Account
A bank or post office service to enable customers to manage and invest their money. There are various types of account, such as current accounts, private accounts or savings accounts. An account may be opened for one person, joint account holders or businesses.
Account balance
The precise amount of money in an account.
Accounting
A system of recording monetary transactions, also referred to as bookkeeping.
Account-management fee
A charge which is regularly applied to the account to cover the bank's administrative procedures (generally every month).
Annual fee
A fee which users of Maestro and credit cards pay to card issuers.
Arrears
Failure to pay for something by the agreed date.
Assets
All the monetary and material assets belonging to a person or legal entity.
ATM
An automated customer terminal where money is dispensed or where bank transactions can be processed.
Also called a cash dispenser.
Attachment of earnings
A court order to clear a debt. The payments owed are deducted directly from a person's earnings.
Bank sort code
In the bank clearing system, every clearing centre is characterized by a number, e.g. 8 denotes Raiffeisen, 2 and 3 are used for UBS, 4 and 5 for CS, etc. This number is known as the sort code.
Bank statement
A document sent by the bank to the customer recording all the movements on an account (income and expenses), generally sent on a monthly basis.
Bankruptcy
Compulsory winding up of the total assets of a debtor due to insolvency. The debtor is (usually) an incorporated firm. The proceeds of the liquidation are distributed to the creditors.
Bond
Money which the state or a company raises among the general public. Interested parties make their money available in the form of a fixed-term loan. This money attracts interest from the borrower at a fixed or variable rate of interest.
Bookkeeping
See Accounting.
Borrower
A person or legal entity which borrows money from a lender.
Break-even
The point at which a business's earnings are precisely the same as its expenses (expressed in figures).
Budget
Financial plan or comparison of expenses and income for an individual, a family, a business or the state; generally, compiled for a period of one month or one year.
Capital
Capital comes from the Italian word "capitale" and means "principle sum". In an economic context it means money which is invested in a business enterprise and which should yield profit. This is money which is tied up for a long time.
Cash-flow
Key statistic used in financial analysis. The funds made by a business during a specific period (e.g. over a year). The cash flow is the sum total of the net profit, depreciations and reserves during the period in question.
Cheque
A written instruction to the bank to pay a certain amount to a specific person. A cheque must be dated and signed.
Clearing
In banking this is understood to mean "offsetting". It is intended to avoid superfluous payments between banks. In effect, only the balances of the amounts receivable and amounts payable are cleared.
Clearing number
In order to identify the individual branches of the banks in the bank clearing process, each branch is assigned a unique number. It may be a two or three-digit number. The first digit corresponds to the code number of the central clearing house; the other digit(s) denote(s) the individual branches.
Commission
Performance-related remuneration based on the amount of capital involved in a transaction. For example, stock market traders charge a certain percentage of the value of the trading transaction which they conduct as commission.
Compound interest
The interest on the interest. Not the interest on the original amount of the loan, but rather interest on the amounts of interests which have accrued.
Consumer
A person who buys products or services for his own use or for general use.
Credit card
A card which, upon presentation and by signing the receipt, allows people to pay for goods and services without cash. It is not linked to a particular bank account and, where necessary, can be used without there being an available credit balance, i.e. in the form of borrowing. The credit card can be used with businesses which are registered with the credit card organization (e.g. retailers, hotels, restaurants, transport operators).
Credit Card Annual Fees
Credit card providers charge varying annual fees. Annual fees vary according to the card provider, the type of card (gold or silver) and additional services provided.
Credit Card Companies
Credit card companies regulate the various parties which deal with credit cards (card holder, vendor, acquirer and issuer) and ensure data and money are processed correctly.
Credit costs
The total cost of a loan, comprising interest and commission.
Credit history
Records of a borrower's use of credit and payment performance.
Credit information agency
An organization which collects information about people's credit history and makes this available to lenders.
Credit limit
The maximum amount of a credit agreement. The borrower can spend up to this amount.
Credit Limits on Credit Cards
The credit limit is a limit on the amount of money you can take out on your card. The credit limit is set when you apply for your card, and depends on your financial situation, your credit history and your card issuer’s own conditions, among others.
Credit risk
An important decision-making variable for the creditor. The credit risk is derived from the previous credit history and a borrower's current situation and indicates how reliable the debtor is.
Credit worthiness
A person or legal entity's ability to repay debts reliably.
Creditor
A person or legal entity who or which receives a payment from a debtor.
Currency
Money (used by a country or group of countries). Depending on the international confidence which a currency enjoys, one talks in terms of a hard, strong or stable currency on the one hand, or of a soft or weak currency on the other hand.
Current account
Bank account, generally with a low rate of interest, used for processing payments.
Database
An electronic collection of information which users can access simply and quickly from various locations.
Debenture
See Bond.
Debit Cards
Unlike credit cards, debit card payments are debited immediately from the card holder's bank account. Examples of debit cards are Maestro and the PostFinance card.
Debit/cash card
A means of payment linked to the bank account for the purposes of paying for transactions without cash and for withdrawing cash at an ATM. The card does not have a credit function, i.e. it can only be used to debit payments from the available funds on the account.
Debt
Money which one person has to pay another person and which is still outstanding.
Debt counselling
Professional advice designed to support people with debt problems, provided on a paid or voluntary basis.
Debt-collection agency
A business which specializes in collecting outstanding debts: a creditor commissions the debt collection agency to collect unpaid amounts from the debtor.
Default
Regular arrears in the payment of monthly instalments or trading liabilities by a debtor.
Direct debit (DD)
A means of paying bills, rent, etc. The account holder gives his creditor and the bank authorization in writing to debit the amounts which he owes directly from his bank account.
Diversification
An investment strategy to reduce risk by combining different investments.
Dividend
Among other things, a share embodies rights to the assets of a public limited company. If the company makes a net profit, the shareholder is entitled to some of this, in proportion to the par value of the share. This share is called the dividend.
Down-payment
First part payment made to a company or to a finance company when purchasing a product or a service.
Identity theft
Criminal activity in which someone acquires someone else's personal access data in order to access their assets or money.
Income
An amount of money which a person earns over a particular period of time.
Income tax
Tax on personal income.
Inheritance tax
Tax on the assets inherited upon someone's death.
Insolvency
Inability to meet payments.
Insurance
Injury, damage or loss. Against payment of a premium (generally monthly or annually), the insurance company is required to pay a large proportion off the costs arising in the event of injury, damage or loss.
Interest
Payment due periodically in return for the use of money. Anyone who borrows money pays the person who makes the money available. This is generally specified as a percentage of the amount of money which has been provided.
Interest rate
The interest attracted by the capital expressed in percentage terms (also called the rate of interest).
Interest on Credit Cards
If you pay your credit card balance back in several installments you will be charged interest. In Switzerland the annual interest rate can fluctuate between 9.5% and 15.0%.
Interest-free period
A period of time during which a borrower charges no interest.
Internet banking
Processing banking transactions over the Internet. Using special software, people can manage their bank accounts from home using personal access data.
Investment
Investment comes from the Latin "investire" and means to "fit out". "Fitting out" money means using it to buy machinery, factory halls, plant, etc. Consequently, monetary capital is accrued in the long term, yielding interest.
Investment fund
See Unit trust.
Last will and testament
A legal document which specifies how a person's assets are to be distributed after his death.
Liability
See Debt.
Life insurance (LI)
Insurance which provides payment to family members in the event of a person's death. Mixed life insurance also exists. In the event of death, the sum insured is paid immediately and, if the insured party does not die, it is paid out following the end of the insurance term. This type of life insurance policy has a continuously increasing surrender value. Some of the premiums are saved, forming a steadily growing capital fund.
Loan
1. Lending money. In this form of credit, the amount is paid out all at once. The borrower repays the loan in instalments. The borrower's debt decreases with every instalment. This is generally medium to long-term borrowing.
2. A sum of money which is provided by a person, a business or a bank for a specific period of time. The recipient must pay interest in return for the provision of this money. He generally also has to provide the bank with a form of security as a guarantee for the sum of money which has been lent to him (collateral).
Loansharking
Lending which is unscrupulous, unlawful or not in the interests of the borrowers.
Lodgement
Depositing money in an account.
Lodgement slip
A form for making payments facilitating the simple allocation of a payment to the correct beneficiary or account.
Refinance
A loan is paid back but then replaced with a new loan.
Retail
Direct sale to the end consumer.
Retirement
Statutory time at which the requirement for people to work who are capable of doing so officially ends (men currently retire at 65, women at 64).
Return
The yield on a capital investment expressed as a percentage of the capital invested, generally calculated over a year.
Revolving credit
Credit which is paid back during the agreed term and which can be availed of again.
Reward Schemes
Most credit card issuers “reward” their customers through a points system. The more the card is used, the more points the card holder collects. These points can then be exchanged for vouchers, airmiles etc.
Right of lien
A creditor's statutory right to seize assets belonging to the debtor as security for a sum of money owed. The amount owed can be covered by way of a compulsory sale of these assets if the debtor fails to pay him back.
Secured loan
Credit in which the lender asks for the sum lent to be secured (e.g. with stocks). The security must have at least the same value as the amount lent, thereby covering the credit. If the borrower is unable to repay the credit, the creditor may make use of the security.
Security
An asset belonging to a borrower which the lender is legally entitled to take possession of if the borrower defaults on payment.
Solvency
The borrower's ability to meet his financial commitments.
Student loan
A loan made to students by the state or by private institutions. A particular feature of this loan is that it is generally interest-free.
Summary notice to pay (ZB)
A written demand by the debt-collection agency to pay a requested sum within 20 days or to contest the demand within 10 days by submitting a legal proposal. The summary notice to pay is entered in the debt-collection register and generally remains disclosed there for 5 years.
