Glossary

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G

Grace Period


The length of time between the use of credit to make a purchase and the start of interest on the amount charged.

H

Home Equity Line of Credit


line of credit secured by the equity in a home. Can be used for home improvements, debt consolidation and other major purchases and expenses. Interest paid on the loan is generally tax deductible (consult a tax adviser about interest deductibility). Upon approval, a credit line limit is established; in most cases, the borrower can tap into the credit line by writing line of credit checks or getting an advance. See also, home equity loan.


Home Equity Loan


A loan secured by the equity in a home. Can be used for home improvements, debt consolidation and other major purchases or expenses. Interest paid on the loan is generally tax deductible (consult a tax adviser about interest deductibility). Upon approval, money is paid in a lump sum. See also, home equity line of credit.

I

Insufficient Funds


When a member’s account does not contain enough money to cover a check or withdrawal ticket presented for payment; also referred to as non-sufficient funds. Also see NSFoverdraft protection and bounced check.


Interest Rate 


The rate paid on an interest-bearing account, such as savings, share certificates and some checking accounts; also, the rate charged on a loan or line of credit. Different types of accounts and loans pay or charge different rates of interest.


Interest Transfer


A process that allows interest earned in one account to be transferred to another account. For example, interest earned on a share certificate can be automatically transferred at maturity to a designated checking account.


IRA


Individual Retirement Account. A retirement account that provides you with tax advantages. There is a limit to the amount you can contribute annually. Contribution and withdrawal rules also are based on the type of IRA: traditional (either deductible or non-deductible) or Roth.