Financial Terminology Library
Understanding common financial vocabulary can help you make informed decisions.
Financial jargon made simple
When it comes to buying a car or house, planning for retirement or preparing for another major financial event, understanding complex terminology can be overwhelming. Dominion Energy Credit Union is here to help you make sense of common financial terms so the next time you need to make a major financial decision, you have the vocabulary to set you up for success.
Personal Identification Number. This is the four-digit number that you use to authorize ATM or Debit Card transactions.
Point of sale. This refers to the location where a debit or credit card transaction occurs. For example, at a checkout in a store or online.
When someone else has the power to act on behalf of another person’s legal matters, this is known as power of attorney. Someone who is overseas on military deployment, undergoing major surgery or even unable make a mortgage closing may grant power of attorney to another person.
The Prime Rate is the best loan rate available to anyone except other banks. It’s also called the prime lending rate, the prime rate, or even just prime.
The original sum of money borrowed on a loan (excluding interest) or the base amount you invest. On a mortgage or student loan, the amount of money you borrow is considered the principal. When you make a monthly payment, however, you are paying back the principal plus interest accrued and any related fees.
This nine-digit string of numbers is on the bottom of your check, to the left of your account number. Each financial institution has a unique routing number to ensure money goes to the proper institution. You’ll need your routing number if you are setting up direct deposit, transferring money between institutions, paying bills by direct debit and receiving tax refunds. At Dominion Energy CU, our routing number is 251082644.
A statement is a printed record of the balance of an account or loan, and the amounts that have been paid into it and withdrawn from it, issued periodically to the holder of the account.
A trust is a legal document that certifies ownership of assets. A trust generally has many provisions that determine how and when assets can be divided or distributed, and offers tax breaks. For example, a person may set up a trust for a child but not grant access to the money until the child turns 21. A trust can also be used to provide income to a family member who may need regular financial support because of a disability. There are many different types of trusts available, from a revocable living trust to a charitable trust.
A variable interest rate is an interest rate on a loan that fluctuates over time because it is based on an underlying benchmark interest rate or index that changes periodically.