A CD that allows the depositor to increase the balance in his account without altering other terms of the account agreement, particularly the interest rate.
See also: Certificate of deposit
When Yvonne came into some unexpected money, she put it into heradd-on
CDso she could earn even more interest in the account.
A way to calculate interest or finance charges, based on the final account value at the end of a specified period after all transactions are accounted for. Normally used for bank savings accounts.
See also: Interest
Courtney used theadjusted balance methodat the end of every month to
track the interest earned on her bank statement.
A certificate issued by a U.S. bank that represents shares in a foreign corporation whose stock trades on a U.S. exchange. Certificates are valued in U.S. dollars. Makes it easier for Americans to invest in foreign companies, though it does not reduce the investment risks.
See also: Exchange, Stock
David was able to invest in some of the Japanese corporations that interested
him the most by purchasingADRs.
A method for calculating finance charges, based on the average account balance each day. Beneficial for consumers because payments made during the period lower the daily balance. Often used by store credit cards.
See also: Credit card, Previous balance method
Angie loved the fact that her favorite store used theaverage daily balance
methodon its card so she felt less guilty about charging her purchases.
Very large final installment due at the end of a loan period. Typically, balloon payments are associated with mortgage and car loans. The previous monthly payments are much smaller than they would be with a standard loan.
See also: 5-1 Hybrid ARM, Mortgage
Many borrowers have trouble making theirballoon paymentsin a depressed
real estate market.