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By Ana Maria Hopartean Last updated:

English for Banking: 49 Key Terms

English banking terms can seem foreign even to native speakers, but they’re useful for everyone.

If you’re studying business English or economics, knowing some banking terms will also help you a lot with your vocabulary.

We’ve selected 49 of the most useful business English banking vocabulary that you’re likely to come across to help you get started. 

Contents

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1. Account

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).

Example:

“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.”

2. Credit

Credit is the money you receive in your bank account or the money a bank lends you. 

The word credit can also be used in a general sense: When you give someone credit, you acknowledge their efforts or worth.

A credit card is a card that allows you to spend more money than you have, but then you have to pay interest. 

Example:

“He used a credit card to book a vacation for the entire family.”

3. Debit

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.

Examples:

“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.”

4. Balance

Your balance is the money you have in an account. This is the difference between what you spend (debits) and what you receive (credits).

Example:

“I need to check my balance before completing the transaction (exchange).”

5. Loan

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.

Example:

“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.”

7. Debt

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.

Example:

“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.

Example:

“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.

Example:

“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.

Example:

“He was careful not to overdraw money from his account, because the penalties are quite high with his bank.”

11. Overdraft

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.

Example:

“She received an overdraft notice when she spent more than she had in her checking account.”

12. Automated Teller Machine or ATM

ATM stands for Automated Teller Machine, which is a machine that helps you make bank transactions just by using your card. Cash-point or cash machine are also used.

The word teller refers to the bank clerk who helps you with transactions.

Example:

“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. 

Example:

“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).

Example:

“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.

Example:

“He was going abroad for a month, so he decided to use deferred payment for his electricity bill.”

16. Statement

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.

Example:

“He wasn’t sure why his balance was so low, so he asked for a bank statement.”

17. Personal Identification Number or PIN

This is a secret combination of numbers that only account holders can use to access their accounts. It’s often simply referred to as your PIN. 

Example:

“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.

Example:

“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.

Example:

“After she reached her credit limit, she decided to spend less and save more.”

20. Mortgage

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.

Example:

“They need to take out a mortgage to buy a house.”

21. Collateral

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.

Example:

“She didn’t have any collaterals, so she decided to take out a mortgage.”

22. Appraisal

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.

Example:

“They wanted to use their house as collateral for the loan, but first the bank needed to appraise its value.”

23. Guarantor

A guarantor is a person who agrees to pay for someone else’s debts if this person cannot pay.

Example:

“His parents offered to act as guarantors for his student loan.”

24. Payoff

This is the complete payment of a loan.

Example:

“She was feeling relieved that she had completed the payoff of her debt last month.”

25. Clause

A clause is a part of a contract that gives details about a certain situation that’s covered by the contract.

Example:

“All the bank contracts have a clause that specifies the bank charges and the interest rate for a specific account.”

26. Prepayment

Prepayment is settlement of a debt before the due date. Sometimes there are prepayment penalties that banks charge in this case.

Example:

“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.

Example:

“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.

Example:

“You can only complete transactions in the bank on business days, but you can use internet banking (see below) whenever you want.”

29. Branch

A branch is a location where a bank offers services to customers.

Example:

“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.

Example:

“Customers find electronic banking very convenient because they no longer need to go to the bank to make transactions.”

31. Bank guarantee

A bank guarantee is a promise made by a bank that if a borrower fails to repay their loan, the bank will step in and make the payment for them.

Example:

“After months of negotiations, the deal was finally signed when Acme Company agreed to provide us a bank guarantee.”

32. Bank transfer

A bank transfer is the act of moving money between two banks, or two bank accounts.

Example:

“To answer the customer’s question, I emailed the bank. I was told that bank transfers usually take between one to three working days.”

33. Credit history

Your credit history is a record of your habits and behavior in paying and repaying your debts and loans.

It shows how responsible you have been in handling what you owe to banks, financial institutions, etc.

Example:

“One thing is for sure, our company has never had problems applying for loans because of our excellent credit history.”

34. Blank check

A blank check is a check that has been signed but on which the amount has been left blank, giving you the freedom to fill in any amount you wish. 

Example:

“Moving closer to the office has cost me a whole month’s salary. It would be nice if someone would give me a blank check to furnish the place.”

35. Bounced check

A bounced check is one that the bank is unable to process due to insufficient funds (not enough money) in the account.

When this happens, the bank returns (or bounces) the check and charges the account holder a penalty fee.

Example:

“I’m sorry, but our company doesn’t accept personal checks anymore because of our past experience with bounced checks.”

36. Automatic payment

An automatic payment is an arrangement where you authorize your bank to deduct (take out) money from your account for your bills, rent, insurance or other routine payments.

Unlike direct debits where the amount can change, automatic payments are usually the same amount each time. 

Example:

“If you’re a frequent business traveler, setting up automatic payments will ensure you never miss your bill payments, even when you’re overseas.”

37. Annual fee

An annual fee is a yearly fee your bank or credit card company charges you for the use of your credit card.

Example:

“Due to the annual fee, I can only afford to have one credit card.”

38. Foreign currency

Foreign currency refers to the currency, or system of money, used in a particular country.

Example:

“Before you travel overseas on business, it’s a good idea to carry some cash in foreign currency for things like bus or taxi rides, or even a cup of coffee.”

39. Exchange rate

The exchange rate refers to how much one country’s currency is worth in another country’s currency.

Example:

“Since you travel overseas so often on business, you must be keeping an eye on the exchange rates of countries you frequently visit.”

40. Joint account

A bank account held by more than one person is called a joint account. Each account holder has the right to withdraw from and deposit money in the account.

Example:

“Since we’re going to be partners in this new startup, I think we should set up a joint account.”

41. Down payment

A down payment is the initial (first) amount paid at the time of purchasing big items such as a house or car, with an agreement to make full payment later.

Example:

“My business partner and I have made a down payment on an office space in the downtown district.”

42. Available balance

The available balance is the amount of funds in your bank account that you’re able to use, withdraw or transfer. This excludes transactions that are currently pending (not yet completed).

Example:

“To avoid any issues of trust, it’s best to check your available balance before issuing a company check.”

43. Fiscal year

The 12-month period of time that companies and businesses use for financial purposes is referred to as a fiscal year. This may be different from the year on the calendar (see below).

Example:

“We’ve been working hard to secure more projects that we hope will boost our earnings in the next fiscal year.”

44. Calendar year

A calendar year is something we’re all familiar with. It’s the period of 12 months beginning January 1 and ending December 31, as shown on a calendar.

Example:

“In our business, we make our financial projections based on the fiscal year rather than the calendar year.”

45. Billing cycle

A billing cycle is used in business to refer to the interval (period of time) between one invoice period and the next.

Billing cycles are usually recurring, or set to repeat every month.

Example:

“It’s strange that my internet service provider uses a billing cycle of 90 days instead of the usual 30 days.”

46. Charge card

A charge card is a special type of credit card that doesn’t charge you interest, but requires you to pay your balance in full before the due date.

Example:

“You may have heard of these two well-known charge cards: American Express and Diners Club.”

47. Combined balance

A combined balance is the total amount of funds in all of your linked bank accounts.

Example:

“My bank statement reflects my combined balance. I can see at a glance the grand total in my savings and checking accounts.”

48. Depreciation

Depreciation is the decline in the value of a capital asset (property), such as vehicles and machinery, over time.

Example:

“After depreciation, our company’s 5-year-old truck is worth less than 50% of its original price.”

49. Maturity date

The maturity date is the date on which financial products such as investments, loans and insurance policies are set to mature.

When these products mature, the principal (the amount loaned) and interest then become due for payment.

Example:

“We have to ensure we have the funds to cover our outstanding business loan before the maturity date.”

English for Banking: Practice Quiz

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

13. When they decided to purchase their first home, they first had to make a ___ on the house.

A. joint account
B. down payment
C. automatic payment

14. She didn’t have any issues taking out a loan for her new business, because of her excellent ___ .

A. credit history
B. bank guarantee
C. appraisal

15. Before traveling, he always checks the ___ between dollars and the local currency.

A. depreciation
B. maturity date
C. exchange rate

Answer Key

1. B
2. A
3. B
4. B
5. A
6. C
7. B
8. B
9. A
10. C
11. C
12. A
13. B
14. A
15. C

How to Practice Business English Banking Vocabulary

First, have a look at every new word or phrase. Even if you feel you may already know some of them, it’s important to make sure.

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! Use it in separate sentences first. Then try including it in a 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!

Normally, you should avoid translating, because this slows you down when you write and when you speak. But it may be useful to translate these kinds of very specific business words into your native language when you first learn them so that you make sure you got the meaning right.

Another important step to learning these terms (and others!) is by seeing and hearing them used in natural speech.

Listening resources featuring native speakers:

  • British Council: This site offers podcasts on several different business topics. You can find podcasts that use these words and read as you listen, following along with the transcripts
  • FluentU: This program uses authentic English videos made by native speakers with interactive captions on every video. You can create banking-themed flashcards and take quizzes based on the various videos as well.
  • YouTube: You can find a lot of videos discussing many of these finance terms and more words related to banking on YouTube, such as this video and many more. 

News websites and online magazines:

  • The Banker: This source has sections devoted to international markets, banking regulation and risk, transactions and technology and much more. There are also videos featuring editorial opinions, meetings and interviews with global banking figures. 
  • CNBC Banking News: CNBC News has a section featuring the latest banking and financial news. There are videos and shows covering investing, Wall Street, hedge funds, insurance, venture capital and much more. 
  • The Economist: This is a well-known magazine that features banking news and articles from around the world, with sections for different countries. There are also “business” and “finance and economics” sections on the website.
  • TheStreet: This is another site that features international banking news with news alerts that you can sign up for. Many of the articles are free to read, and there are two paid subscription bundles you can choose from. 

Resources for practice exercises:

 

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, or talking about economics in English. Which means you’ll be a much more successful businessperson!

Download: This blog post is available as a convenient and portable PDF that you can take anywhere. Click here to get a copy. (Download)

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