Finance Vocabulary

balance — the amount of money currently in an account: “Check your balance before making a large payment.”

deposit — to put money into an account; withdraw — to take money out of one: “She deposited her salary and later withdrew cash for the weekend.”

transfer — to move money from one account to another: “He transferred €200 to his sister.”

overdraft — an arrangement allowing an account balance to go below zero, up to an agreed limit: “I went into my overdraft this month.”

direct debit — an automatic payment where the company being paid can vary the amount (common for bills that change, like electricity): “My electricity bill is paid by direct debit.”

standing order — an automatic payment for a fixed amount, set up and controlled by the account holder (common for rent): “I set up a standing order to pay my rent on the first of the month.”

save — to keep money rather than spend it: “I try to save a little each month.”

save up — to save money over time for a specific goal: “They’re saving up for a house.”

budget (noun) — a plan for how much money will be spent and on what; (verb) — to plan spending carefully: “We set a monthly budget for groceries.”

afford — to have enough money for something: “I can’t afford a new phone right now.”

credit — permission or ability to borrow money, often used to buy something now and pay later: “He bought the sofa on credit.”

debt — money that is owed: “She’s still paying off her student debt.”

interest — the extra amount charged for borrowing money, usually a percentage of the loan: “The loan has an interest rate of 6%.”

instalment — one of several regular payments used to repay a loan over time: “He pays the loan back in monthly instalments.”

credit score — a number that reflects how reliably someone repays money they borrow: “A good credit score makes it easier to get approved for a loan.”

loan — a general term for money borrowed and repaid over time, for any purpose: “He took out a loan to buy a car.”

mortgage — a loan specifically used to buy property, secured against that property: “They took out a 25-year mortgage on their new flat.”

return — the gain or loss on an investment, often expressed as a percentage: “The fund gave a return of 7% last year.”

risk — the chance that an investment could lose value: “Shares are generally riskier than a savings account.”

shares / stocks — small units of ownership in a company that can be bought and sold: “She bought shares in a technology company.”

portfolio — the full collection of investments a person or fund holds: “His portfolio includes shares, bonds, and property.”

diversify — to spread money across different types of investment to reduce risk: “Financial advisers usually recommend diversifying rather than investing in one company.”

premium — the amount you regularly pay for insurance: “Her car insurance premium increased this year.”

policy — the actual insurance agreement, including what it covers: “Read your policy carefully to see what’s included.”

cover — the protection an insurance policy provides: “This policy provides cover for accidental damage.”

claim — a request for the insurance company to pay for a loss or damage: “After the flood, they made a claim on their home insurance.”