A

Accrued interest

This is interest that is accumulated on a loan and is repaid at a later stage, rather than at the start of the loan repayments. Generally, accrued interest is settled at the time when the principal amount has been repaid. This type of interest may be calculated at a certain rate on the value of the loan, or it may be compounded, which means that interest is charged also on interest.

Acquisition

The term 'acquisition' describes the process of taking ownership of, or title to, a particular property or asset.

Adjustable-rate mortgage

Also known as a variable-rate mortgage, this type of home loan has an interest rate that is adjusted in line with changes in the prime lending rate. 

Agreement of sale

An agreement of sale, also referred to as a deed of sale, is a written contract stipulating the terms and conditions of a property sale, as negotiated and agreed on by both the seller and the buyer. 

Amortisation

Amortisation refers to the process of repaying loans in regular instalments. During the initial years of the repayment process instalments primarily cover the cost of the interest owing on the loan. In later years loan repayments largely serve to cover the outstanding principal amount. 

B

Balloon mortgage

The instalments of a balloon mortgage have a fixed interest rate, and the loan is repaid over a set period. At the end of the loan term a lump-sum repayment is made to settle the principal amount due.

Basis point

Basis point refers to a one-hundredth of a percent. Generally, interest rate fluctuations are quoted in basis points. 

Beneficiary

A beneficiary is the person who receives the benefits of, for example, a trust or an estate as specified by a contract, for example a will. 

BDF

Beneficiary Data File

Bluetooth

Bluetooth is a technical industry standard that facilitates communication between wireless devices such as mobile phones, PDA’s (personal digital assistants) and handheld computers, and wireless enabled laptop or desktop computers and peripherals. A single Bluetooth-enabled wireless device is capable of making phone calls, synchronizing data with desktop computers, sending and receiving faxes, printing documents etc.

Bond

A bond is the right to assets provided as security for an interest-accruing loan made to a property owner in order to facilitate the purchase. Bonds are registered at the Deeds Office against the property's title deed. The property is therefore the collateral for the loan's repayment. 

Bond costs

Bond costs, which include conveyance fees, stamp duty and VAT or transfer duty, as the case may be, are paid by the prospective property owner to the transferring conveyancer when his or her bond is officially registered. 

Broker

A broker is an individual or company that fulfils an intermediary role between a buyer and a seller. 

Budget plan

Budget plans are additional credit facilities made available to credit cardholders. They enable cardholders to repay larger purchases over an agreed period of time, at a somewhat higher interest rate than normal. 

Building loan

This is a loan to construct a building.

C

Cap

A cap limits the amount by which the interest rate on an adjustable-rate mortgage can change in a year, or during the course of the loan's life. 

Capital gains tax

Capital gains tax is the tax that individuals, trusts, companies and corporations pay on the profit they make from selling capital assets or property. 

Cash distribution/Corporate action

In a long position the client would receive on his CFD the cash equivalent of the corporate action due on the reference instrument. In the case of a short position the cash equivalent is deducted from the client’s margin account that is due to Nedbank Capital as result of the corporate action due on the reference instrument.

Cession

Cession is the transfer of a personal right from one party (the cedent) to another (the cessionary). 

CFD

This is an abbreviation that stands for 'contracts for difference'. A CFD is a derivative instrument that allows geared exposure to movements in the price of an underlying reference instrument. The client gets the profit or loss of the movement in the underlying reference instrument. A CFD typically allows a client to gear himself up to 10 times the amount of cash that he has placed on margin account. This benefits the client by allowing him greater equity exposure than he would ordinarily be able to obtain.

Channel

A channel from a digital business point of view is a client touch-point/mechanism by which a client can conduct their relationship with the bank either remotely or self/service/face-to-face e.g. (via the internet, SST, ATM etc.) or staff-assisted e.g. (via the branch – teller, banking platform etc.).

Closing m-t-m

The closing m-t-m of the reference instrument price multiplied by the CFD positions.

Commodities

A commodity is any item of trade or commerce that can be processed and sold for commercial gain. 

Comprehensive vehicle insurance

This is a type of broad car insurance that will pay out the current market value of a vehicle in the case of theft, fire or an accident. It will also cover the repair costs of any other vehicles involved in an accident. 

Conditional sale

According to the terms of a conditional sale, a buyer moves onto a property and repays the mortgage in instalments, but the title of the property belongs to the seller until the loan has been settled in full. 

Credit report

Credit bureaus investigate individuals' credit histories, and compile the findings in a credit report. These credit reports are then used by lending institutions to determine the creditworthiness of people who apply for credit. A decision on whether or not to grant the loan is, inter alia, based on this report.