Definition

The art of entrusting your money to institutions that will charge you fees for the privilege of holding it, then lend it to other people at higher rates. This financial sector involves a complex ecosystem of overdraft charges, minimum balance requirements, and ATMs that somehow always cost $3.50 when you're desperate. For corporations, it's where money goes to make more money through mechanisms mere mortals cannot comprehend.

Example Usage

After switching to online banking, Tom discovered he'd been paying a $12 monthly fee just to receive paper statements he never read.

Source: Common financial terminology

Related Terms

Beginner

reimburse

The corporate promise to pay you back for money you fronted on the company's behalf—usually after submitting three forms, two receipts, and a blood oath. It's the business world's version of "I'll get you back," except with actual paper trails and approval workflows. Pro tip: save those receipts, or prepare for disappointment.

💰 Finance / Accounting
Intermediate

return on equity

How much profit a company generates per dollar of shareholder investment, or as executives call it, the only number that matters. Because shareholders' yachts don't buy themselves.

💰 Finance / Accounting
Beginner

tax-free

The mythical unicorn of financial transactions: money that the government has graciously decided not to touch. Income or purchases that escape taxation, usually because lawmakers needed to incentivize something or felt charitable that particular legislative session. The two most beautiful words in accounting, often followed by fine print and eligibility requirements.

💰 Finance / Accounting
Intermediate

days in inventory

The average number of days it takes to sell through inventory, calculated as (inventory / cost of goods sold) × 365. A metric that reveals whether you're efficiently managed or operating a museum of unsold products.

💰 Finance / Accounting
Beginner

generally accepted accounting principles

The rulebook for financial reporting in the US, commonly abbreviated as GAAP. It's the reason accountants can't just make up whatever numbers feel right, though creative interpretation remains an art form.

💰 Finance / Accounting
Beginner

double entry

The foundational accounting system where every transaction affects at least two accounts, ensuring the books always balance through equal and opposite entries. It's the yin and yang of accounting, except with more debits.

💰 Finance / Accounting

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