Banking Terms and Their Full Forms
Banking is a complex and ever-evolving industry, with a wide range of terms and acronyms that can be confusing to newcomers and experienced customers alike. This article provides a comprehensive overview of some of the most common banking terms and their full forms, to help you better understand the banking world.
General banking terms
- ATM: Automated teller machine
- ACH: Automated clearing house
- AM: Asset manager
- APY: Annual percentage yield
- APR: Annual percentage rate
- BIC: Bank identifier code
- CAN: Cancel all notifications
- Cashier’s check: A check issued by a bank and guaranteed by the bank’s funds
- CD: Certificate of deposit
- Checking account: A type of bank account that allows you to withdraw money on demand
- Credit card: A type of payment card that allows you to borrow money to purchase goods and services
- Debit card: A type of payment card that is linked to your checking account and allows you to withdraw money or make purchases
- Direct deposit: A service that allows your paycheck or other recurring payments to be deposited directly into your bank account
- ETF: Exchange-traded fund
- FDIC: Federal Deposit Insurance Corporation
- IBAN: International bank account number
- IRA: Individual retirement account
- Lending institution: A financial institution that provides loans to individuals and businesses
- Line of credit: A type of loan that allows you to borrow money up to a certain limit
- Loan: A sum of money borrowed from a lender, which must be repaid with interest
- Mutual fund: A type of investment company that pools money from investors and invests it in a diversified portfolio of securities
- Online banking: A service that allows you to bank online, using a computer or mobile device
- Overdraft: A situation in which you withdraw more money from your checking account than you have available
- Routing number: A nine-digit number that identifies your bank
- Savings account: A type of bank account that allows you to save money and earn interest on your savings
- SWIFT code: Society for Worldwide Interbank Financial Telecommunication code
Investment banking terms
- IPO: Initial public offering
- M&A: Mergers and acquisitions
- Private equity: A type of investment that involves investing in private companies
- Underwriting: The process of guaranteeing the sale of securities
Commercial banking terms
- Business loan: A type of loan that is provided to businesses
- Commercial paper: A short-term unsecured promissory note issued by a corporation
- Letter of credit: A document issued by a bank that guarantees payment to a seller on behalf of a buyer
Regulatory banking terms
- Basel Accords: A set of international banking regulations designed to promote financial stability
- CFPB: Consumer Financial Protection Bureau
- FDIC: Federal Deposit Insurance Corporation
- OCC: Office of the Comptroller of the Currency
- SEC: Securities and Exchange Commission
This is just a small sample of the many banking terms and acronyms that are in use today. If you come across a term that you don’t understand, be sure to ask your banker or financial advisor for clarification.
