Financial Terms



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- A - 

ACH Processing

Automated Clearing House - Processing that occurs between a national network of banks or financial institutions that send messages electronically, via telecommunications lines instead of paper (checks), to transfer funds between two parties. The most common form of ACH transactions are direct deposit, pre-authorized debits, cash concentration, and corporate-to-corporate payments.

Adjustable Rate -

An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

Adjustable Rate Mortgage (ARM) -

A mortgage loan in which the interest rate is subject to periodic adjustment up or down according to the movement of a pre-arranged index - such as the Cost of Funds Index or an institution's cost of providing savings accounts (see Interest Rate, Index, Fixed Rate Mortgage, Cost of Funds Index).

Affiliate -

An organization that is a parent or subsidiary of another organization or a subsidiary of a common parent. An organization may be an affiliate of another because of ownership, overlapping officers and directors, or other factors. For example, Pacific Trust Bank and First PacTrust Bancorp, Inc. are affiliates, because both are owned by First PacTrust Bancorp, Inc.

Aggressive Growth Fund -

An investment portfolio that seeks maximum growth by investing in stocks believed to have above-average growth potential, often those of small- or mid-sized companies. These investments can be extremely volatile, especially over short periods of time.

Amortization -

The repayment of a loan by making systematic payments that are applied to the loan's principal and interest over a set time period (see Principal, Interest). The amount you borrow is repaid gradually though regular monthly payments of principal and interest. During the first few years, most of each payment is applied toward the interest owed. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal.

Amortization Term -

The amount of time required to amortize the loan. The amortization term is expressed as a number of months. For example, for a 15-year fixed-rate mortgage, the amortization term is 180 months.

Annual Percentage Rate (APR) -

The annual cost to a borrower of consumer credit that has been calculated according to certain consumer laws (see Interest Rate). The relationship of the total finance charges associated with a loan. (Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Does not include title insurance, appraisal, and credit report). This must be disclosed to borrowers by lenders under the Truth-in-Lending Act (regulation Z). It is a function of the loan amount, the interest rate, the total added cost, and the terms. The APR would equal the interest rate if there is no additional cost to a given loan.

Annual Percentage Yield (APY) -

A percentage rate reflecting the amount of interest a savings account would earn over a one-year period at a given interest rate - if all interest and principal were left in the account to compound (see Interest Rate, Compound Interest). Reflects the total amount of interest paid on a deposit account, based on the interest rate and the frequency of compounding for a 365-day period.

Annual Percentage Yield Earned (Checking) -

For checking accounts that receive monthly statements, a percentage rate that reflects the amount of interest actually earned and the average daily balance during the period (see Interest Rate).

Annuitant -

The person during whose lifetime an annuity is payable. This is usually the person who receives the payments from an annuity (see Fixed Annuity, Variable Annuity).

Application Fee -

Fees that are paid upon application. An application fee may frequently include charges for property appraisal ($200-$400) and a credit report ($30-50). See also Glossary of Closing Costs.

Appraisal -

A fee charged by an appraiser to render an opinion of market value as of a specific date. Required by most lenders to obtain a loan.

Appraisal Report -

A written report by an appraiser containing an opinion as to the value of a property and the reasoning leading to that opinion.


(see Annual Percentage Rate)


(see Annual Percentage Yield)


(see Adjustable Rate Mortgage)

Asset Allocation -

A financial strategy that spreads an investor's assets across a number of different investment categories, such as domestic and foreign stocks, bonds and cash. Diversification has the potential to reduce overall investment risk.

Assumable Loan -

A mortgage loan that, by its terms, permits its obligations to be taken over (assumed) by a new owner of the real property who is not the original borrower.

Assumption of Mortgage -

An agreement by someone other than the original borrower to assume the obligations of a mortgage loan (see Mortgage, Lien).

Automated Clearinghouse (ACH) -

An electronic funds transfer network that enables direct money transfers between participating bank accounts and mutual funds or variable annuity investments.

Automated Teller Machine (ATM) -

A machine that allows a customer to perform common teller transactions. Transactions may include cash withdrawals and transfers. ATMs are generally accessible 24 hours a day, 7 days a week.

Automatic Investment Plan -

This service allows investors to invest automatically, by transferring money from bank or brokerage accounts at regular intervals.

Average Annual Total Return -

For a mutual fund, the average annual profit or loss realized by a fund at the end of a specified calendar period, assuming all dividends and capital gains are reinvested, stated as the percentage gained or lost per dollar invested.

Average Daily Balance - The average dollar amount that resides in an account over a specific period of time. The formula for calculating the Average Daily Balance is accomplished by adding the daily balances over a period of time and dividing by the total number of days in that period.

Average Maturity -

Bond investors can average the maturity dates of a portfolio's debt securities to come up with the portfolio's average maturity. Generally, the longer the average maturity, the greater the portfolio's sensitivity to interest-rate changes, which means more price fluctuation.

- B

Balance - Available -

The amount of money that can be withdrawn from a savings or checking account without any limitation. The available balance does not include funds on hold or interest not yet posted.

Balance - Current -

The amount of money in a savings or checking account, including funds on hold but excluding unposted interest.

Balanced Fund -

A fund that seeks both growth and income by investing in a combination of stocks and bonds. These portfolios may offer less growth potential, but they also tend to be less volatile than portfolios that invest only in stocks (see Volatility).

Balloon Payment -

A lump sum payment for the unpaid balance of the loan.

Bank Draft - A check drawn by one bank against funds deposited into its account at another bank, authorizing the second bank to make payment to the individ

ual named in the draft.

Bank Insurance Fund (BIF) -

One of the two separate FDIC deposit insurance funds generally covering insured deposits in banks and certain savings institutions (see FDIC).

Basis Point -

One one-hundredth of one percentage point (0.01%)

Bear Market -

A prolonged period of falling securities prices (see Bull Market).

Beneficiary -

A person for whose use and benefit property is held by another, such as by a trustee or an executor.


(see Bank Insurance Fund)

Biweekly Payment Mortgage -

A mortgage that features a bi-weekly payment that is approximately equal to about one-half of a regular monthly payment. The payments are then made 26 times a year, as opposed to 12 monthly full payments.

Blue Chip Stock -

The nickname for a nationally known, publicly traded company that typically has a long record of profit growth and dividend payment and a reputation for quality management, products and services.

Bond -

A debt security that obligates the issuer to pay the bondholder a stated rate of interest over a fixed period of time and repay the principal amount of the security at maturity.

Bond Ratings -

Assessments of the financial strength of a bond issuer. Rating agencies like Moody's or Standard & Poor's assign a particular ranking - from top-quality AAA to below investment grade D - to indicate the bond issuer's creditworthiness. Lower-rated bonds tend to pay higher interest rates.

Bookmark -

A link you can place on the Netscape Navigator pull-down Bookmarks menu. By clicking directly on a bookmark, you can access a Web page with one click (see Favorites).

Browser -

A software program on your computer that allows you to look at (browse) various kinds of Internet resources. The most widely used browsers are Microsoft Internet Explorer and Netscape Navigator. America Online uses a variation of Internet Explorer.

Bull Market -

A prolonged period of rising securities prices (see Bear Market).

Button -

An interactive icon or object used on a Web page to send information electronically or activate a link to another page. Another type of button, such as "send", "submit" or "confirm" forwards data to the Web site.

- C - 

Cap -

The maximum allowable increase, for either payment or interest rate, for a specified amount of time on an adjustable rate mortgage. See Adjustable Rate Mortgages for a complete guide.

Capital Appreciation -

When the value of an investment increases, this is "appreciation." Capital appreciation is the investment objective of growth-oriented mutual funds.

Capital Gain or Loss -

The difference between how much you paid for an investment and how much you sold it for.

Capital Gains Distribution -

Profits distributed to shareholders resulting from the sale of securities held in a portfolio for more than one year.

Cash Out -

(1) Receiving money back when refinancing your present mortgage. (2) The cash that a borrower can receive upon refinancing all existing loans against a property with a new loan or loans that is greater than the amount needed to pay off the existing loans.

Cashier's Check -

A check drawn by a bank on itself, signed by the Cashier or other authorized bank officer and payable to a third party named by the customer. Cashier's Checks are universally accepted.

CD -

(see Certificate of Deposit)

Ceiling -

The maximum allowable interest rate over the life of the loan of an adjustable rate mortgage.

Certificate of Deposit (CD) -

A type of deposit account with a minimum initial deposit and fixed term (months until maturity).The current rate will dictate how interest is earned for the term. Usually, interest payments may be added back to the CD or payable by check or deposited to another checking or savings account at the depositors institution. Most CD's automatically renew at the end of a term at the current rate at the time of renewal.

Certificate of Title -

A statement provided by an abstract company, title company, or attorney stating that the title of real estate is legally held by the current owner.

Certified Check -

A bank guarantees payment on this type of check.

Check Box -

An interactive icon used on a Web site to let you indicate a simple yes or no answer, or to make one or more selections from a list of several items.

Check Safekeeping -

The process of digitizing customer's paid checks. The digital image becomes the official record of the transaction and is kept by the financial institution. Canceled checks are stored electronically rather than being returned to the customer.

Checking Account -

An account which allows the account owner to write checks against the account on deposited funds.

Cipher -

(see Encryption)

Clear Title -

A title that is free of liens or legal questions as to ownership of the property.

Closing -

The time and place at which all documents for your loan are signed, dated and notarized.

Closing Costs -

Any fees paid by the borrowers or sellers during the closing of the mortgage loan. This normally includes an origination fee, discount points, attorney's fees, title insurance, survey, filing fees and any items which must be prepaid, such as taxes and insurance escrow payments.


(see Constant Maturity Treasury)

Co-Borrower -

An additional borrower whose income and credit contribute to the primary borrower's ability to qualify for a loan and whose name appears on the loan documents. There may be more than one co-borrower, and all co-borrowers have legal obligations equal to the primary borrower.


(see Cost of Funds Index)

Collateral -

An asset that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

Combined Loan to Value -

The relationship between the unpaid principal balances of all the mortgages on a property and the property's appraised value.

Common Stock -

Stock represents partial ownership of a public corporation. A share of common stock typically carries voting rights and may pay dividends (see Bond).

Compound Interest -

Accrued interest when earnings for a specific period are added to principal. Interest for the following period is computed on the principal plus accumulated interest.

Compounding Interest -

The process of reinvesting interest to earn additional interest. The more frequent the compounding, the more you earn.

Compounding Investment Earnings -

Earnings on an investment's earnings. Over time compounding can produce significant growth in the value of an investment.

Confirm -

Whenever you buy or sell an investment, you should receive confirmation, or a "confirm," that acknowledges and reports the details of your transaction.

Constant Maturity Treasury (CMT) -

Since on any given day there is rarely a security issue with exactly 1 year remaining until its maturity date (or other specified term), the Constant Maturity Treasury is a calculated valued reported by the Federal Reserve Board in Statistical Release H15 to express what the yield would be on US Treasury securities for various specified fixed terms. Data is reported daily for values effective for specific dates, and as averages in effect for each week, month and year. For example, the weekly average yield on US Treasury securites with a constant maturity of one year is a common Index used for adjustable rate mortgages.

Consumer Price Index (CPI) -

An economic gauge that tracks changes in consumer prices for a fixed number of goods and services, including housing costs, food, transportation and electricity. The CPI is generally used to measure inflation at the retail level.

Conventional Mortgage -

A mortgage that is not obtained under a federal government insured program, such as the Federal Housing Authority, (FHA) or the Veterans Administration (VA), but which meets other standard requirements.

Cookies -

Strings of numbers or letters placed in your computer memory to make your online experience easier and more dynamic. For example, the cookies a given site uses helps them "remember" your ZIP code so you don't have to enter it more than once during the same visit to their site. NOTE: You must have cookies enabled on your computer to use many online services.

Cost of Funds Index (COFI) -

Monthly weighted average cost of funds for savings institutions that are members of the Federal Home Loan Bank System Eleventh District (San Francisco). COFI consists of the monthly weighted average cost to Bank members of savings, borrowings and advances (see Index).

Coupon Rate -

This is another term for the interest rate on a bond (see Bond).


(see Consumer Price Index)

Credit -

With savings or checking accounts, an amount added to a savings or checking account balance, either through deposits or interest earned over time (see Debit). In other cases, "credit" is another name for a loan.

Credit History-

 A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.

Credit Limit -

The maximum amount that you can borrow under a personal line of credit or home equity line of credit plan.

Credit Report -

A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.

Credit Repository -

An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

Cumulative Total Return -

A measure of the total increase in the value of an investment over time, assuming dividends and capital gains distributions are reinvested (see Dividend, Capital Gain or Loss).

- D - 

Daily Compounding -

An interest calculation in which interest is added to the principal each day. Interest is then earned on the new balance.

Daily Interest -

Interest computed or assessed daily and based on the principal and interest left in the account each day (see Compound Interest, Principal, Interest).

Debit -

With a savings or checking account, an amount withdrawn or removed from the account balance (see Credit).

Debit Card -

A plastic card with either the Master Card or VISA logo, designed to give a customer access to funds in his/her checking account to obtain cash or purchase goods and services. The cards are accepted around the world wherever you see the Master Card or VISA logo. Pacific Trust Bank issues a Master Card debit card.

Debt -

Amount owed to another.

Debt Service - The total amount of credit card, auto, mortgage or other debt upon which you must pay.

Debt-to-Income Ratio -

The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.

Deed -

A legal document that transfers some interest in real estate or other property (see Lien, Satisfaction of Mortgage).

Deed of Trust -

Used in many western states, the agreement used to pledge your home or other real estate as security for a loan (to secure a lien on a property). Similar to a mortgage.

Default -

Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

Deferred Interest -

Interest is deferred on an ARM when a minimum monthly payment is not large enough to pay all the interest that has accrued on the loan for that period. The unpaid interest is added to the outstanding principal balance to be repaid over the remaining life of the loan. To avoid deferred interest, a borrower sometimes has the option of making a larger payment that includes what would otherwise become deferred interest.

Delinquency -

Failure to make mortgage payments when mortgage payments are due.

Direct Deposit -

Automatically deposited funds to checking or savings accounts via a pre-authorized system. Customer government benefits or other payments are automatically deposited to their checking or savings accounts. Some types of Direct Deposits are Social Security, SSI, VA benefits, annuities, pension benefits, payroll checks and dividend checks (see our Direct Deposit webpage).

Discount Points (or Points) -

The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000).

Diversification -

Spreading your assets among a wide variety of investments - stocks, bonds, cash or real estate, for example - thus reducing the impact of the performance of  any one asset on your overall portfolio (see Common Stock, Portfolio).

Dividend -

Stock investors may receive payments distributed by a company on a per-share basis. Mutual fund shareholders may be paid dividends from the income generated by the fund's investments.


(see Dow Jones Industrial Average)

Dollar Cost Averaging -

An investment strategy whereby you invest the same amount of money at regular intervals, regardless of share price. Dollar cost averaging allows you to buy more shares when prices are lower and fewer when prices are higher, smoothing out fluctuations of the stock market. Remember, however, that this plan does not guarantee a profit or protect against loss and requires investors to determine whether they can continue to invest over the long term.

Double Tax-

Free Income - Income that is exempt from both federal and state income taxes.

Dow Jones Industrial Average (DJIA) -

The average of the stock prices of 30 U.S. industrial companies. This number is popularly viewed as a principal stock market indicator.

Down Payment -

The difference between the purchase price and that portion of the purchase price being financed. Most lenders require the Down Payment to be paid from the buyer's own funds. Gifts from related parties are sometimes acceptable, and must be disclosed to the lender.

Download -

The act of transferring data from a network to a local computer.

Drop-Down Menu -

An interactive list from which you can select one option from multiple choices. Frequently used in online forms so the user doesn't have to enter data. Also called a "pull-down" menu or list.

Due on Sale -

A clause in a mortgage agreement providing that, if the mortgagor (the borrower) sells, transfers, or, in some instances, encumbers the property, the mortgagee (the lender) has the right to demand the outstanding balance in full.

- E -

Earnings Per Share -

The amount of a company's after-tax earnings divided by the number of shares outstanding. If a company earned one million dollars and had ten million shares outstanding, earnings per share would be ten cents.

Effective Interest Rate -

The cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Useful in comparing loan programs with different rates and points.


(see Electronic Funds Transfer)

Electronic Funds Transfer (EFT) -

Any transfer of funds that is initiated through electronic means and results in a financial institution debiting or crediting an account. Examples of electronic funds transfer means include: electronic terminal, telephone, computer, ATM or magnetic tape.


(See Equity Line of Credit)

E-mail -

Electronic mail messages, usually text, sent from one computer to another via the Internet.

E-mail Address -

An electronic mail address. E-mail addresses follow a standard formula such as:

Encryption -

The process of encoding data to prevent other people from reading or accessing confidential information online (see Secure Socket Layer).

Encumbrance -

A claim against a property by another party which usually affects the ability to transfer ownership of the property.

Equal Credit Opportunity Act (ECOA) -

A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Equity -

In terms of real property, equity is the difference between the outstanding balance on all the loans secured by the property and the property's fair market value (appraised value).

Equity Fund -

In the case of mutual funds, this is a portfolio that invests primarily in stocks.

Equity Line of Credit (ELOC) -

Generic term (most common form is a Home Equity Line of Credit that lets you convert equity in your home to cash).

Escheat -

The transfer to a state of certain money and property after a period of time in which they are left unclaimed by the owner.

Escrow Account (Impound Account) -

In connection with loans secured by real estate, an escrow account is an account that a borrower pays into at the same time the borrower pays his or her loan payment, and from which the lender makes tax and insurance payments applicable to the borrower.

Escrow Analysis -

An annual review of escrow accounts to determine if current monthly deposits continue to provide the required funds to pay taxes, insurance payments, or both, as they come due (see Escrow Account).

Ex-Dividend Date -

The day that dividends and capital gains are distributed to mutual fund shareholders of record. Shares purchased on the ex-dividend date will not receive the current dividend (see Dividend,Capital Gain or Loss).

Expense Ratio -

How much it costs a mutual fund or variable annuity sub-account to conduct business, as a percent of its assets. Expense ratios can be found in prospectuses.

- F - 

Fair Credit Reporting Act -

A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Family of Funds -

Groups of mutual funds managed by the same company are sometimes referred to as a "fund family." Owning a number of funds within the same family often can make it easier to switch money among funds.

Fannie Mae -

(see Federal National Mortgage Association)

Favorites -

A link you can place on the Internet Explorer pull-down Favorites menu. By clicking directly on a favorite, you can access a Web page with one click (see Bookmark).


(see Federal Deposit Insurance Corporation)

Federal Deposit Insurance Corporation (FDIC) -

A government-owned corporation that insures deposits up to $100,000 at all federal and some state-chartered banks, savings associations, and industrial loan companies. Deposit insurance is financed by a fee paid by the insured institutions (see Bank Insurance Fund). The FDIC promotes the safety and soundness of insured depository institutions and the U.S. financial system by identifying, monitoring and addressing risks to the deposit insurance funds. The FDIC also is the primary federal regulator of about 6,000 state-chartered "nonmember" banks (commercial and savings banks that are not members of the Federal Reserve System).

Federal Home Loan Mortgage Corporation (Freddie Mac - FHLMC) -

A privately owned for-profit corporation that purchases home mortgage loans from lenders, and uses the loans to create mortgage-backed securities for sale to investors.

Federal National Mortgage Association (Fannie Mae - FNMA) -

A privately owned for-profit corporation that purchases home mortgage loans from lenders, and uses the loans to create mortgage-backed securities for sale to investors. In order to be sold to FNMA, loans must meet FNMA standards to qualify for Fannie Mae Interest rates.

Federal Reserve Board -

A seven-member governing body of the Federal Reserve System appointed by the President for 14-year terms. The Board plays an important role in determining the country's monetary policy, which, in turn, can influence economic activity.


(see Federal Home Loan Mortgage Corporation)

Field, Form Field -

A text box used for entering data on a Web-based form or application.

15-Year Payment Plan -

A loan payment option that ensures payments large enough to cover all interest due and extra principal to pay off your loan based on a 15-year term.

Financial Statement -

A written account of a firm's operations that often indicates the financial health of a company. It's comprised of an income (or profit and loss) statement and a statement of financial condition indicating the firm's assets, liabilities and net worth.

First Deed of Trust (or First Mortgage) -

In order to protect the rights of the lender and the borrower, liens on real estate are usually recorded in the county where the property is located. A deed of trust or mortgage typically becomes a lien against the property when it is recorded, and this record typically establishes the priority of liens if the property is sold for any reason. The loan with first rights is the First Deed of Trust or First Mortgage (see Deed of Trust, Mortgage).

First Mortgage -

A mortgage which is in first lien position, taking priority over all other liens which are financial encumbrances. (see First Deed of Trust)

Fixed Annuity - An insurance contract that offers tax-deferred earnings growth and guarantees fixed payments, either for life or for a specified period, to an annuitant. A fixed annuity usually accrues interest at a fixed or company-declared rate over a specific period. Fixed Rate - An interest rate which is fixed for the term of the loan. Payments as well are fixed at one amount.

Fixed Rate Mortgage -

A mortgage loan in which the interest rate does not change (see Adjustable Rate Mortgage).

Flexible Premium Annuity -

An annuity that permits additional premium payments into the contract after the original purchase.

Flood Insurance -

Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.


(see Federal National Mortgage Association)

Freddie Mac -

(see Federal Home Loan Mortgage Corporation)

Full Interest Payment -

A loan payment option that satisfies the minimum amount and all regular monthly interest due.

Full Principal and Interest Payment -

A loan payment option that includes all the interest due and reduces your principal.

Funds Availability -

The dollar amount or time period represented by checks that have been deposited but have not cleared.

- G - 

Ginnie Mae -

(see Government National Mortgage Association)

Global Fund -

A portfolio that buys securities of companies headquartered anywhere in the world, including the U.S., as opposed to an international fund, which invests only in securities of corporations based outside of the U.S.


(see Government National Mortgage Association)

Good Faith Estimate -

A written estimate of closing costs which a lender must provide you within three days of submitting an application.

Government National Mortgage Association (Ginnie Mae - GNMA) -

A government-owned corporation that guarantees privately issued mortgage-backed securities.

Grace Period -

(1) A period of time during which a depositor can withdraw funds from a certificate without being penalized. (2) A period of time during which a loan payment may be paid after its due date during which no late charge or other penalty is assessed. Such late payments may be reported on your credit report.

Gross Income -

For loan qualifying purposes, the income of the borrower before taxes or expenses are deducted.

Growth Stock -

Stock of a corporation that has exhibited faster-than-average gains in earnings over the last few years and which analysts expect to continue to show high levels of profit growth.

. - H - 

Hazard Insurance (Homeowner's Insurance) -

Insurance that protects homeowners against loss to real estate caused by fire, specified natural causes and other causes of property loss or damage.

Home Equity Line of Credit -

A line of credit providing you with the ability to borrow funds at the time and in the amount you choose, up to a maximum credit limit for which you have qualified. Repayment is secured by the equity in your home. Simple interest (interest-only payments on the outstanding balance) is usually tax-deductible. Often used for home improvements, major purchases or expenses, and debt consolidation.

Home Equity Loan -

A fixed or adjustable rate loan obtained for a variety of purposes, secured by the equity in your home. Interest paid is usually tax -deductible. Often used for home improvement or freeing-up of equity for investment in other real estate or investments. Recommended by many to replace or substitute for consumer loans whose interest is not tax-deductible, such as auto or boat loans, credit card debt, medical debt, and education loans.

Home Page -

The main page of a Web site. Usually this is the first page that appears when a visitor accesses the Web site. ALSO: the first page that appears on your browser when you access the Internet is referred to as your home page.

Homeowner's Insurance -

(see Hazard Insurance)

HUD I Settlement Statement -

A form utilized at loan closing to itemize the costs associated with purchasing the home. Used universally by mandate of HUD, the Department of Housing and Urban Development.

Hyperlink -

A highlighted word or picture within a Web page that, when selected, takes you to another place within that page or to another page altogether.

. - I - 

Impound Account -

(see Escrow Account)

Inactive Account -

An account that has not had any transactions for an extended period of time.

Income Fund -

In the case of mutual funds, this is an investment portfolio that emphasizes securities that pay current income. Bond funds are considered income funds (see Bond).

Index -

A number, usually a percentage, upon which future interest rates for adjustable rate mortgages are based. Common indexes include the major bank Prime rate, the "CMT" (Constant MaturityTreaury - usually for a 1-year term), "COFI" (Cost of Funds for the Eleventh District financial institutions), and the "MTA" -average rate of a one year Government Treasury Security. For example, interest rates on adjustable rate loans change in accordance with changes in certain index values.

Index Fund - A mutual fund that seeks to parallel the performance of a market index. Index funds are designed to take advantage of the average long-term gro

wth of the market segment tracked by the index rather than attempting to beat the market. The cost of managing an index fund is usually less than managing other types of funds that require more frequent trading.

Individual Retirement Account (IRA) -

A tax-deferred account that allows individuals to contribute a maximum of $4,000 per year (for current year) toward retirement. Since the investments are not taxed, they can grow more rapidly and benefit from the power of compounding until they are withdrawn. IRA contributions may be fully or partially tax deductible. Types of IRAs to choose from for eligible individuals include the Traditional IRA, the Roth IRA and the Education IRA. (See also IRA/ROTH IRA section above.)

Installment Debt -

A debt or loan that is repaid in successive payments over a period of time. Examples of consumer installment debt include payments for car, boat, student and private (unsecured) loans.

Interest -

For savings and checking accounts, interest is the payment by a financial institution to customers for the use of their funds. Conversely, interest is what a borrower pays over and above the amount of a loan for the use of the financial institution's money (see Principal).

Interest Rate -

(1) For savings and checking accounts, the annual rate of interest paid on an account, which does not reflect compounding. (2) For loans, a periodic charge expressed as a percent or the percentage that is applied to the amount of a loan to determine the charges for the use of the money (see Adjustable Rate Mortgage, Fixed Rate Mortgage).

Interest Rate Cap -

In most cases, the maximum rate of interest that may be charged on an adjustable rate mortgage loan over the life of the loan (see Adjustable Rate Mortgage, Fixed Rate Mortgage, Interest Rate).

International Fund -

A portfolio that buys securities of companies headquartered outside of the U.S., as opposed to global funds which invest in securities of both U.S. and foreign corporations (see Global Fund).

Investment Grade Bond -

A bond with one of the top four credit ratings (AAA, AA, A, BBB) of independent bond-rating agencies, like Moody's or Standard & Poor's (see Bonds).


(see Individual Retirement Account)

Irrevocable Trust -

A type of trust in which the grantor gives up rights to amend or terminate the trust.

- J - 

Junk Bond -

A bond with a credit rating of BB or lower as determined by rating agencies. These low-rated bonds often offer higher interest rates because of their higher risk of default. Junk bonds are often referred to as high-yield bonds (see Bond, Non-Investment Grade Bond).

- K - 

Keogh account -

A tax-deferred trust savings account that allows self-employed individuals or those who own their own incorporated businesses to save for their retirement. Savers place a portion of their income each year in their Keogh account until they reach at least age 59 1/2. Federal income tax on the deposited funds and the interest they earn is deferred until withdrawals are begun, presumably when the saver has retired, and is, therefore, in a lower tax bracket. Employers who establish a Keogh plan for themselves must also make the benefit available to qualified employees.

Kick-out clause -

A provision of a lease that permits a tenant to cancel a lease if the landlord fails to comply with stated conditions, obligations or standards.

- L - 

Lender -

The bank, mortgage company, or mortgage broker offering the loan.


See London Interbank Offered Rate

Lien -

The right to take and hold or sell the property of a debtor as a security or payment for a debt. A lien can secure a loan or another claim against the property, such as taxes.

Lifetime Cap -

(see Interest Rate Cap)

Link -

A highlighted word or graphic image within a Web page that, when selected, transports the user to another place within the page or to another page altogether. (See Hyperlink)

Living Trust -

A trust created and operating during a grantor's lifetime.

Load Fund -

A mutual fund that sells shares at a price that includes sales charges or commissions. (see No Load Fund).

Loan Terms -

The conditions that specify how a loan will be repaid and a borrower's obligations until the loan is repaid. Some common loan terms include interest rate, fees charged and the length of the loan.

Loan-to-Value Ratio (LTV) -

The ratio determined by dividing the balance of a mortgage loan by the appraised value of the real estate. For instance, if the balance on a mortgage loan is $80,000 and the appraised value of a home is $100,000, the LTV is 80%.

Log In, Sign In -

The act of initiating a work session or connecting to another computer by providing certain information, usually user name and password (see Log Out).

Log Out, Sign Out -

The act of ending a work session or disconnecting from another computer (see Log In, above).

London Interbank Offered Rate (LIBOR) - LIBOR is the rate international banks charge each other, and varies among the participating banks and throughout each business day reflecting global economic conditions. Standard LIBOR index rates (averages, fixed at a specific time each day) are published for various maturity terms.

Long-Term Bonds -

Generally, bonds with maturities in excess of ten years. They usually pay investors higher yields than shorter-term bonds, but they tend to be more sensitive to interest-rate changes (see Bond).

Long-Term Gain or Loss -

For tax purposes, the gain or loss on the sale or exchange of an asset held for more than twelve months.


(see Loan-to-Value Ratio)

- M - 

Management Company -

A firm that organizes, oversees and administers a mutual fund or variable annuity investment portfolio.

Management Fee -

The compensation that mutual fund companies charge investors for expenses incurred in managing the fund. Management fees must be disclosed in a fund's prospectus.

Margin -

An amount, usually a percentage, which is added to the index to determine the interest rate for adjustable rate mortgages at each adjustment period. For example, if the index is at 5.0, and the margin is 1.5, the interest rate is 6.5% (see Interest Rate, Index).

Market Capitalization -

In the securities industry, the value of a company determined by multiplying the number of outstanding shares by the current market price per share.

Market Timing -

A stock market investment strategy that's based on trying to predict market cycles. The goal is to buy before share prices rise and sell before they fall.

Maturity Date -

In the case of securities, the day on which the principal amount of a bond or other dated debt security is to be repaid in full. In the case of mortgage loans, the date on which the outstanding balance of the loan must be paid in full. In the case of savings, the first date following the account term, on which a certificate of deposit may be renewed or withdrawn without penalty (see Bond, Certificate of Deposit, Mortgage Loan).

MI -

(see Mortgage Insurance).

Minimum Amount Due -

A loan payment option that covers the minimum amount due monthly. With many adjustable rate loans, when you choose to pay the minimum amount due option, your payment may not always cover the total interest due. This unpaid portion is called "deferred interest," which is added to your loan balance. Other loan payment options do not provide for deferred interest.

Minimum Payment -

The minimum amount that you must pay, usually monthly, on a home equity loan or line of credit. In some plans, the minimum payment may be "interest only" (simple interest). In other plans, the minimum payment may include principal and interest (amortized).

Money Market Account -

A checking account that earns interest generally comparable to Money Market Funds, although the rates paid by any particular bank may be higher or lower.

Money Market Deposit Account -

A deposit account offered by banks and financial institutions directly equivalent to, and competitive with, money market mutual funds.

Money Market Fund -

Mutual funds that are designed to seek current income and remain stable by investing in short-term, relatively liquid assets, such as treasury bills, certificates of deposit and bonds or notes with remaining maturities of thirteen months or less.

Monthly Housing Expense -

For purposes of a real estate loan application, the sum of all monthly payments of principal and interest on all mortgages (including home equity loans and equity lines of credit) secured by owner-occupied residential property, plus monthly property tax and insurance payments or accruals, plus any homeowners' association dues or fees applicable to that property.

Monthly Payments on Rental Property -

For purposes of a real estate loan application, the sum of all monthly payments of principal and interest on all mortgages (including subordinate mortgages and secured lines of credit) held on non-owner-occupied properties, plus monthly payments or accruals for property taxes, hazard insurance and mortgage insurance, but NOT including normal maintenance fees, utilities or repairs.

Monthly Treasury Average (MTA) -

A calculated twelve-month moving average of the 1-Year Constant Maturity Treasury (CMT) monthly average index value as published in Federal Reserve Statiscal Release H.15 (see Index)

Mortgage -

A legal document that pledges real estate as security for repayment of a loan or other obligation (see Deed of Trust).

Mortgage Insurance (MI, PMI) -

Insurance written by an insurance company that is designed to protect the mortgage lender against a potential loan default. It is usually required for loans with a loan-to-value (LTV) ratio greater than 80% (see Loan-to-Value Ratio).

Mortgage Loan -

A loan which utilizes real estate as security or collateral to provide for repayment should you default on the terms of your loan. The mortgage or Deed of Trust is your agreement to pledge your home or other real estate as security.

Mortgagee -

The lender in a mortgage loan transaction.

Mortgagor -

The borrower in a mortgage loan transaction.


(see Monthly Treasury Average)

Multiple Party Account -

Account owned by two or more parties. Parties own the account during the lifetime of all parties in proportion to their net contributions, unless there is clear and convincing evidence of a different intent.

Municipal Bond -

A debt security issued by state or local governments to help finance operations or special projects, like building schools, road construction, and water and sewer projects. "Muni" bonds are attractive to investors, because the income they generate is usually exempt from income taxes (see Bond).

Mutual Fund -

n investment company that pools the money of many investors who share common or "mutual" investing goals in order to invest in securities, such as stocks, bonds or money market instruments. Mutual fund advantages typically include low-cost diversification and professional management (see Common Stock, Bond, Load Fund, No-Load Fund).

- N - 

NASDAQ Composite Index -

 market-value weighted index of the stocks listed on the NASDAQ Stock Market. This index is often used as an indicator of the performance of small company stocks.

NAV - (See Net Asset Value).

Navigation Bar or Menu -

A list of links on each page of a Web site enabling movement to key pages of the site.

Net Asset Value (NAV) -

The NAV is the value of one share of a mutual fund. Computed daily, it is calculated by adding together the value of all the fund's holdings, subtracting expenses and liabilities and dividing by the number of shares outstanding.

New York Stock Exchange (NYSE)  -

The New York Stock Exchange is the oldest stock market in the United States.

No Load Fund -

A mutual fund whose shares are sold without a sales charge or commission and without an asset-based distribution fee of more than .25 percent per year (see Load Fund, 12b-1 Fee).

Non-investment Grade Bond -

Considered by rating services like Moody's or Standard & Poor's to carry a higher risk of default, these bonds are typically given low credit ratings (ranging from BB to D). Also called "junk" bonds, these securities attempt to compensate investors for their higher risk by paying higher yields (see Bond, Junk Bond).

Note -

A written agreement containing a promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand.

- O - 

Office of Thrift Supervision (OTS) -

a bureau of the Treasury Department that was authorized by Congress in the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to charter, regulate, examine and supervise savings institutions.

Online Banking -

Personal and business account information accessible through a personal computer and the Internet.

Online Bill Pay -

Bill payment is available online and allows you to make payments to several different vendors. Paper checks are issued when ACH payments are not available through bill payment.

Open-End Credit -

A consumer line of credit that may be used repeatedly up to an established overall limit. Commonly known as revolving credit or a charge account, in which the customer may pay in full or in installments that include a finance charge. The term does not include negotiated advances under an open-end real estate mortgage or a letter of credit.

Open-End Fund -

A mutual fund that is formed to continuously issue and buy back shares to meet investor demand. The share price is determined by the market value of the securities held by the fund's portfolio, and it may be higher or lower than the original purchase price. Open-end funds can be load or no-load (see Portfolio, Load Fund, No Load Fund).

Operating Expenses -

In the securities industry, the costs of running a mutual fund, which are paid out of a fund's assets before earnings are distributed to fund shareholders.


(see Office of Thrift Supervision)

Overdraft - The amount by which withdrawals exceed deposits.

Overdraft Protection -

A service that allows the customer to write checks for an amount over and above the amount in their checking account. Funds are transferred from their line of credit or other designated account to their checking account as needed. This service must be applied for and approved.

Overvalued -

A stock whose current market price is estimated to be too high given the firm's earnings, growth potential or other criteria (see Undervalued).

- P -

P/E Ratio -

(see Price-to-Earnings Ratio)

Parent Company -

A company that owns or otherwise controls another company or companies. First PacTrust Bancorp, Inc. is the parent company of Pacific Trust Bank.

Password -

A personal code used to gain access to a secure area of a Web site. Passwords typically use a combination of letters and numbers and are often case-sensitive (see Log In).

Payable Date -

The day on which a mutual fund pays distributions to its shareholders.

Payment Cap -

The maximum amount an ARM payment can increase at a payment change date regardless of the amount of increase in the interest rate. For example, a current loan payment of $1000, with a 7.5% payment cap, may increase to no more than $1075 on the next payment change date.

Personal Identification Number (PIN) -

An account holder has a secret number or code to authorize a transaction or obtain information regarding his or her account. Often used in conjunction with a plastic card (ATM or Debit card), online account access or with a telephone voice response system.


Principal, interest, taxes and insurance, which comprise your monthly mortgage payment.

PMI - (see Mortgage Insurance)

Portfolio -

A pool of investments that consists of stocks, bonds or other assets, either solely or in combination. A well-diversified portfolio can help reduce investment risk (see Common Stock, Bond).

Portfolio Turnover -

A measure of a mutual fund's trading activity that indicates how much buying and selling of securities has taken place.

Prepayment -

The payment of principal on a loan before it is due.

Prepayment Fee -

A fee assessed to a borrower in connection with a prepayment.

Price-to-Earnings Ratio (P/E Ratio) -

A stock's price divided by its reported annual earnings per share.

Principal -

In a savings or checking account, the amount deposited, excluding earned interest. In a loan, the sum of money, exclusive of interest charges and other charges and fees, owed to the lender by the borrower.

Private Mortgage Insurance (PMI) -

(see Mortgage Insurance)

Promissory Note -

A legal document describing the contractual terms under which a borrower agrees to repay a sum of money to a lender (see Deed of Trust, Mortgage).

Prospectus -

For mutual funds and variable annuities, a legally required document that details investment objectives, history and performance, and describes an investment's operation, fees and other legal and financial information. Filed with the Securities and Exchange Commission, a prospectus can help investors make more informed investment decisions and should be read before investing (see Mutual Fund, Variable Annuity, Securities and Exchange Commission).

- Q - 

Qualified Retirement Plan -

401(k) plans, 403 (b) plans or Keogh plans are sometimes referred to as qualified retirement programs. Such plans typically allow individuals to contribute both pre- and after-tax money for a tax-deferred investment. These plans are usually funded by contributions from employee wages, which may be enhanced by employer contributions.

Qualifying Ratios -

Comparisons of a borrower's debts and gross monthly income.

- R - 

Radio Button -

An interactive navigation icon indicating that the user should make one choice out of a short list of items.

Rate -

The annual rate of interest on a loan, expressed as a percentage of 100.

Real Estate Loan -

A loan that uses real property as security or collateral for the loan (see Mortgage, Deed of Trust, Adjustable Rate Mortgage, Bi-weekly Payment Mortgage, Loan, Fixed Rate Loan).

Real Estate Settlement Procedures Act (RESPA) -

A Federal law that, among other things, requires lenders to provide home mortgage borrowers with estimated loan closing costs and other disclosures.

Reconveyance -

A method of releasing a lien against real property (see Lien, Deed of Trust, Mortgage).

Record Date -

The date that determines which shareholders are eligible to receive dividends or capital gains declared by a mutual fund (see Dividend, Capital Gain or Loss).

Redemption -

When you sell your mutual fund shares back to the fund, you are considered to be "redeeming" your investment.

Refinancing -

The process of paying off an existing loan with the proceeds from a new loan.

Reinvestment -

An option that allows you to automatically use your dividend and capital gains distributions to purchase new fund shares.


(see Real Estate Settlement Procedures Act)

Revocable Trust -

A type of trust that either may be changed or terminated by the grantor during his or her lifetime.

Revolving Debt and Credit -

Revolving credit is credit that is repeatedly available up to a specified amount as periodic repayments are made. Revolving debt is the total amount of the credit that has actually been used and is outstanding at any given point in time. For purposes of a real estate loan application, "revolving debt payments" refers to the minimum periodic payments that are required to repay the current outstanding balance under a consumer revolving payment plan. Examples of consumer credit plans that provide revolving credit include major bank cards, such as American Express, Visa, MasterCard and Discover, and department store and gas cards.

Right to Rescission -

The legal right to void or cancel your mortgage contract in such a way as to treat the contract as if it never existed. Right of rescission is not applicable to mortgages made to purchase a home, but may be applicable to other mortgages, such as home equity loans.

Risk -

The possibility that a given investment will lose value. Types of investment risk include currency risk, inflation risk, capital risk, market risk and interest-rate risk. Risk is a trade-off for investors. In order to increase the potential for reward, one usually has to assume a greater amount of risk.

Rollover -

The tax-free transfer of funds from one qualified retirement plan to another within a specified period of time.

Roth IRA -

Contributions are not deductible but distributions can generally be withdrawn tax free.

- S - 

S&P 500 -

(see Standard & Poor's 500 Index)


(see Statement of Additional Information)

Satisfaction of Mortgage - A recorded document issued by a lender verifying full repayment of a mortgage loan (see Reconveyance).

Savings Account -

A deposit account with no legal limits or requirements as to amount, duration, or times of additions. Savings accounts do not come with checks but do include ATM cards for cash withdrawals.

Screening Questions -

Questions that only you are likely to know the answers to. To verify your identity, we will ask one of these questions when you change account information online or when you call us to discuss confidential account business. You select the questions and answers during the enrollment process.

Scroll Bar -

The bar on the side or bottom of a window that allows the user to scroll up and down or back and forth through the window's contents. Scroll bars usually have arrows at either end and a scroll box, all of which can be used to scroll around the window.


(see Securities and Exchange Commission)

Second Mortgage - A mortgage recorded subsequent to the first mortgage or otherwise made "junior" to another mortgage. A second mortgage is always subordinate to the first mortgage on the same property (see Refinancing).

Secure Form -

On the Internet, an online form whose contents are encrypted for privacy and security when the form is filled out or sent (see Security, Secure Socket Layer).

Secure Socket Layer (SSL) -

A computer technology enabling secure, encrypted, authenticated communications across the Internet. SSL is intended to provide three important things - privacy, authentication, and message integrity.

Securities and Exchange Commission (SEC) -

The primary federal agency responsible for administration and enforcement of U.S. securities laws. Among other matters, the SEC oversees disclosure requirements for various types of securities.

Security -

On the Net, security is most often provided by software, which assures that private information remains private (see Secure Socket Layer).

Security Interest -

An interest that a lender takes in the borrower's property to assure repayment of a debt.


(see Simplified Employee Pension Plan)

Servicing a Loan -

The ongoing process of collecting your monthly mortgage payment, including accounting for and payment of your yearly tax and/or homeowners insurance bills.

Session, Web session -

The period you spend online or visiting a site.

Share Price -

For mutual funds, the share price is the net asset value of an individual share of the fund (see Net Asset Value).

Sign In, Sign Out -

(see Log In, Log Out)

Signature Card -

A contractual form, executed by an account holder, establishing account ownership and setting forth some of the basic terms of the account and provisions of the deposit contract.

Signature Guarantee -

An assurance by a financial institution or other entity that a particular signature is valid. Typical guarantors include commercial banks, trust companies, savings and loan associations, or member firms of a national securities exchange.

Name -

A unique name you create during the enrollment process that will identify you as a HomeAccess Online Banking Customer. You will need this name and your password each time you visit Pacific Trust's website for Online Banking.

Simplified Employee Pension Plan (SEP) -

A tax-deferred retirement plan for small businesses.

Single Premium Annuity -

An annuity purchased with one lump-sum payment. Unlike flexible premium annuities, single premium annuities don't generally allow you to make additional premium payments at a later time (see Flexible Premium Annuity).


(see Secure Socket Layer)

Standard & Poor's 500 Index (S&P 500) -

A daily measure of stock market performance that is based on a selected group of 500 companies. The S&P 500 is often used as a general indicator of the equity market.

Statement of Additional Information (SAI) -

A supplement to the information contained in a mutual fund's prospectus. It provides more detailed information about fund policies, operations and risks, among other things (see Prospectus).

Stop Payment -

A request to a bank not to honor or allow the payment of a check after it has been delivered but before it has been presented.

Subsidiary -

A company owned or controlled by another company. Pacific Trust Bank is a subsidiary of First PacTrust Bancorp, Inc.

- T - 

Tax Bracket -

Typically the marginal tax rate you pay on your last dollar earned.

Tax Identification Number (TIN) -

The number used to identify an individual or business for federal income tax purposes. This would be an individual's Social Security number (SSN).

Tax-Deferred -

Earnings accumulate in qualified retirement accounts or annuities without being taxed. Instead, taxes are deferred until money is withdrawn or a distribution is made.


(see Treasury Constant Maturity).

Term -

In a mortgage loan, the time period within which a loan must be repaid. Mortgage terms typically range from 15- to 40-years. In a certificate of deposit, the specified period of time during which funds earn interest (see Loan Terms, Mortgage Loan, Certificate of Deposit).

Text Box -

An area of an online form into which you can enter text.

Tiered Interest Rate -

An interest rate structure that allows for increased interest based on a higher tiered rate and increased account balance for that rate.

Title -

(1) The written evidence that proves the right of ownership of a specific piece of property. (2) The legal ownership of property.

Title Insurance -

Protection for lenders or homeowners against financial loss resulting from legal defects in the title.

Title Search -

An investigation into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.

Total Debt Ratio -

Monthly debt and housing payments, divided by gross monthly income, to prove that the seller can transfer free and clear ownership.

Total Return -

The change in value of an investment over a given period, assuming reinvestment of any dividends and capital gains distributions. Total Return is expressed as a percentage of the initial investment (see Dividend, Capital Gain or Loss, Capital Appreciation).

Trade Date -

The date used to determine the price you paid for your investment.

Traditional IRA -

Contributions may be partially or fully deductible, but distributions are generally taxable.

Transaction Costs -

Transaction costs, for purposes of an investment in securities or mutual funds, include fees such as brokerage commissions or mutual fund fees, which are charged when acquiring or selling assets.

Treasury Constant Maturity (TCM) - (see CMT or Constant Maturity Treasury)

Treasury Securities -

Treasury securities, such as bills, notes and bonds, are debt obligations issued and backed by the U.S. Government. Bills are short-term securities with maturities of one year or less. Notes are intermediate-term securities with maturities of one to 10 years. Bonds are long-term securities with maturities in excess of 10 years.

Trust -

A legal arrangement whereby control over property or funds is transferred to a trustee (a person or an organization) for the benefit of a designated person (the "beneficiary"). Trusts are created for a variety of reasons, including tax savings and improved asset management.

Trustee -

An appointed person or organization that manages the contents of a trust.

Trustor -

The creator of a trust, the person who transfers assets to a trust, or a person who encumbers his or her interest in real property by a transfer to a trustee under a deed of trust.

Truth-In-Lending Act -

A federal law requiring a disclosure of credit terms using a standard format (also known as Regulation Z). This is intended to facilitate comparisons between the lending terms of different financial institutions.

12b-1 Fee -

The annual fee charged by a mutual fund to cover distribution expenses, such as marketing, servicing or advertising.

- U - 


(see Uniform Transfers to Minors Act)

Uncollected Funds -

Funds that have been deposited in an account or cashed against an account by a check that has not yet been cleared through the check collection process and paid by the drawee bank. Temporary holds are sometimes placed on their customer's uncollected funds. Funds are unavailable for withdrawal until the time period the hold expires.

Undervalued -

A stock whose current market price is estimated to be too low given the firm's earnings, growth potential or other criteria (see Overvalued).

Underwriting - T

he process of verifying data and approving a loan.

Uniform Resource Locator (URL) -

The standard address format of a page on the World Wide Web. Each Web page has a unique address, even within the same Web site. A URL usually looks like this:

Uniform Transfers to Minors Act (UTMA) [formerly Uniform Gifts to Minors Act (UGMA)] -

A law in effect in most states that governs the transfer of money or property to minors. Such transfers are irrevocable. Under UTMA, a custodian, who may also be the donor, manages the property while the minor retains full rights to the principal and income.


(see Uniform Resource Locator)


 (see Uniform Transfers to Minors Act)

- V - 

Value Stocks -

Stocks that are considered to be inexpensive, based on measures relative to their market value, such as current earnings or total assets. Often, these stocks are considered out of favor or "undervalued" by the market for some reason (see Undervalued).

Variable Annuity -

A tax-deferred contract issued by an insurance company that offers a choice of investment options, allowing purchasers to choose from a number of subaccounts with various investment objectives. Variable annuities can offer diversification, flexibility and estate benefits, and they are often used as a supplement to 401(k) and IRA plans, because contribution limits are much less restrictive.

Variable Rate -

An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly. See Adjustable Rate Mortgages for a complete guide.

Volatility -

The degree of fluctuation in the value of a security. The greater the volatility, the wider the fluctuation in a security's price.

Volume -

The number of shares of stock changing hands during a trading period.

- W - 

Web -

(see World Wide Web)

Window -

A portion of the monitor screen that contains its own document or message. In most popular operating systems, the screen can display several windows at once, each with its own boundaries. Multiple windows can contain different documents or another view of the same document, and each can often utilize a different application.

Wire Transfer -

An electronic transfer of funds from one financial institution to another. Wire Transfers require the routing transit number, dollar amount, account number and name of the account owner(s).

World Wide Web (WWW) -

A system of Internet servers throughout the world that allows users to access, view, download and upload documents formatted in HTML (Hypertext Markup Language). The Web, generally reached through a software program called a browser, allows users to interact with text, graphics, audio and video files (see Hyperlink).

- X - 

- Y - 

Yield (7-Day or 30-Day) -

In the case of mutual funds, the annualized current rate of investment income is calculated with a Securities and Exchange Commission formula that includes the fund's net income (based on the yield to maturity of each bond it holds), the average number of outstanding fund shares during the 7-day or 30-day period shown, and the maximum offering price per share on the last day of the period. Also see Annual Percentage Yield.

Yield Curve -

A plot of the yields for bonds of different maturities taken at a specific point in time. Normally, the longer a bond's maturity, the higher its yield will be to compensate investors for greater risk (see Yield, Bond).

- Z -