Wednesday, 28 December 2016

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Knowing more about bank duties

Banking is full of terms and concepts that can be difficult to comprehend. Even common ones have features that may not be obvious. But with banking and finance such an important part of our daily lives, taking the time to learn some new phrases  — or understand old ones better — could yield profitable results, according to
 Routing number: This is a nine-digit number that identifies your financial institution. Larger banks may have multiple routing numbers that are based on the geographic location where the account was opened.
APY: Annual Percentage Yield. The amount of interest you gain from keeping money in an account in a year, including compound interest.

Compound interest: Interest that applies to the original deposit as well as any newly earned interest. For example, if you put N100 in an account that earns compound interest at five per cent a year, in the next year you will earn five per cent on N105. Non-compounding interest will continue to earn five per cent on N100.

Savings account: Typically, an interest-bearing account used to hold money for short or long-term goals or emergencies. You can add to this account at any time, but certain types of withdrawals may be limited to six per month.
Overdraft fee: A fee incurred when your current account does not have enough funds to cover a payment that is requested. The financial institution will pay what your account lacks, after which your account may have a negative balance.
Current account: An account at a financial institution into which you can deposit money and from which you can write cheques for purchases. Most people use current accounts to receive their wages and pay their bills.
Banking may be awash in jargon, but understanding these essential terms should help you navigate through it and steer your finances in the right direction.


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