Definition and Examples of Banks Banks are financial institutions that offer various services to the public that make handling daily financial activities easier. They exist as safe places to deposit your money and receive a return you wouldn’t get by keeping your money at home. In addition, they provide credit for consumers, governments, and businesses short on cash. For example, Chase is a major bank. It offers services and products such as checking or savings accounts, loans, credit cards, investment and portfolio management, and wire transfers....

This rule exists for rare cases when the standard protocols for bankruptcy don’t provide enough clarity for the trustee and the court to make their decisions. The Rule 2004 exam allows the trustee to make a deeper inquiry into the debtor’s finances to clarify any issues or problems that aren’t resolved. They can call a variety of witnesses to testify to conduct this examination. How a Bankruptcy Rule 2004 Exam Works The filer in a bankruptcy case (the debtor) has to provide a large amount of information to the court, the court-appointed trustee, and the creditors in the case....

A co-signer is something like a backup plan for the lender. They usually have above-average credit and a solid income. Lenders are more confident about approving a loan when two people are responsible for repaying it, and one of them, at least, is highly qualified as a borrower. How a Loan With a Co-Signer Works Lenders are more likely to offer favorable loan terms when a co-signer is involved, such as a lower interest rate, more flexible repayment terms, and lower fees....

Direct purchase plans avoid broker fees and can be a good way for small investors to add individual stocks to their portfolios starting with relatively small amounts of money, typically $500 or less. Find out more about direct stock purchase plans, how they work, their pros and cons, and what they mean to individual investors. Definition and Example of a Direct Stock Purchase Plan As the name indicates, a direct stock purchase plan allows an individual investor to buy shares of a company’s stock from the company itself or, most commonly, through the company’s selected agent....

It recovered most of its lost territory by the end of the day. The euro plunged to a one-year low against the dollar. A flight to safety drove gold up to $1,200 an ounce. It knocked the 10-year Treasury note yield down to 3.4%. How Does a Flash Crash Work? An extremely large block of trades can usually set off a flash crash. Computer trading programs make any crash worse....

For an insurer’s expenses to qualify as improving the quality of its healthcare, they must lead to measurably better patient outcomes, safety, or wellness. For example, that might include: Enhancement of health information technology to improve quality, transparency, or patient outcomesProvider credentialing to establish its ability to give proper carePrograms to help individuals manage serious health conditions such as cancerHospital discharge planning to reduce the frequency of hospital readmissions...

Making the minimum monthly payment on time each month also helps you build a good credit history. Learn more about what a minimum monthly payment is and how it fits into your financial life. Definition and Examples of a Minimum Monthly Payment The amount of the minimum monthly payment due is the least amount of money you can pay a credit card issuer each month to avoid penalties. If this payment is not made on time, credit issuers can issue a late fee, increase the annual percentage rate (APR), and report delinquency on the account to the major credit bureaus....

Investors can use many different strategies to trade stocks. Some people buy assets and hold them for the long term, others make frequent trades, buying and selling stocks daily. Let’s learn about how day traders can face higher risks than other investors and interact with their brokers quite differently as well as about the rules for pattern day traders. Definition and Example of a Pattern Day Trader The Financial Industry Regulatory Authority (FINRA) defines a pattern day trader as someone who executes four or more day trades within a five-business-day period or someone who “has a reasonable basis to believe” that they will execute such trades....

How Private Student Loans Work Private student loans work like most other types of loans. You check a lender’s eligibility requirements and apply for the student loan that looks like a good fit. If approved, you will receive a lump sum to pay for your education program and related expenses. You will repay the loan, plus interest, over a set term. For example, Citizens Bank offers undergraduate student loans up to the total cost of education or the maximum qualified loan amount, whichever is less....

Alternate name: Verification of deposit With a proof of deposit, a mortgage lender can see that you have the money you need to make mortgage payments or cover down payment and closing costs for buying a house. It shows whether the money in your account came from a legitimate source, which helps the lender determine if you can afford mortgage payments. In contrast, if the money is from, say, a gift, the bank will not expect you to receive those deposits regularly....

For example, stocks and bonds purchased in a retirement plan or through a brokerage account are transacted on secondary markets. Let’s say you have two portfolios: one is an employee stock ownership plan and one is with a discount brokerage. When you buy stock directly from the company as with the first plan, it is a primary market transaction. When you buy in the discount brokerage account through stock exchanges, it is a secondary market transaction....

Knowing the difference between short-term and long-term losses can help you optimize your investment strategy and tax management. Definition and Examples of Short-Term Losses A short-term loss typically occurs when you sell an asset you’ve held for one year or less at a lower price than you paid. The IRS classifies asset gains and losses because, at tax time, a sale’s classification determines the type of taxes you may have to pay....

Alternative names: Top-hat plan; “golden handcuffs” The “non-qualified” nature of a SERP means that it doesn’t have to follow the same rules of IRS qualified plans, such as 401(k)s. The “deferred” status of the plan means that the firm agrees to pay the worker at some future time. The firm makes a promise to pay benefits in the future when a SERP is not funded. It places the assets in an escrow or trust account when the plan is funded....

A sweep account can be paired with a bank or brokerage account and automatically transfers funds at the end of each business day. The funds are transferred into a higher interest-earning investment option, often times a money market mutual fund. So, how exactly does a sweep account work? Let’s say you have a sweep account with a minimum sweep amount of $5,000. Any time your balance exceeds $5,000 at the end of the business day, the amount in excess will automatically be transferred to the designated account with the higher interest rate....

Keep reading to understand how a two-sided market can help investors get a better sense of their roles in financial transactions. Definition and Examples of a Two-Sided Market A two-sided market must have an intermediary who connects two customers or market participants to conduct transactions. Generally, both sides of a two-sided market strengthen the platform as a whole to benefit each side. For example, a stock exchange (the intermediary) needs buyers and sellers to function....

There are three important things to know about add-on interest: Interest is charged one time, in advance, and added to the loan balance. The amount of interest added to your balance is not based on a decreasing loan balance, like with a home mortgage. It’s based on the amount you originally borrowed, then multiplied by the number of years in the term of the loan. If you opt for a loan with add-on interest and decide to pay it off early, you won’t save any money....

How To Find and Use ABA Numbers You can get your account’s ABA number from several sources. The easiest solution is to locate the numbers at the bottom of one of your checks if you have a checkbook handy. On Paper Checks An ABA number is printed on every check. It’s usually the nine-digit number in the bottom left-hand corner on personal checks. The number might appear somewhere else on computer-generated checks (like online bill payment checks or business checks)....

Investing in agency bonds, or “agencies,” can help with diversification that provides tax advantages. Understanding how agency bonds work, along with their advantages and disadvantages, can help you to decide whether to include them in your portfolio. Definition and Example of Agency Bond An agency bond is a bond that’s issued by or guaranteed by U.S. federal agencies or government-sponsored enterprises. A GSE is a corporation that’s created by Congress to fulfill a specific purpose, such as promoting affordable housing....

Any portion of the medical expense not covered by the insurance company, such as a deductible or a co-pay, will be billed by the provider. These charges should be paid directly to the provider. The precise layout and form of the EOB will vary by insurance company, but a simple EOB will include: A summary of your account with important identifying information and claim number.The details of the claim, including the date and specific services provided....

In general, independent insurance agents sell: Property insurance (such as homeowners, renters, and auto insurance) Life and health insurance Small business insurance and employee benefit plans Retirement products Non-standard auto insurance such as non-owner policies How Does an Independent Insurance Agent Work? Some independent agents work for themselves, selling products from multiple insurance carriers. They may be required to complete company-specific training or apply and get approved to sell a company’s insurance....