Have you ever felt like words used in banking were their own language?
English banking terms can seem foreign even to native speakers, but they’re useful for everyone.
You may want to get a job in a bank.
Or you may simply be doing business in English, and you feel the need to understand some banking-related words.
We’ve selected 30 useful terms that you’re likely to come across in banking.
Pretty soon, you’ll be using them and seeing them everywhere.
How to Learn the Banking Terms in This Post
First of all, have a look at every new word or phrase below. Even if you feel you may already know some of them, it’s important to make sure. Sometimes we recognize words and think we know them—then, when we need to use them, we simply can’t think of them. That’s why many English learners say, “I understand everything, but it’s so difficult when I have to speak!”
After reading the word and the explanation, have a look at the example. Next, try to come up with your own example! This is the most important step. It will help you move from just recognizing the word to actually being able to use it on your own. Use it in separate sentences first. Then try including it in the next writing task you have to do, if it fits. Finally, you’ll see that you’ll be able to use the word in speaking as well, and faster than you thought you could!
With these kinds of very specific business words, it’s also a good idea to translate them into your native language. Normally, you should avoid translating, because this slows you down when you write and when you speak. But it may be useful to translate words when you first learn them so that you make sure you got the meaning right.
Another important step to learn these terms (and others!) is by hearing them used in natural speech. You can do this on FluentU, which takes real-world videos—like business dialogues, inspiring speeches, news and more—and turns them into personalized English lessons.
FluentU has a huge collection of English videos that people in the English-speaking world actually watch.
More to the point, FluentU has an entire business category filled with authentic business-related videos covering six language levels.
To show the variety of videos even inside this single category, real-world business videos on FluentU include “Introducing Business Colleagues,” “Business Buzzwords,” “Control Your Inbox!” and “What Warren Buffet Thinks About Cash.”
An added bonus is that if you want to work on other topics later, simply use the same, familiar FluentU platform to learn with videos from other categories, such as “Science and Tech,” “Politics and Society” or mix it up with “Arts and Entertainment” or “Health and Lifestyle.”
Every spoken word is subtitled, complete with an in-context definition, image and multiple example sentences.
All you have to do is tap or click on one of the words in those subtitles to get more information. For example, if you tap on the word “brought,” you will see this:
Plus, these great videos are all accompanied by interactive features and active learning tools, like multimedia flashcards and fun games like “fill in the blank.”
If you are interested in watching fun, relevant videos and practicing language actively in the process, be sure to create a FluentU account and try it out on your computer, iOS or Android device!
At the end of this list, you’ll find an exercise that will help you check what you remember from this post. You can check your own answers because there’s a key to the exercise. You should also do other online vocabulary exercises with banking words, so we’ve provided some useful links after the list of banking words.
Now that you know how to learn banking terms, here are 30 you should start learning right now!
30 English Banking Terms Every Businessperson Should Know
You can have a checking account and a savings account. The checking account (also called current account in British English) allows you to take out money anytime you want. The savings account allows you to save money and also earn interest (see below).
“He needed to transfer some money from his savings account to his checking account so that he could pay for the new car he wanted to buy.”
Credit is the money you receive in your bank account or the money a bank lends you. Credit can also refer to the financial reputation (background or record) you have when you’re considering borrowing money from a bank. A credit card is a card that allows you to spend more money than you have, but then you have to pay interest. The word credit can also be used in a general sense: When you give someone credit, you acknowledge their efforts or worth.
“His credit was good, so he didn’t expect the bank to reject his loan application.”
This is money taken out of your bank account or money you owe. A debit card allows you to use the money in your account by paying in stores or online. You can also use this card by getting money from a cash machine or ATM (see below). In addition, you can use this word as a verb: To debit money means to take out money from an account.
“I prefer using a debit card, because I’m not tempted to spend more money than I have in my account.”
“The bank debited the money from his account.”
Your balance is the money you have in an account. This is the difference between what you spend (debits) and what you receive (credits).
“I need to check my balance before completing the transaction (exchange).”
A loan is money you borrow from a bank or another institution or person. The bank lends (gives) you the money, and you borrow (receive) it. The bank is the lender, and you are the borrower.
“They needed a loan to buy the car of their dreams, but they couldn’t find a lender.”
6. Student Loan
Student loans are loans that are used by borrowers to pay for education fees. Students loans are supposed to be paid back once the borrower finishes studying and starts working. Some lenders offer student loans at lower interest rates (see below).
Example: “You need to get a good job right after you graduate, or you’ll be paying for your student loan for a long time.”
A debt is a sum of money that’s owed. You can also use the word in a general way: If you are in debt to someone, it can mean you owe them a favor or are grateful for something.
“He couldn’t pay his debt, so he had to sell his car.”
8. Interest Rate
If you borrow money from a bank, you’ll need to pay it back. In addition to this, you’ll need to pay interest. The amount of interest is decided by an interest rate, which is calculated for a given period of time. If you have a savings account, the bank will pay you interest for being able to use your money over a certain period of time.
“He was researching the banks that offered the lowest interest rate for loans.”
9. To Withdraw
To withdraw money is to remove money from an account.
“He wanted to withdraw some money from his checking account, but he forgot his card at home.”
10. To Overdraw
To overdraw is to try to withdraw more money than you have in your account. In this case, you generally have to pay some extra fees. It’s advisable (a good idea) to pay attention to your balance so you don’t overdraw money.
“He was careful not to overdraw money from his account, because the penalties are quite high with his bank.”
This is money that you withdraw from your account when you no longer have available funds. This is like a loan the bank gives you.
“She received an overdraft notice when she spent more than she had in her checking account.”
ATM stands for Automated Teller Machine, which is a machine that helps you make bank transactions just by using your card. The word teller refers to the bank clerk who helps you with transactions. Cash-point or cash machine are also used.
“I need to stop at the ATM to take out some cash.”
13. Direct Debit
This is an arrangement to make regular payments of different amounts, usually for utilities (services like electricity and water) or credit card bills. By using direct debit, you avoid having to make monthly transactions.
“He used a direct debit for his mobile phone bill.”
14. Standing Order
This means an arrangement to make regular, fixed payments automatically from one’s account. Standing orders are different from direct debits because the amount paid cannot vary (change).
“He kept forgetting to pay his loan installments so he decided to go for a standing order.”
15. Deferred Payment
A deferred payment is a payment that’s postponed (put off) for a later date because you cannot complete the transaction when you would normally complete it.
“He was going abroad for a month, so he decided to use deferred payment for his electricity bill.”
A bank statement is a list of all the transactions that happened in a bank account over a certain period of time. It shows all the debits, the credits and the balance.
“He wasn’t sure why his balance was so low, so he asked for a bank statement.”
17. Personal Identification Number (PIN)
This is a secret combination of numbers that only account holders can use to access their accounts.
“After three failed attempts to remember his Personal Identification Number, he had to contact the bank.”
18. Safety Deposit Box
A safety deposit box is a safe that the bank rents for people to store their valuable items.
“After having his house broken into twice, he decided to keep his important documents in a safety deposit box.”
19. Credit Limit
Your credit limit is the maximum amount of money a bank will let you borrow based on your financial situation.
“After she reached her credit limit, she decided to spend less and save more.”
A mortgage is an agreement by which someone can borrow money from a bank to buy a house. The bank becomes the owner of the house until the debt is paid up.
“They need to take out a mortgage to buy a house.”
This is something, like a house, that’s used as a guarantee (assurance or backup) when taking out a loan. If the borrower cannot pay the debt, the bank becomes the owner of the collateral.
“She didn’t have any collaterals, so she decided to take out a mortgage.”
Appraisal is the evaluation of the value of a property, usually done by a bank representative. An appraisal is usually carried out before taking out a mortgage.
“They wanted to use their house as collateral for the loan, but first the bank needed to appraise its value.”
A guarantor is a person who agrees to pay for someone else’s debts, if this person cannot pay.
“His parents offered to act as guarantors for his student loan.”
This is the complete payment of a loan.
“She was feeling relieved that she had completed the payoff of her debt last month.”
A clause is a part of a contract that gives details about a certain situation that’s covered by the contract.
“All the bank contracts have a clause that specifies the bank charges and the interest rate for a specific account.”
Prepayment is settlement of a debt before the due date. Sometimes there are prepayment penalties that banks charge in this case.
“She forgot to check the prepayment clause and was quite surprised to see she had penalties to pay to the bank.”
27. Bank Charges
Bank charges are all the fees a bank requires you to pay in exchange for its services (using a credit or a debit card, making transactions, taking out loans). Bank charges can also be referred to as commissions.
“He chose his bank carefully, by looking not only at the interest rates, but also at all the bank charges.”
28. Business Days
Business days are days on which a bank or business is open. Similarly, business hours refers to the hours when a bank or business is open.
“You can only complete transactions in the bank on business days, but you can use Internet banking (see below) whenever you want.”
A branch is a location where a bank offers services to customers.
“This bank only has three branches in the city, but there are plenty of ATMs.”
30. Electronic Banking
Electronic banking is a system that allows customers to complete banking transactions on the Internet. It’s also called online banking, Internet banking or e-banking.
“Customers find electronic banking very convenient because they no longer need to go to the bank to make transactions.”
Multiple Choice Vocabulary Exercise
Now have a look at this vocabulary exercise and test yourself! Choose the right word from the three options provided.
1. She decided to open a ___ account at the bank that offered the best interest rate available on the local market.
A. saving / B. savings / C. saved
2. If you’re not sure your ___ is correct, you should ask for a bank statement.
A. balance / B. total amount / C. money
3. She preferred using a ___ card rather than a credit card because she sometimes had a tendency to spend too much.
A. debited / B. debit / C. debitable
4. Avoid ___ money from your account by keeping track of your transactions online.
A. withdrawing / B. overdrawing / C. removing
5. He realized that paying all his utility bills was taking way too long, so he decided to give ___ debit a try.
A. direct / B. standing / C. straight
6. He forgot to make arrangements for ___ payment while he was abroad, so he was worried he would have his electricity cut off.
A. delayed / B. postponed / C. deferred
7. Having a credit ___ is a good way to limit the effects of credit card fraud.
A. limitation / B. limit / C. measure
8. If she had known about the penalties, she wouldn’t have considered ___ such a good option.
A. advance payment / B. prepayment / C. early payment
9. As he didn’t have any collaterals, he needed a ___ to take out a loan.
A. guarantor / B. guarantee / C. warranty
10. You may find yourself in the unpleasant situation of having to pay a lot of bank ___ if you don’t research banks carefully before taking out a loan.
A. taxes / B. tariffs / C. charges
11. As they didn’t want to live in a rented apartment, their only option was to ___ a mortgage.
A. take away / B. take up / C. take out
12. The interest ___ wasn’t the best on the market, but she chose that bank because it had been recommended to her by her parents.
A. rate / B. rating / C. level
If you want to practice new words by matching them with their definitions, here’s another exercise you can try.
Whenever you learn new words after doing such exercises, remember to make your own examples with them. That’s the best way to learn a language: By using it!
Make sure you check the pronunciation of new words in an online dictionary by clicking on the little speaker sign. Then, keep using the new words as often as you can. This will help you use them on your own in speaking or in writing.
Learning banking vocabulary will not only help you when you’re working in or doing business with a bank.
You’ll also feel more confident when doing any kind of business in English.
Which means you’ll be a more successful businessperson!
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