banking terms

                                                         BANKING TERMS

Account Agreement: The contract governing your open-end credit account, it provides information on changes that may occur to the account.

Account History: The payment history of an account over a specific period of time, including the number of times the account was past due or over limit.

Account Holder: Any and all persons designated and authorized to transact business on behalf of an account. Each account holder's signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account.

Acquiring Bank: In a merger, the bank that absorbs the bank acquired.

Accrued interest: Interest due from issue date or from the last coupon payment date to the settlement date. Accrued interest on bonds must be added to their purchase price.

Adjustable-Rate Mortgages (ARMS): Also known as variable-rate mortgages. The initial interest rate is usually below that of conventional fixed-rate loans. The interest rate may change over the life of the loan as market conditions change.  There is typically a maximum (or ceiling) and a minimum (or floor) defined in the loan agreement. If interest rates rise, so does the loan payment. If interest rates fall, the loan payment may as well.

Arbitrage: Buying a financial instrument in one market in order to sell the same instrument at a higher price in another market.

Adverse Action: Under the Equal Credit Opportunity Act, a creditor's refusal to grant credit on the terms requested, termination of an existing account, or an unfavorable change in an existing account.