Learn
Money words, simply
275 money terms, each explained in a sentence or two. No jargon to explain the jargon.
A18 terms
- Account aggregation
- Bringing balances and transactions from many banks and cards into one view, which is what Richwise does when you connect accounts.
- Accrued interest
- Interest that has built up but has not been paid or charged yet.
- Active investing
- Picking individual investments or timing the market to try to beat its average return. It usually costs more than passive investing.
- Adjustable-rate mortgage (ARM)
- A US mortgage whose interest rate can change after a set period, so payments can go up or down.
- Adjusted cost base (ACB)
- In Canada, what you paid for an investment plus costs like commissions. It is used to work out your capital gain or loss when you sell.
- Amortization
- Paying off a loan through regular payments over time. Early payments are mostly interest; later ones are mostly principal.
- Amortization period
- The total time it would take to pay off a mortgage in full, often 25 or 30 years.
- Annual fee
- A yearly charge for holding a credit card or account, whether or not you use it.
- Annual percentage rate (APR)
- The yearly cost of borrowing, including interest and some fees. A lower APR means a cheaper loan.
- Annual percentage yield (APY)
- The yearly return on savings once compounding is included. A higher APY means your money grows faster.
- Annuity
- A contract, usually with an insurer, that turns a lump sum into regular payments, often for the rest of your life.
- Appreciation
- An increase in the value of something you own, such as a home or an investment.
- Asset
- Anything you own that has money value: cash, investments, a home, a car or a business.
- Asset allocation
- How your investments are split between types such as stocks, bonds and cash. It drives most of your risk and return.
- Auto-enrollment
- When an employer signs you up for its retirement plan automatically. You can usually change the amount or opt out.
- Automatic savings
- Having money moved to savings or investments on a schedule, usually on payday, so you never have to remember.
- Avalanche method
- Paying off debts from the highest interest rate to the lowest. It saves the most interest overall.
- Average daily balance
- The average amount owed or held in an account across a billing period, often used to calculate interest.
Education, not financial advice. Rules and limits for accounts change, so check the CRA or IRS for current figures.