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The actual return you earn on a savings account or investment in one year, including the effect of compounding interest. A higher APY means your money grows faster. Always compare APYs — not just interest rates — when shopping for savings accounts.

The yearly cost of borrowing money, expressed as a percentage. APR includes the interest rate plus fees, making it the best way to compare loan and credit card offers. Lower APR = less you pay in total. Unlike APY, APR does not account for compounding.

Interest earned on both your original deposit AND the interest you've already earned. For savers, this is your best friend — your money snowballs over time. For borrowers, it works against you. The more frequently interest compounds (daily vs monthly), the bigger the effect.

A 3-digit number (300–850) that represents your creditworthiness. Lenders use it to decide whether to approve your loan and at what interest rate. The most common model is FICO. Key factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).

A bank feature that covers transactions when your account balance drops below zero, preventing declined payments. Banks may charge an overdraft fee (often $25–$35 per transaction). Some banks now offer free overdraft protection by linking a savings account or line of credit.

Federal Deposit Insurance Corporation protection covers your bank deposits up to $250,000 per depositor, per bank, per account category. If your FDIC-insured bank fails, your money is protected. Always verify a bank is FDIC-insured before depositing large sums.

A routing number (9 digits) identifies your bank — think of it as a bank's address. An account number identifies your specific account at that bank. You need both for wire transfers, direct deposit setup, and electronic payments. Never share these details with untrusted parties.

A savings product where you deposit money for a fixed term (3 months to 5 years) at a locked-in interest rate. CDs typically offer higher APYs than regular savings accounts. The trade-off: early withdrawal penalties if you access your money before the term ends.