Glossary of Banking Terms
Two-Factor Authentication (2FA) is an authentication process based on the use of two or more secure elements. It adds an extra layer of security that ensures that the person looking to access an online account is who they say they are. First, you log into your bank account from the web app or a non-paired device with your username and password. You’ll be asked to confirm a push notification on your paired device. If this isn’t possible, you can request an SMS code to be sent to your registered mobile number, confirming your login attempt. This two-step process ensures that only you can log in to your online account. Check here if you want to learn how to log in with Two Factor Authentication in your N26 account.
3D Secure is an extra layer of protection added to your online card transactions. It increases security for both customers and vendors. If you activate 3D Secure, you’ll require a PIN to verify your online transactions. It’s called 3D Secure because it’s a three-domain model. The first is the card issuer, the second is the vendor receiving the payment, and the third is the 3D Secure platform, which acts as a secure intermediary.
Your account balance shows the funds in your bank account at any given moment. The balance is always the difference between your assets and debits/credits. If your account has overdraft coverage, your balance can go into the negative. To access your account balance, simply log into your online account, check it at an ATM, or get in touch with your bank. Find here how to get a bank statement at N26.
Anti-Money Laundering (AML) is the execution of rules, regulations, and processes aimed at preventing criminals from committing financial crimes. The growth of e-commerce in recent years has increased the dangers of online financial crime. The main goal of AML is to prevent money laundering, which is when illegally obtained money is made to appear as if it was obtained legally. Banks and financial institutions implement strong measures to comply with AML regulations, such as requesting more information about their customers when they first open an account, and keeping track of any suspicious money transactions.
Apple Pay is a digital wallet you can use on an iPhone, iPad, iWatch, or Mac to pay for purchases. You can pay with it at stores, in apps, and online with your Apple devices. When you use Apple Pay with a credit, debit, or prepaid card, Apple does not keep any transaction information that can be linked to you. Instead, your transactions stay between you, the merchant, and your bank or card issuer.
The annual percentage rate (APR) is the interest rate you pay on your loans or credit cards each year. When you apply for a mortgage or a new credit card, the bank will charge you a fixed or variable percentage on the amount you borrow, and if you accept the loan, you agree to pay this additional amount.
An Automated Teller Machine (ATM) is an electronic banking terminal that lets you make basic banking transactions without the help of a bank employee. Most ATMs allow you to withdraw cash, make deposits, perform transactions, and pay bills. To use an ATM, you simply insert your physical card or scan your virtual card over the reader, choose your language, enter your 4-digit PIN number, and follow the on-screen instructions.
ATM fees are extra charges that you can incur when using an ATM—such as withdrawing cash using your credit card. A fee may be applied if the ATM belongs to a different bank, or isn’t affiliated with yours, or if you withdraw money from outside of your country. Normally, the ATM will display the amount of the fee before you complete the transaction, allowing you to cancel the operation if you do not agree to pay it.
The Federal Financial Supervisory Authority (BaFin) is the institution that ensures the smooth operation, stability, and integrity of the German Financial System, so that bank and insurance customers, as well as investors, can trust the financial system. It is a self-governing public-law institution that is supervised by the Federal Ministry of Finance on legal and technical issues. The BaFin is financed by fees and contributions from the institutions and activities it regulates.
Your balance, or account balance, shows the funds in your bank account at any given moment. The balance is always the difference between your assets and debits/credits. If your account has an overdraft facility, your balance can be negative. To access your account balance, simply log into your online account, check it at an ATM, or get in touch with your bank.
The balance sheet is your personal financial statement. It gives you an overall snapshot of your money at a specific time. It is a breakdown of your assets (what you own), your liabilities (what you owe), and your net worth (assets minus liabilities). Keeping track of the balance sheet is a good way to organize your finances, to know where all your money is and to ensure that you're staying on top of your debt.
A bank is a financial institution licensed to hold your money or to lend you money. Banks can also offer financial services like wealth management, currency exchange, and safe deposit boxes. Banks are classified into three types—retail banks, commercial or corporate banks, and investment banks. Banks are regulated by the national government or central bank in most countries.
A bank account number is a one-of-a-kind number identifying the account you bank from. If you have many bank accounts, they will all have individual account numbers. Your bank account number is used every time you pay or get paid using your bank account. To find out what your account number is, log into your online bank account or contact your bank
A bank guarantee is when a bank covers a payment obligation to a third party on behalf of customers who are unable to make their payment. In other words, if someone fails to repay a debt, the bank will cover the payment. By providing a guarantee, the bank assumes responsibility for the person’s potential future debt and, as with loans, takes on a risk.
A bank statement is a document that shows your total balance, as well as all incoming and outgoing transactions in your bank account over a period of time. You will find your full name and bank account number on it, as well as two very important dates—the transaction date and the date when the operation was carried out. Bank statements also include a short description of the type of transaction that was performed.
A Banking Agency is a retailer who has been given permission by a bank to conduct banking services on its behalf. With a Banking Agency, the bank can be more accessible to people because its services are available in more places.
A banking license is an authorization from a regulating body that a company complies with a set of strict government regulations required to operate as a bank. Financial institutions must have a banking license to manage deposits, to issue debit or credit cards, and to process foreign exchange services. To obtain a banking license, an institution must meet a set of requirements, such as maintaining sufficient financial reserves and ensuring that data systems are protected.
Mobilité bancaire, or banking mobility, is a service provided by French banks for customers who want to change their primary bank. Banking mobility makes switching from one bank to another easier, as the new bank will provide updated payment information for any direct debits from your account.
A basic rate of interest is the minimum interest rate set by a country's central bank when lending money to its customers. When the base rate changes, banks' interest rates on savings and loans usually change as well. Changes in the base rate also have an impact on how much people spend. The amount of money people spend overall will, in turn, have an impact on how much things cost. As a result, changing the base rate has the potential to affect consumer prices and inflation.
A Bank Identifier Code (BIC) is a unique code used to correctly identify the bank or the financial institution you are sending money to when making an international transaction. The BIC or SWIFT code is between 8 and 11 characters long and is used to identify the country, the bank, and the branch of a customer’s bank account. What is the difference between a SWIFT and BIC code? The messaging system is known as SWIFT (The Society for Worldwide Interbank Financial Telecommunication), and the code used for it is known as BIC. Both terms are used to describe the code or the system interchangeably. This means that you'll get the same 8-to-11-digit number whether you look for your SWIFT or BIC code.
A blockchain is a distributed database that is shared among the nodes of a computer network that stores large amounts of information, without allowing any of that information to be edited. All the data is stored electronically in a digital format. Blockchains are best known for their critical role in cryptocurrency systems, such as Bitcoin. They keep a secure and decentralized record of transactions. Blockchains ensure the fidelity and security of a data record and generate trust without the need for a bank or central authority.
Budgeting is a way to keep track of your money and to plan your financial future. It helps you plan your expenses, organize your income, and identify savings opportunities ahead of time. Some important aspects of your personal budgeting are keeping track of your household expenses, setting clear savings goals, paying off debt as soon as possible, and keeping money for a rainy day.
A business account is a bank account for business owners, helping them keep their personal finances separate from business transactions. A business account works similarly to a personal bank account—enabling the business to make purchases, save for unexpected expenses, and pay bills. Banks offer a variety of accounts and financial services to business owners designed to best suit the type and size of their operations
Most bank cards are issued with an expiration date, which is the date when you can no longer use the card.It’s usually on the front of your card in a two-digit month/year format. For example, if the expiration date is 10/24, your card will be active until the last day of October 2024. This expiration does not apply to your bank account, only to the specific card. If you see that your card’s expiration date is approaching, it’s a good idea to request a new one from your bank.
A card limit is the maximum daily amount of money you can spend using your card. You can set a daily limit for each of your bank cards and decide the maximum daily amount for ATM withdrawals and total spending. Card limits protect you in case of fraud or if you lose your card. Learn how you can change your N26 card limits in real-time.
A Personal Identification Number (PIN) is created and used as a passcode to access the finances in your card. Your card PIN is like a signature, it verifies your identity when you withdraw money or make purchases with your card. When you activate your card, you need to set your card PIN. For maximum security, avoid using elements of your birth date, your address, or repeated digits.
Cash is money you have immediately available as banknotes and coins. Cash can be used to buy things or services, like paying in a restaurant or purchasing fuel. Although credit/debit cards are much more convenient to use, having cash can offer some benefits
CASH26 is an N26 feature that lets you deposit and withdraw money at thousands of retail locations just by generating a scannable barcode in your N26 app and presenting it to the vendor. Simply tap ‘Add money’ in the Home tab in the N26 app, select ‘CASH26’, choose ‘Deposit cash’ or ‘Withdraw cash’, type the amount and your PIN. Show the barcode to the cashier to scan and you’re ready to make your deposit or withdrawal right at the counter. You don’t need to buy anything from the store to use CASH26.
Cashback is a type of incentive where you get a percentage back of money you spend. There are different types of cashback programs you can sign up for. Some credit cards offer cashback on any money you spend using the card at certain vendors they work with. Cash back on debit cards is often money given directly from the bank to the consumer. Some online stores also offer their own cashback schemes.
Cashless is the common term used for any type of transaction made without using physical banknotes and coins. This includes bank transfers, credit card payments, mobile payments, and digital wallets. You don’t need to have any cash on you to complete the purchase.
A central bank is a financial institution that oversees the monetary policy of a country or group of countries. It is responsible for the currency and controls the amount of money in circulation. Central banks also set the base interest rates, which have a huge impact on how much people spend and save. This can, therefore, directly affect prices and inflation. Another function of a central bank is to determine how much money banks can lend to their customers and how much cash they must keep on hand.
A check, or cheque, is a written, dated, and signed order that directs a bank to pay a specific sum of money to the bearer. It’s another way to instruct a bank to transfer funds from your account to the payee or beneficiary. To pay someone by check, you write down the date, the name of the payee (person or institution), the amount of money to be paid, the reason for the payment, and your signature. The payee deposits the check in a bank, who then clears the check and requests the payer’s bank to transfer the amount written on the check to the payee.
Compound interest is when you earn interest on both the money you've saved or invested, known as the principal, along with the interest you earn. As the total amount in your savings or investment account grows, the interest increases as well. This means that over time your money grows much faster than if you only earned interest on the principal amount.
Contactless cards are debit or credit cards that incorporate a communication technology that allows contactless payment. Simply bring the contactless card close to the sales terminal and the payment is made wirelessly with no need to insert the card into the terminal. For security reasons, usually to confirm transactions over a certain amount, you might be asked to enter your PIN.
Contactless is a type of secure cashless payment that lets you buy products or services by holding a contactless card or smartphone near a point-of-sale terminal equipped with contactless payment technology. The terminal will automatically connect with your bank account and the purchase will be completed in a matter of seconds because of radio frequency identification (RFID) technology and near-field communication (NFC).
A corporate tax is a tax on a company’s net earnings or profits. These are generated by the sale of goods or services, as well as commissions, interest, and dividends. Governments levy a corporate tax on both public and private businesses in almost all countries.
Credit is money you can borrow from a credit provider. How much credit you can access is usually based on factors such as your payment history, how much you already owe, your history with the provider, and types of credit you have. Together, this is known as your credit history, and it’s the most important factor that credit providers use to decide how much credit to offer you, and how much interest to charge. Making sure you always pay your bills on time will help you maintain a good credit rating.
A credit card is a bank card issued by a bank or financial institution that allows you to pay for your purchases or services in installments, without having to pay the entire amount at the moment of purchase. When paying with a credit card, the bank grants you credit for the total purchase amount. You agree to pay back this amount, plus any applicable interest, in full at the end of the billing period or in installments. Learn more about the differences between credit and debit cards.
A credit limit is the maximum amount of money that a bank or financial institution extends to a customer through a credit card or line of credit. Credit limits are usually based on the applicant’s credit history. Lenders generally offer high-risk customers lower credit limits, while low-risk customers typically receive higher credit limits due to their good credit history and ability to consistently repay on time.
A credit score is a number used in certain countries, such as the United States and Canada, to predict how likely you are to meet financial obligations, such as paying back a loan. A low credit score, for example, can make it more difficult and expensive to obtain a mortgage. Some EU countries do not have a credit score system. Instead, they only keep track of negative credit marks, such as missed payments.
A crypto token is a unit of value based on cryptography and blockchain. It’s issued by a private entity, which also establishes the token’s value. Crypto tokens can be used for investment purposes, to be traded, to store value, or to make purchases as a form of currency.
Cryptocurrency is a form of digital money that can be exchanged directly between two parties without the need for an intermediary or third party. It uses blockchain-based technology and due to its applied cryptographic techniques, a central bank doesn’t need to guarantee its authenticity. Cryptocurrencies can be exchanged for goods and services or can be used as an investment.
A currency is a form of payment that a ruling body of a country, or countries, issues and circulates within its borders as a way to exchange goods and services. The value of any currency varies with regards to other currencies. The value of one currency compared to another is known as the exchange rate. This rate changes on a regular basis as a result of economic and political events.
Your current balance is the total amount of money you have in your bank account, including any pending transactions. When you make a purchase or deposit money into your bank account, it can sometimes take a few days before the transaction is reflected on your current balance. This means that your current balance does not always show the money that is yours to spend.
The Card Verification Value (CVV) is a 3-digit number on the back of your credit card or debit card, which is used to make online transactions more secure. It’s also known as the Card Verification Code (CVC). When you make an online purchase, you’re prompted to provide this number as proof that you have the physical card. This number is different from your PIN, and it should be kept secret to avoid fraud.
A debit is an expense or amount of money paid from your bank account. When you make a purchase using your debit card, or when you allow a company to automatically deduct money from your account to pay a bill, the account is debited. Once a debit transaction has been cleared, it is deducted from your available bank balance.
A debit card is a card issued by a bank that allows you to make payments, which are directly debited from your bank account. You can use it to make purchases in stores or online, and to withdraw cash from ATMs. You can pay by debit card only up to the amount you have in your available balance. Learn more about the differences between debit and credit cards.
A deposit is money placed into a bank’s custody. You can deposit money into your bank account using an ATM or by physically going to a bank branch. Once the bank has processed the deposit, it will reflect on your bank balance.
A deposit fee is an extra charge you may have to pay when you make a cash deposit in a bank or financial institution. Depending on your bank’s policy, deposit fees can vary based on the deposited amount and the number of deposits you make in a month.
A deposit guarantee scheme (DGS) is a way to ensure protection of the money you have deposited in the bank, even in the case of bankruptcy. You know that the banks' business consists of lending part of this money to other customers, so with DGS you will be reimbursed a limited amount to compensate if a bank ever fails. This model works like an insurance policy for the purpose of preserving the clients’ funds and their confidence in the banking system. DGS is funded entirely by banks, and no taxpayer funds are used. DGS regulations are uniform in the EU, guaranteeing 100,000 euros per depositor.
A digital card is a replica of your credit or debit card on your phone. It is used the same way you use your physical card for purchases on Apple Pay or Google Pay. Digital cards have the same card number, expiration date, and CVV as your debit or credit cards, and you can store them in your digital wallet.
A digital wallet is a smartphone app that securely stores your debit or credit card information and helps you make mobile payments or pay in stores. When you travel or go to the movies, all you need to do is access your mobile wallet on your smartphone to retrieve the e-tickets and boarding passes. When you make a payment with your digital wallet, its software links your payment details stored in it to the vendor in a secure way, without giving away any information. The most popular digital wallets are Apple Pay (for iPhone) and Google Pay (for Android).
A direct bank is a financial institution licensed to offer services remotely and without branch locations. Doing your banking with a direct bank means having an on-demand, digital and mobile experience with no face-to-face contact or in-person operations with a bank representative. Some direct banks provide services through some ATMs or independent banking agents.
A direct debit is an authorized, automatic transaction from your account. You can establish a direct debit rule for specific and periodic payments such as mortgages, utilities, or subscriptions. When you sign a consent for it, you allow an organization to collect money from your account automatically, so you don't have to worry about forgetting to pay the bill, and you don't risk any late fees.
A direct debit mandate is an authorization you give to a vendor or an institution to collect recurring payments automatically from your bank account. After signing a direct debit mandate, you authorize all future payments, but you must be notified prior to each payment. In addition, all payments are covered by a direct debit guarantee, which covers the payment in case of an error.
A direct deposit is an automatic transaction made directly into your bank account, usually by your employer, for the payment of your salary. Some banks are very interested in receiving your salary as a direct deposit each month and can even offer you better conditions and services, such as lower interest rates on bank loans and mortgages. Once the direct deposit is made, it usually takes a couple of days for the money to be available in your account.
E-bills are electronic copies of paper bills or invoices. Just like traditional paper bills, e-bills are documents showing proof of service delivery or a product purchase. To receive e-bills instead of paper bills, you usually need to give the merchant your permission.
An e-wallet, also known as a digital wallet, is a smartphone application or an online service that securely stores your virtual debit or credit card information and allows you to make online purchases or pay in stores. A digital wallet allows you to have all your payment information on your phone or computer and keep your digital tickets and e-vouchers there. When you use an e-wallet to make a payment, it connects your payment details from your bank account to the vendor in a secure way.
The European Banking Authority (EBA) is a non-governmental organization that ensures financial stability in the European banking system. It monitors and oversees the smooth operation of banks by analyzing risks and vulnerabilities. The EBA’s job also includes writing the Single Rulebook, a set of legal acts that all EU financial institutions must follow to protect consumers, investors, and depositors. Find here other EU banking acronyms you may be interested to.
Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) is a financial indicator that measures the profitability of a company without considering financial or tax factors. The most important aspect of the EBITDA is that it indicates how much money a business is making. A positive EBITDA suggests that if a company effectively manages financial expenses, as well as tax, depreciation, and amortization aspects, it can be profitable.
The European Central Bank (ECB) is the European Union’s central bank. It oversees and protects the eurozone’s economic and monetary stability. The ECB is in charge of managing currencies, as well as ensuring the safety of the European banking system and maintaining price stability. The ECB also sets the interest rates at which it lends to European commercial banks and gives countries permission to print euro banknotes. Find here other EU banking acronyms you may be interested to.
Electronic money (e-money) is a payment instrument that does not take the form of bank notes or coins. Instead, it’s stored as information and can be used to purchase goods and services. The money you have in your bank account is e-money, which you can withdraw in cash at an ATM or bank branch. You can also store e-money in an electronic money account different from your own bank account and make payments using an app on your smartphone.
An EMV chip is a small data storage device embedded in a credit or debit card that is used to perform a secure transaction. EMV chips are quickly becoming the most common technology to secure payments, replacing magnetic stripes. A payment card with an EMV chip has more storage capacity than a card with a stripe, allowing it to store encrypted data and reduce the risk of payment fraud.
The Euro Interbank Offer Rate (Euribor) is based on the average interest rates offered by a group of large European banks when lending money to each other in euros for terms ranging from one week to one year. The European Money Markets Institute publishes the Euribor daily. The Euribor is also the most widely used reference for mortgage loans. Find here other EU banking acronyms you may be interested to.
The European Monetary Institute (EMI) was an organization established in 1994 as the second stage of preparing the operational framework for the European Economic and Monetary Union. Its purpose was to help the member states achieve greater socio-economic integration and improve the coordination of their monetary policies. Once the European System of Central Banks and the ECB were created, the EMI was dissolved. Find here other EU banking acronyms you may be interested to.
An exchange rate is the relationship between two currencies that shows the amount of one currency you can buy with another. The exchange rate is set by the central bank in some countries, but in others, only supply and demand determine its value. When people buy more euros, their value increases and the euro becomes more expensive. The euro is one of the most traded currencies along with the US dollar, Japanese yen, and pound sterling. Exchange rates fluctuate, therefore the amount of euros you need to pay for a US dollar today may differ from one day to the next.
Expenses are the regular costs a business has to pay and are directly related to its operations and revenue growth. Payroll, rent, utilities, insurance, advertising, travel, education, and bank fees are all examples of business expenses. If you are a business owner, you are required to document and categorize your expenses. That’s because some of them can be deducted from your taxes, which can help you save money.
Fees are charges that you pay in exchange for a service. For example, restaurants may charge you a fee to cover the cost of delivering your order to your address. Businesses charge fees to cover their administrative and operational costs. Banks may also charge fees for the services they provide, for example cash withdrawals or international transfers.
A financial system is an ecosystem of institutions, markets, means, and instruments that channel and redirect money flows between those who have extra money and want to lend it out in exchange for interest, and others who want to borrow money and are willing to pay interest. The main stakeholders in this system are banks, monetary assets, financial markets, and financial services.
Fintech is a word that combines ’finance’ and ’technology’ to describe businesses that bring together disruptive financial products and technological innovation. This industry delivers new or improved financial services that are digital-first, making them much more accessible and universal than traditional financial services.
A fixed exchange rate is a financial system in which the value of one country’s currency is tied to the currency of another country, or to the value of a commodity like gold. When governments or central banks determine the value of a currency, they do so with the aim of maintaining monetary stability and controlling inflation. Smaller countries often adopt a fixed exchange rate system to encourage foreign investment and create more certainty about exports.
A fixed rate is an interest rate that does not change over time. A fixed rate on a loan or a mortgage means that the monthly installments you pay don’t change, even when there are fluctuations in financial markets or lending rates.
A fixed-term deposit is a financial savings product where you deposit funds in a bank for a specified period of time and at a fixed interest rate. A fixed-term deposit is a low-risk investment, because the money you've invested will earn a fixed rate regardless of market fluctuations, as long as the term is completed without early withdrawals.
A foreign currency is money that’s used in a country other than your own. There are 180 different currencies recognized by the United Nations. The most well-known currencies include the US dollar, the euro, the Japanese yen, the British pound, the Australian dollar, and the Canadian dollar. Each foreign currency has a unique value that is usually determined by the cost to exchange it for a different currency. This is known as the foreign currency exchange rate.
Foreign currency exchange is the process of converting money from one currency to another. You can exchange money when making an international money transfer or when visiting a country that uses a foreign currency. The amount of foreign currency your money can buy depends on the exchange rate between the two currencies.
Foreign Exchange (FX) is a global, decentralized market in which currencies are traded. FX is the world's largest unregulated financial market. Other than a contract between the traders, there is no governmental or central entity to mediate the trade. FX is open for trade 24 hours a day from Sunday evening until Friday evening. Every day, banks, financial institutions, and individuals trade around 5 trillion US dollars in foreign exchange.
Foreign Exchange (FX) is a global, decentralized market in which currencies are traded. There is no governmental or central entity to mediate the trade except for a contract between the traders, which makes FX the world’s largest unregulated financial market. FX is open for trade 24 hours a day from Sunday evening until Friday evening. Every day, banks, financial institutions, and individuals trade around 5 trillion US dollars in foreign exchange. Find here if you want to learn which foreign exchange rate will N26 users get when placing transactions in foreign currencies.
A foreign transaction fee is an extra charge applied to a bank or credit card payment when you make purchases in foreign currencies, withdraw cash from foreign ATM machines, or use your bank card in another country. This additional charge can either be a fixed amount or a percentage of the transaction value. Banks and credit card institutions charge foreign transaction fees for several reasons, including the cost of converting from one currency to another, and processing transactions between multiple financial institutions.
Fraud is a false statement of facts by an individual, group of individuals or an institution, for personal or financial gain. Fraudsters may attempt to trick you into revealing your personal information or account passwords, in an attempt to gain access to the funds in your bank account. Fraud is typically attempted by SMS, phone, e-mail, or even in person. Learn how to stay safer with our complete guide to secure online banking.
N26 Standard is a 100% mobile, free bank account that allows you to manage your daily finances easily and on the go. It takes only a few minutes to open an N26 Standard account, and you can start using it right away. You can access your online account 24/7 on your smartphone, and there are no maintenance fees, minimum deposits, or minimum account balances required.
A friend referral program rewards you when you recommend a product or service to a friend. Typically, you’ll be given a unique referral link to share with friends who may be interested in signing up. Once they’ve successfully signed up, you’ll be rewarded with a referral bonus.
A fund is a collection of money set aside for a specific purpose. For example, you may deposit money every month into a college fund for your children’s future education, or you might build an emergency fund, consisting of money in a specific bank account for unexpected expenses such as large medical bills or major car repairs.
A garnishment is a court order for funds or assets, usually wages, to be seized to cover unpaid debts. For example, someone might be required to pay a percentage of their salary every month to cover unpaid taxes, and this will continue until the full amount is repaid.
The German Deposit Protection Scheme is a private institution legally responsible for guaranteeing the deposits of account holders of German banks in accordance with domestic legislation and EU directives. Should a bank default or go bankrupt, the scheme guarantees deposits up to €100,000.
A girocard is a type of debit card issued in Germany. You can use a girocard to withdraw cash from ATMs and pay for items in stores. To ensure that girocards can be used internationally, they are co-branded with Mastercard (Maestro), Visa (V-Pay), or JCB. Girocards used to be called EC-Card, so this term is still often used to refer to a girocard.
Google Pay is a digital wallet on your phone. You can link a physical or virtual credit or debit card to Google Pay, which then allows you to pay in the store with your smartphone. Google Pay is free and secure because it doesn’t share your card information with the vendor.
A gross salary is the amount of money you are paid by your employer before any deductions or taxes. Keep in mind that the gross pay will always be higher than what will be paid into your bank account. This is because deductions will be made to your salary each month for things like insurance, taxes, and retirement contributions, depending on what country you live in.
Hidden fees are any fees that are not clearly and transparently communicated. For example, when you withdraw cash from an ATM in a foreign country, some banks may charge you an additional currency conversion fee on top of a set transaction fee.
An International Bank Account Number (IBAN) is an identification code for bank accounts that is used globally. It ensures that a bank account can be uniquely identified and guarantees security while making foreign or domestic transactions. An IBAN consists of numbers and letters, which are combined in a unique way to generate a combination specific to your account with a maximum of 34 characters. It includes a country code, branch reference, and bank account number among others. Find here other EU banking acronyms you may be interested to.
Income is the money that people and businesses receive in return for working or selling a product or service. Income can refer to a person’s salary, or to profits received from rent or investments.
Income Sorter is a feature that lets you automatically move money to one of your Spaces sub-accounts every time you receive an incoming bank transfer. You can choose to set aside either a percentage or a fixed amount.
An installment loan is the amount of money you borrow and pay back in installments over a certain period. Typically, it comes with a fixed interest rate and requires making payments over regular intervals.
Installments are a way of repaying a loan. Instead of repaying the entire amount at once, you pay smaller amounts of money at regular intervals over a period of time.
Instant payments are real-time transactions that enable people, corporations, and governments to send and receive money faster and to have funds immediately available.
An instant transfer is an immediate bank transfer between individuals or businesses that is easy to make and receive. Unlike regular SEPA transfers, which are processed within two business days, instant transfers are sent and received within seconds.
‘Insufficient funds’ is a message you’d typically see on an ATM screen or your online banking platform if you don’t have enough money to withdraw cash or pay for a transaction. Some banks may charge an "Insufficient funds" fee if you try to complete a transaction while having insufficient funds.
Insurance is a way to protect you against financial loss. In exchange for a fee you pay periodically, called a premium, insurance covers you against unforeseen losses like medical expenses, damages to your car or home, personal liability, and more.
Interest is the amount that a lender charges when borrowing money. Typically, interest is calculated as a percentage of the amount loaned.
Interest income is the amount of interest generated during a specific period. It is earned from investments that pay interest, such as savings accounts or certificates of deposit.
An interest rate is the cost you pay when borrowing money, expressed as a percentage of the loan amount. It also works the other way around—your bank may pay you interest on the money in your savings account.
An investment bank is a financial institution that helps individuals and businesses with their complex financial needs, such as mergers and acquisitions, raising capital through investment, or going public.
An investment is any asset you buy in the hope that it will hold its value, or even increase in value over time. You can invest in different types of assets like property, currency, stocks, and bonds.
The International Securities Identification Number (ISIN) is an identification number for financial instruments such as bonds and stocks that are traded internationally. This 12-character alphanumeric number is used by most financial institutions and stock exchanges around the globe. Find here other EU banking acronyms you may be interested to.
A joint account is an account with two or more owners who can access, transfer, deposit, and withdraw the money in it. Joint accounts are great for sharing expenses or assisting someone with their finances. Having your money in a joint account with someone requires a substantial amount of trust between you and the other account holders, because they have full access to the funds in the account.
Know Your Customer (KYC) is an important due-diligence process that helps banks and financial institutions fight against fraud and money laundering. It includes customer identity verification and other procedures that help assess any possible financial crime risks. Banks are required to follow these procedures to better understand their customers and the nature of their financial behavior in compliance with anti-money laundering laws.
The Livret A is a savings account offered by French banks. This account is free of charge, and the interest paid is exempt from income tax and social security deductions. The French government sets the interest rate twice a year. All banking institutions can offer the Livret A.
A loan is a financial product that allows you to borrow money. In return, you agree to repay the amount you loan over a period of time. Typically, you’ll also pay interest on the amount that you borrow.
A Maestro Card is a debit card issued by Mastercard used for online purchases, in-store payments or withdrawing cash from an ATM. The card is accepted by vendors internationally and the money is debited directly from your account.
A main account is the bank account you use to make the majority of your day-to-day financial transactions. This account is usually also where your salary is deposited and from where you pay your bills.
Also known as a service fee or an account fee, a maintenance fee is a regular fee banks charge for the banking services you receive. Usually the fee is debited automatically from your account every month.
Mastercard is a payment network that processes card transactions worldwide when you use a credit, debit, or pre-paid card.
A metal card is a credit or debit card made of metal, typically stainless steel. A metal card is issued by a bank or financial institution for making cashless payments, usually as part of a premium bank account offering exclusive benefits to the cardholder.
A minimum balance is the minimum amount of money you need to have in your bank account at all times. If your balance drops below this amount, the bank may charge you a "Minimum Balance" fee.
Mobile banking is a service provided by banks and financial institutions that allows you to do your banking on your smartphone or tablet. Typically, you can view your account balance, send and receive money, and perform a range of other financial transactions—all from your mobile device.
A mobile payment is a transaction you make with your smartphone or tablet. Instead of using cash or a credit card, you can pay from your mobile wallet, which securely holds your card information.
A mobile wallet is a digital wallet on your smartphone or tablet that securely stores your debit or credit card information. You use it to make mobile payments instead of carrying cash and credit cards. The most popular mobile wallets are Apple Pay for iOS devices and Google Pay for Android devices.
MoneyBeam is an instant payment method offered by N26 that enables you to request, send, or receive money between you and any other N26 account holder in seconds. This feature is available to all N26 users. The limit for MoneyBeams is €1,000 per transaction and €5,000 every 24 hours.
A mortgage is a type of loan typically used to buy property, such as a home. A bank or mortgage lender lends you the money you need to buy the property, and in return you pay back the loan over time in installments, usually with interest.
A mutual fund is a type of investment fund that pools money from many investors. A professional fund manager then invests the money in financial assets, such as stocks, bonds, or securities.
Round-Ups is a feature available on N26 premium plans. Enable Round-Ups to automatically save your spare change into a dedicated sub-account every time you spend using your N26 card. To save even faster, you can choose to multiply the amount you set aside by 2, 3, or 5.
A net salary is the amount of money you are paid by your employer after all deductions like social security, health insurance, taxes, and retirement contributions.
Near-field communication (NFC) is a connecting technology based on radio frequency that can transmit information over short distances. It allows two devices to communicate with each other in both directions. NFC is commonly used for mobile payments.
A Non-Fungible Token (NFT) is a unique digital asset verified by the blockchain. The NFT can be an art piece, music or video file, or a tweet, to name a few examples. NFTs are becoming highly sought-after digital collectables with a market value based on how much people are willing to pay for them.
A nominal interest rate is an interest rate that you agree on when you take out a loan or make an investment, without taking into consideration the effects of inflation.
An online bank is a digital bank licensed to offer financial services over the Internet. Banking with an online bank means having an on-demand, digital and mobile experience with no need to ever visit a physical bank branch.
Online banking is the digital version of all the financial services that a traditional bank can offer. Today, most banks offer banking services through the Internet from a desktop computer or a mobile device. You can access your online account 24/7, pay bills automatically, perform transactions, manage your budget online, and much more.
An online payment is any payment for goods or services made over the internet, for example buying something from an online store using your credit card details or paying a bill using online banking.
Open banking is a practice regulated by EU legislation that enables account holders to share their account and transaction information with third-party applications. The main goal of open banking is to create a more accessible, digital ecosystem where more than one stakeholder can offer innovative, data-driven products and services to people.
A one-time use password (OTP) is a randomly generated combination of numbers or alphanumeric characters that authenticates a user for a single transaction or login session. OTPs can also be used as an extra layer of security.
An overdraft is a feature that lets you withdraw or spend more money than you have in your bank account. Because an overdraft is a form of debt, your bank may charge interest and a fee when your account goes into overdraft.
Overnight money is a type of loan that a bank borrows from another for one business day. It has the shortest term a loan can have, therefore it is charged an overnight rate that is virtually the lowest rate at which banks lend money. Banks and other financial institutions usually borrow or lend money on the overnight market to manage their cash needs.
Peer-to-peer (P2P) payment is a payment method that allows you to instantly transfer funds from your bank account to another account over the internet or your smartphone.
A pair device is used to connect devices via Bluetooth and exchange information between them. This connection is based on short-range radio wave technology, and both devices must be compatible with the Bluetooth feature. Pairing devices is like introducing one to the other to establish a link. Find here how N26 pair devices to connedt a smartphoone to a bank account
A pairing code is a number that you may be asked to provide when you want to establish a connection between your smartphone device and another Bluetooth-enabled device. Often called a passkey, this code is required for security reasons. The pairing code is available on the "Settings" menu of your smartphone.
A password is a combination of characters that you use to verify your identity when accessing your phone, e-mail, bank accounts or social media accounts. Learn here how to create a strong password.
A payment service connects a merchant to the broader financial system. They make it possible for merchants to accept credit and debit card payments from customers.
Perks are incentives or rewards offered by a service provider, for example your bank, in an effort to build loyalty among their customer base. Perks can be in the form of travel or shopping discounts, free subscriptions, or access to exclusive services or products.
A personal loan is a sum of money you borrow from a bank or a financial institution for a variety of reasons, such as buying a car, making home renovations, or paying off credit card debt. Personal loans are typically unsecured, do not require collateral, and require you to agree to repay the borrowed amount plus interest within a specified period of time.
Phishing is a type of cybercrime that uses fraud and deception to get people to reveal their personal information. This type of scam typically uses an email, telephone, or text message to make you believe that a legitimate institution is trying to communicate with you. The phishing message conveys urgency and usually asks you to enter your login information and passwords. Check here how to recognize and avoid phishing attacks.
Phone insurance is a type of insurance coverage that covers the cost of repairing or replacing your mobile phone should it be damaged, lost, or stolen.
A Personal Identification Number (PIN) is a code to access and operate a payment account or your bank card. The PIN must be carefully chosen and always kept secret. In electronic transactions, the PIN is also used as a signature.
A Point of Sale (POS) is the place where you make a payment for something you buy. Typically, a POS is an in-store terminal that tells you how much you must pay, processes your card information, and keeps track of all the sales in the store.
A premium account is a high-end bank account that typically offers additional services, benefits, and perks in addition to standard transactional banking These benefits can include travel insurance, partner discounts, and priority customer service.
A prepaid card is a card that you use for purchases just like a normal credit or debit card, but the money you spend has already been pre-loaded on the card. Like gift cards from stores, you can use a prepaid card instead of cash. Learn more about the differences between credit and debit cards.
A prime rate is an interest rate offered by banks to their most creditworthy customers as well as their high net worth clients. Each bank establishes its own prime rate, which is sometimes known as a base rate. The prime rate is used by commercial banks to determine how much interest they charge on consumer loans, credit cards, and mortgages.
Payment Services Directive 2 (PSD2) is a European regulation on electronic payments. It was adopted to improve the process of payment services, card payments, and mobile/online payments, among others. PSD2 ensures easy and safe digital transactions, and protects customers against fraud and payment problems.
A rating is the measure of your financial ability to borrow and repay money. It shows your creditworthiness by demonstrating your ability to meet the terms of your previous financial obligations.
A rating agency is an organization that assesses the financial strengths and weaknesses of a company or an institution. It examines their financial history to determine whether they will be able to satisfy their debt obligations. Rating agencies in Europe are registered and supervised by the European Securities and Market Authority (ESMA).
A real interest rate is a percentage of the principal that shows how much you must pay in addition to the borrowed amount of money or earn from an investment once the inflation rate is considered. The purchasing power of money fluctuates over time. Inflation is influenced by money supply and demand as well as government policy. As a result, subtracting the real inflation rate from the nominal rate will give you the real interest rate.
A reference interest rate is the interest rate that a central bank will charge commercial banks for loans. This interest rate has an impact on the rates banks use to charge consumers for loans or offer on investments.
Refinancing is when you replace an existing loan with a new loan that offers better terms and conditions, such as a lower interest rate or fees.
A refund is a repayment of money for something that you’ve already paid for. When you buy a product or service, for example, and you are not satisfied with it, you may request your money back. You may also receive an annual tax refund on your income taxes if you have contributed more than what you’re required to pay. N26 users can check their refunds in the app on the day of the original transaction.
Relevé d’Identité Bancaire (RIB) is a bank identity statement that includes information about the holder of a bank account and the bank details. The number is used to perform transfers to other French and foreign banks, as well as to receive your salary. The RIB is also made available to public services and the Social Security for the transfer of benefits. The RIB is a convenient way to pay for recurring and monthly expenses including rent, phone bills, and utility bills.
A routing number is a unique identifier for banks in the United States. It is a nine-digit combination that shows where your bank account was opened. If you’re making a payment over the phone or online, or if you’re setting up automatic bill payments, you’ll need to provide both your account number and routing number.
Rules is a N26 feature that allows you to move money automatically from your account into one of your Spaces sub-accounts. For example, if you’d like to save up for a holiday, you can create a rule to transfer a set amount of money to your holiday Space every month.
Safe custody is a service offered by some banks and other institutions to safely store important documents and valuables. Items commonly requested to be held in safe deposit boxes include property deeds, wills, and other valuables.
A savings account is a financial product that generates interest in exchange for depositing your saved money in the account. Keeping your money in a savings account offers various advantages—the money will earn some interest, there is no fixed term to keep money in the account, and you can usually withdraw your funds at any point.
Strong Customer Authentication (SCA) is a requirement implemented in the European Economic Area that confirms your identity and strengthens the security of card payments at physical points of sale and online payments. The SCA aims to reduce fraud and increase customers’ trust in online payments.
A scheduled transfer is a convenient way to pay recurring bills. You choose the date and the frequency of the transfer in advance, and the money is automatically transferred at the scheduled time.
Security is the practice of keeping your goods and assets safe. When it comes to your money, security refers to all the procedures your bank implements to make sure your deposits, transactions, passwords, and personal information are always protected. Both online and traditional banks must meet strict controls on security, compliance, and financial crime prevention.
The Single Euro Payments Area (SEPA) is a European payment system that allows individuals, businesses, and other economic agents to send and receive payments in euros. SEPA enables payments between accounts in the SEPA area to be performed as easily as domestic transfers. Find here other EU banking acronyms you may be interested to.
A service charge is a charge or a fee you must pay for a service you receive. For example, a restaurant may charge a delivery fee to cover the cost of delivering your order to your home. Banks may also charge fees for the services they provide, for example, money withdrawals, international transfers, or safe deposits.
Simple interest is the amount of money you’re expected to pay back when borrowing money from a bank or a financial institution. It’s a percentage of the loan’s principal capital that’s added to the amount you must pay back. Simple interest is frequently used for short-term loans such as auto loans or personal loans.
A smartphone is an Internet-connected electronic device that combines the functions of a phone with a computer. Smartphones can also be used as media players, digital cameras, video cameras, and GPS navigators. The operating system gives the device advanced computing capabilities. It runs apps and enables you to download, edit, and share files.
Solvency is the ability of a company or an individual to pay their financial obligations and debt. Being solvent means that your assets are worth more than your liabilities.
A sort code is a six-digit number used by banks in the UK as an identification code. It is an essential part of every online transaction. The sort code is split into three pairs, which together identify the bank and branch where the account was opened. This six-digit number helps determine where a payment comes from and verifies that it is sent to a valid financial institution that can process the payment method.
A split payment is a method of dividing a single payment among multiple people. It’s an easy and quick way to share a tab at a restaurant among friends or pay for a shared birthday gift.
Secure Sockets Layer (SLL) is an Internet security protocol based on encryption. SSL encrypts data communicated over the Internet to provide a high level of privacy. As a result, anyone attempting to intercept this data will instead be confronted with a jumble of characters which is impossible to comprehend.
A standing order is an automatic and periodic payment of a fixed amount to cover regular bills such as rent or mortgage. You need to give your bank permission to set up a standing order, including the amount, frequency, and duration.
A statement is a report that sums up your bank account activities over a specific time period. It is a valuable tool to track your money and flag potentially fraudulent transactions or payment errors. In your monthly statement, you can track all the account movements, including income and outgoing payments.
A sub-account is a separate account that sits alongside your main account. Sub-accounts are a great way to better manage your money, set aside funds for specific incoming payments, or save for a holiday.
A surcharge is an extra charge or tax added to the price you pay for a product or service. It can be a fixed amount or a percentage of the total value.
A swap is an exchange of one financial instrument for another, for example, a variable interest rate for a fixed rate. The purpose of a swap is to transform one payment model into another that better fits your financial needs, such as having a better predictability of what you will pay for a loan.
Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a global payment network that ensures safe and smooth international transactions. The SWIFT code is between 8 and 11 characters long and identifies the bank, the country, the city, and the branch. Find here other EU banking acronyms you may be interested to.
Tasa Anual Equivalente (TAE) is a percentage-based reference that shows all the charges related to your loan, such as bank commissions and fees, insurance premiums, and so on. These charges are added to the nominal interest rate of your loan.
A transaction authentication number (TAN) is a one-time code used when you make online payments. It offers an additional security layer for your transaction and helps avoid fraud.
Taxes are mandatory payments collected from individuals and businesses by their local, regional, or national government. The amount of tax each person pays is decided by each government along with how the levied taxes are spent. Taxes are used to pay for social services like public education, infrastructure, and social security.
Terms & Conditions refer to the legal documentation that represents the contractual agreement between a business and a customer. It sets out the roles, rights, obligations, and limitations of both parties and protects their interests.
A time deposit is a savings account that pays an interest rate on your money for a fixed term. A condition for you to earn the stated interest is that money remains in the account for the duration of the term without any withdrawals.
Tipo de Interés Nominal (TIN) is the interest rate on the money you have borrowed or invested. It is a percentage that shows what you must pay in addition to the principal of your loan. When investing, it shows what your earnings will be in addition to the invested capital. TIN doesn’t include the expenses for the financial operation, fees, or charges.
A top up is the process of adding money into your bank account to increase your available balance. When you top up an account, you cover any upcoming payments, avoiding insufficient funds or an overdraft. You can top up with a bank transfer, credit or debit card, or instant transfer.
A transfer is a domestic or international electronic payment from one person or entity to another. You can make a bank-to-bank transaction, a payment with your digital wallet, or an instant transfer.
A variable interest rate is a loan interest rate that fluctuates over time. It is tied to a reference index (the most common being the Euribor). If the Euribor falls, the interest on your loan also falls.
Value Added Tax (VAT) is a general tax on products and services in the European Union that consumers pay. It is a percentage added to the price of the products and services.
A virtual card is a digital version of your payment card. You store it in the digital wallet on your smartphone. Your virtual card is securely encrypted and can be used for in-store purchases or online. Just like a physical card, it has a unique number, expiration date, and CVC.
Visa is an electronic payment solution that processes transactions worldwide when you use your credit, debit, or pre-paid card. It connects you with the retailer and your bank when you make purchases.
A web app is a website designed to be accessible from any computer, smartphone or tablet. Unlike mobile apps, it’s not necessary to download a web app. To access it, you need an Internet browser on any connected device.
A wire transfer is a domestic or international electronic payment that is made across a network of banks or transfer agencies. It is a way to move money quickly and safely from one person or entity to another.
Withdrawing money means exchanging the funds in your bank account for physical cash. You can make a withdrawal from an ATM, a bank representative, or a POS terminal by using your physical or virtual card.
The World Bank is an organization affiliated with the United Nations with a mission to eradicate extreme poverty and promote shared prosperity by financing projects and assisting the economic development of member states. The World Bank also helps the world’s poorest countries with grants and low-to-zero-interest loans for projects and programs.
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