|Federal Deposit Insurance Corporation (FDIC)
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Definition of Federal Deposit Insurance Corporation (FDIC)
Federal Deposit Insurance Corporation (FDIC)
A federal institution that insures bank deposits.
Certificates issued by a U.S. depositary bank, representing foreign
Legal document establishing a corporation and its structure and purpose.
Also called a time deposit, this is a certificate issued by a bank or thrift that
Refers to the fact that the merger of two firms decreases the probability of default on
A foreign corporation whose voting stock is more than 50% owned
A legal "person" that is separate and distinct from its owners. A corporation is allowed to own
Checking accounts that pay no interest and can be withdrawn upon demand.
Check made out directly by a local bank to a particular firm or person.
DTC is a user-owned securities depository which accepts deposits of
A U.S. corporation that receives a tax incentive for
Specialized banking institutions, authorized and chartered by the federal Reserve Board
The transfer of funds between bank accounts through the Automated
A short-term fixed rate time deposit denominated in a currency other than the local
federal deposit insurance corporation.
Securities issued by corporations and agencies created by the U.S. government,
Federal credit agencies
Agencies of the federal government set up to supply credit to various classes of
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
Non-interest bearing deposits held in reserve for depository institutions at their district federal
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal funds rate
This is the interest rate that banks with excess reserves at a federal Reserve district bank
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the federal
Federally related institutions
Arms of the federal government that are exempt from SEC registration and
Foreign Sales Corporation (FSC)
A special type of corporation created by the Tax Reform Act of 1984 that
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
Guaranteed insurance contract
A contract promising a stated nominal interest rate over some specific time
The law of averages. The average outcome for many independent trials of an experiment
International Depository Receipt (IDR)
A receipt issued by a bank as evidence of ownership of one or more
A book-entry depository for GNMA securities. The depository was initially operated by
Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock
A firm that operates in more than one country.
Negotiated certificate of deposit
A large-denomination CD, generally $1MM or more, that can be sold but
Pension Benefit Guaranty Corporation (PBGC)
A federal agency that insures the vested benefits of
A strategy using a leveraged portfolio in the underlying stock to create a synthetic put
A type of corporation permitted under the U.S. tax code whereby a branch operation
Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the
Accounts that pay interest, typically at below-market interest rates, that do not have a
Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited
Security deposit (maintenance)
Related: Maintenance margin security market line (SML). A description of
Term life insurance
A contract that provides a death benefit but no cash build-up or investment component.
Provides a death benefit only, no build-up of cash value.
Interest-bearing deposit at a savings institution that has a specific maturity.
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
Whole life insurance
A contract with both insurance and investment components: (1) It pays off a stated
A legal entity, organized under state laws, whose investors purchase
Business owned by stockholders who are not personally
Federal Reserve (the Fed)
The central bank in the United States, responsible for setting interest rates.
Certificate of Deposit (CD)
A bank deposit that cannot be withdrawn for a specified period of time. See also term deposit.
A bank deposit that can be withdrawn on demand, such as a deposit in a checking account.
The process whereby the banking system transforms a dollar of reserves into several dollars of money supply.
Central bank switching of government deposits between the central bank and commercial banks.
Federal Funds Rate
The interest rate at which banks lend deposits at the federal Reserve to one another overnight.
Federal Open Market Committee (FOMC)
Fed committee that makes decisions about open-market operations.
Federal Reserve Banks
The twelve district banks in the federal Reserve System.
Federal Reserve Board
Board of Governors of the federal Reserve System.
Federal Reserve System
The central banking authority responsible for monetary policy in the United States.
Multiple Deposit Creation
The process whereby the money multiplier operates.
See term deposit.
An interest-earning bank deposit that cannot be withdrawn without penalty until a specific time.
See term deposit.
A program in which workers and firms pay contributions and workers collect benefits if they become unemployed.
The direct transfer of payroll funds from the company bank account
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Federal Employer Identification Number
A unique identification number issued
Federal Insurance Contributions Act of 1935 (FICA)
A federal Act authorizing the government to collect Social Security and Medicare payroll taxes.
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
A federal Act expanding upon many of the insurance reforms created by
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
Canadian Deposit Insurance Corporation
Better known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds.
In medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced.
Dead Peasants Insurance
Also known as "Dead Janitors insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American corporations taking out corporate owned life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partially passed down to surviving families.
insurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period.
Errors and Omissions Insurance
insurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker.
Group Life Insurance
This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Level Premium Life Insurance
This is a type of insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years.
Commonly sold in the form of reducing term life insurance by lending institutions, this is life insurance with a death benefit reducing to zero over a specific period of time, usually 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of this kind of insurance is actually increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for this kind of coverage because it is usually sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that this is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. Most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage.
Split Dollar Life Insurance
The split dollar concept is usually associated with cash value life insurance where there is a death benefit and an accumulation of cash value. The basic premise is the sharing of the costs and benefits of a life insurance policy by two or more parties. Usually one party owns and pays for the insurance protection and the other owns and pays for the cash accumulation. There is no single way to structure a split dollar arrangement. The possible structures are limited only by the imagination of the parties involved.
Temporary Life Insurance
Temporary insurance coverage is available at time of application for a life insurance policy if certain conditions are met. Normally, temporary coverage relates to free coverage while the insurance company which is underwriting the risk, goes through the process of deciding whether or not they will grant a contract of coverage. The qualifications for temporary coverage vary from insurance company to insurance company but generally applicants will qualify if they are between the ages of 18 and 65, have no knowledge or suspicions of ill health, have not been absent from work for more than 7 days within the prior 6 months because of sickness or injury and total coverage applied for from all sources does not exceed $500,000. Normally a cheque covering a minimum of one months premium is required to complete the conditions for this kind of coverage. The insurance company applies this deposit towards the cost of a policy at its issue date, which may be several weeks in the future.
Term Life Insurance
A plan of insurance which covers the insured for only a certain period of time and not necessarily for his or her entire life. The policy pays a death benefit only if the insured dies during the term.
Yearly Renewable Term Insurance
Sometimes, simply called YRT, this is a form of term life insurance that may be renewed annually without evidence of insurability to a stated age.
Export Credit Insurance
The granting of insurance to cover the commercial and political risks of selling in foreign markets.
Process by which a company receives its Articles of Incorporation allowing it to operate as a corporation.
A firm licensed to sell insurance to the public.
A system where funds are electronically credited to your account by a financial institution or a payroll service. For example, you can arrange with your employer to have your pay cheques automatically deposited into your no fee bank account.
pre-authorized direct deposit
A system where funds are electronically credited to your account by a financial institution or a payroll service.
Accidental Dismemberment: (Credit Insurance)
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
Amortization (Credit Insurance)
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
Beneficiary (Credit Insurance)
The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor.
Borrower (Credit Insurance)
A consumer who borrows money from a lender.
Canadian Life and Health Insurance Association (CLHIA)
An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada.
Child Insurance Rider (CIR)
insurance or insurability provided on current or future children of insured.
Commercial Business Loan (Credit Insurance)
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
Cost of Insurance
The cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual.
Creditor (Credit Insurance)
A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.
Critical Illness Insurance
Coverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit.
Critical Illness Insurance (Credit Insurance)
Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing.
Debt (Credit Insurance)
Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured.
Disability Insurance (Credit Insurance)
Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
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