Top 5 Common banking terms you need to be familiar with

banks in nigeria
Written by Austin Oni

When it comes to Banking terms and it’s concepts, many of us sometimes find them difficult to understand.

The industry professionals and experts are not left out of this too.

We all know that Banking is a vital part of our business and private life. It is really rewarding for us the masses to know common banking terms.

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Below, i ll be sharing with you some common banking terms you need to know.

The Book balance

This term simply means the total fund in ones account prior to any amendments for a cheque payment that is yet to be processed.

Ledger balance is another name for Book balance.

When cheque is deposited in a bank from other banks, it is not instantly available for withdrawal. It can take up to two to four days in many countries.

Time or fixed deposit

This is an agreement to save a specific amount in a bank for a particular period of time. One tend to make profit through a fixed rate of interest that will be paid.

Gross consequences are always faced by defaulters, as the interest will be reduced should the funds be withdrawn before the speculated time.

Inactive account

Dormant account is another name for Inactive account. This is an account which have been inactive over a period of time as the name implies.

The account has no transactions history for an average of a year either deposit or withdrawal.

A Debit card

This is plastic chipped card that is used in deducting money from a bank account through an automatic teller machine, P.O.S to buy or for the payment of goods and services.

Cost of funds

This is the interest rate being paid by any financial sector for the money they invented in their business or project.

It is one of the most vital inventing costs for a most banking sectors.

A lower cost is guarantee to yield more profits when the money are distributed in form of a short term and long term loans to the borrowers.

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About the author

Austin Oni

Carefree, Honest, Adventurous, Loving and an optimistic reporter

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