate of deposit (CD)

Back

a savings account where there is a guaranteed interest rate paid over a specified time period; no deposits or withdrawals without penalties

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maturity

Back

the specified date that a financial transaction ends