Terms Flashcards
Amortization period
Number of years it takes to pay entire mortgage
Asp(automatic savings program)
A plan in which you arrange to have selected amount of money transferred automatically from your bank account to a saving account or registered retirement saving plan (rrsp) on a recurring basis such as weekly, biweekly, or monthly
Balanced fund
A type of mutual fund that holds a mix of fixed income , equity and cash equivalents .
Bank draft
Money order (it’s like cash )
Beneficiary
Person who has been designated to receive money or other benefits. Extra: Depending on the situation this might include names on a will , person designated in life insurance policy or a child you name to receive the funds from a registered education savings plan when they attend a post secondary school .
Bond
A way for governments and companies to borrow money. In return the issuer promises to pay the holder a specific amount of interest for a specified length of time and to repay the loan on its maturity .
Business number
9 digit number issued by Canada revenue agency (CRA) as identification in dealings with CRA such as payroll , corporate income tax or collecting GST/HST
Canada education savings grant (CESG)
A federal government grant deposit e automatically into a registered education savings plan(RESP) equal to 20% on the first &2500 of the annual RESP contribution to a maximum grant of $7200 per child . Additional grants of 10% or 20% on the first $500 of annual contributions are available for qualifying families (based on family income)
Canada learning bond
A federal government grant , paid directly into an RESP , available to families with modest income to help them pay for post secondary education for their children born after 2003
Canada pension plan(CPP)
a social program operates by the Canadian government that provides retirees with a pension income when they retire based on their contribution till the plan during their working years . It also provides retirees and their dependants with basic financial protection if the retirees becomes disabled or dies .
CRA(Canadian revenue agency)
The department of the government of Canada that is responsible for financial areas such as tax law and many social and economic Benefit programs in Canada
Capital gain(loss)
The difference between the cost of an asset and the proceeds received from the sale of an asset .
Closed-end lease
A rental agreement in which you are not obliged to purchase the item leased when the term of the lease is complete .
Closed mortgage
A mortgage which cannot be prepaid , renegotiated or refinanced prior to the expiry of the term. You will pay a prepayment charge if you wish to renegotiate your interest rate or pay off your mortgage balance prior to the end of its term. Usually offered at a lower rate than a more flexible open mortgage.
Closing costs
The various fees or one time costs needed to complete or “close “the purchase of a home. standard closing costs include adjustments for prepayments of taxes , utilities and condominium common expenses ,if any, made by the vendor ; property land transfer taxes; property insurance; legal/notary fees.
Co-applicant
A second person named in addition to the primary person requesting a credit card/ mortgage or loan and is equally responsible for the payments and money borrowed.
Common shares
An ownership stake in a company that gives you the right to vote in decisions regarding how the company is run.
Compounding
Investment income that is earned in previously earned investment income”income on income” increases your rate of growth over time
Contents insurance
Renters or tenants insurance
Convertible mortgage
A fixed rate or variable rate mortgage which offers the same benefits as a closed mortgage but which can be converted to a longer closed mortgage at any time without pre-payment charges
Corporation
A company that is structured as a separate legal entity from it’s owners. A corporation May be privately or publicly owned
Credit bureau report
Your credit history is compiled by Canada’s central credit bureaus . When a bank or utility considers an application for credit or an account , it will request the applicants credit report .
Credit history
A list of facts gathered from financial institutions retailers and other lenders about how you have handled credit in the past. Most of this information stays in your file for seven years this information forms a profile of your credit-worthiness called your credit rating . Your credit rating ha hard to help banks and other companies to decide sheathed they will allow you to borrow money and how much.
Earnings
A company’s revenues minus its costs if sales operating expenses and taxes , over a period of time (such as a year or quarter year.) personal earnings are money a person receives from a job (including regular and overtime pay, vacation pay , commissions and tips) or investments , but not from social assistance programs or personal savings ,
Employment insurance
A government or Jean that provides temporary benefit payments to employees who cannot work because of layoff , because they are upgrading their skills or looking for work or who are sick pregnant or caring for a newborn or adopted child . Premiums for EI are deduced from the employees paycheque .
Equities
Shares issued by a company that reso resent an ownership stake in that company
Equity funds
Mutual funds that invest in shares of public corporations . They may have a particular focus such as small companies or companies within a sector such as technology or natural resources.
Expenses
Everyday living costs , such as rent/ mortgage , food , heating , electricity, transportation , clothing and dept repayment
Financial planning
The process of creating a strategy to reach your future goals taking into account what you own, what you owe and what you expect to earn in the intervening years
Financing
Arrangements usually in the form of some type of loan or credit , to secure funds so that a person can make a purchase .
Fixed income fund
A mutual fund that invests in depth instruments that lag predetermined amounts on a regular basis such as government or corporate bonds or mortgages
Goods and services tax (GST)
A federal tax (currently %5) applicable on the sale of most goods and services in Canada . It is collected by the vendor on behalf of the government .
Growth fund
A mutual fund whose primary objective is to generate capital appreciation over time . These funds typically hold equities (stocks)
Guaranteed investment certificate (GIC)
A type of deposit investment that guarantees the investment principle and usually pays a predetermined rate of interest for a specified amount of time (the term)
Harmonized sales tax (HST)
A tax in goods and services applicable on sale that reflects both the federal goods and services tax (GST) and provincial sales tax . HST exhausts in the provinces of New Brunswick, Nova Scotia and Newfoundland and Labrador
High interest savings account
A bank account that pays rate of interest on the balance that is higher than ordinary savings accounts
Hold
A preset waiting period once you deposit a cheque to ensure that the cheque has “cleared” (the issuers account has sufficient funds ) before you can access the money. The length of the waiting period can vary depending on the location of the issuing financial institution. NOTE however , that hold provides no garbage that a cheque will not be returned for any reason after the hold period has expired . Clients are responsible for any cheque they deposit that is returned to us whether or not the hold period has expired
Home buyers plan (HBP)
A program of the federal Canadian government that lets first time home buyers withdraw money from their registered retirement savings plan (RRSP) to buy or build a qualifying home. Some restrictions apply .
Home equity
The current market value of your home less any outstanding mortgages , representing the portion of the homes value that you own . Ei if your home is worth $300,000.00 and the mortgage is $125 000.00 your equity is $175, 000.00
Homeowners insurance
Type of insurance that protects the insured from the financial consequences of loss or damage to his or her home and it’s contents caused by we: theft , fire or other covered loss . A homeowners policy also provides coverage against liability claims in case an insured injures another person or causes damage to their property .
Host program
A Canadian government program that matches newcomers with a Canadian family or individual
Immigrant loans program
A Canadian government program that provides loans to government assisted or privately sponsored members of the convention refugees abroad , country of asylum and source country classes ti he’ll pay for overseas medical exams , travel documents and transportation to Canada .
Income fund
A type of mutual fund whose primary objective is to generate regular income by investing in bond , preferred shares , income trusts and other assets that provide regular cash flow .
Income tax
Money collected by the federal and provincial governments that have used to fund government programs and seniors for all Canadians . The amount you pay is based on the amount of money you earn .
Income tax return
A form that a person files each year to the Canadian revenue agency (CRA) that states the amount of earnings investment and other income as well as eligible deductions to reconcile the amount that he or she has actually paid in income tax with the amount owning or owed .
Interact
RBC CLIENT CARD HOLDERS MAY USE ANY ATM OR DIRECT PAYMENT MACHINE BEARING THE INTERAC SYMBOL
Interest rate
The rate of return the lender receives for permitting the borrower to use money for a specified term. The interest rate us usually expressed as an annual rate . The compounding frequency (for example ,semi-annual compounding)
Insurance
A contract in which a person agrees to pay a certain amount of money to a licences insurance company in exchange for financial protection against losses of a particular type (such as health , life or property ) if damage injury or loss occur within established circumstances.
Insurance premium
The amount that you pay to the insurance company usually monthly or amiably in exchange for financial protection in the stated circumstances
Investment
Money that a person uses with the expectation of receiving income or profit.
Investment risk
The possibility that a persons investment returns Mah not be as high as expected or that he or she may lose some of the original investment
Investor profile
An analysis of a person as an investor , including his or her comfort with risk investment goals and the length of time he or she plans to invest .
Laddering
A strategy for purchasing fixed-income investments such as bonds or GIC’s so that the maturity dates are staggered
Lease
An agreement under which a person pays a monthly amount for the right to use a specific asset , such as a car ,for specified length of time .
Life income fund (LIF)
A fund that turns pension funds within a locked-in retirement account (LIRA) into Pension income , with a maximum annual value based on a percentage of the funds value .
Life insurance
A policy that or idea a Benicia payment to the insured named beneficiary or beneficiary’s in the event if the covered death of the insured person.
Lifelong learning plan
A plan from the federal government which allows you to borrow funds from your registered retirement savings plan (RRSP( to finance training for yourself or your spouse or common law partner .
Line of credit
A type of credit that offers a person immediate access to part or all ignore-determined amount of cash upon demand. A line of credit Mah be either unsecured or secured with personal assets such as bonds , term deposits or equity in a home. A secured line of credit results in a lower rate of interest for the borrower .
Loan
An agreement under which a borrower receives cash from a lender (often a bank) for a predetermined length of time at a given interest rate, generally with a stated repayment schedule . The principal must be paid back at a specified future date. Interim payments may consist of interest only or a blend of interest and principal . With a fixed rate loan the interest rate stays the same for the term of the loan . With a variable-rate loan. The interest rate changes with market rates.
Market linked
Investments that provide a return based on increases in equity markets while protecting your capital.
Maturity
The end of an investment period or loan term . For example , the lash dah of the term of a mortgage agreement or the length of time until the principal amount of a bond must be repaid .
Money market fund
A type of mutual fund that invests in short term government hashed debt and other low risk cash-equivalent investments
Money orders and bank drafts
A way of making secure payment . The money order or bank draft is purchased from the bank and issued to the vendor .
Mortgage
A loan secured by real property typically a home
Mortgage pre-payment options
Additional principal payments you make to your mortgage prior to the maturity date . These payments are beyond your scheduled repayments in order to help repay the loan more quickly .
Mutual fund
A portfolio of investments managed by professionals on behalf of a number of investors who own “units” in the fund
National child benefit (NBC)
A monthly benefit paid by the federal a government to help low-income families with children .
Net pay
The amount of income from employment remaining after deductions such as income tax, Canada /Quebec pension plan contributions and employment insurance premiums
Non-redeemable investments
Investments that cannot be withdrawn before the maturity date .
Non registered investments
Investments held out side of a tax-deferred plan registered with the Canada revenue agency .
Notice if assessment
A statement the Canada revenue agency mails to people Asher they file an income tax return which summarizes earning the amount of tax owing or owed registered retirement savings plan (RRSP) contribution room and other details.
N.S.F ( non-sufficient Funds) cheque
When a cheque is written for an amount that exceeds the funds available in the account , the item is marked “NSF” to indicate that there are insufficient funds . A penalty is charged for NSF items .
SRF
Service reference file number
