APR, inflation, IPO – these terms don’t ring a bell or maybe even give you a headache? Take a few minutes to find out what they mean!
What is APR?
APR is the Annual Percentage Rate – an extremely important rate when making a decision to take out a loan. To put it bluntly, APR determines the total cost of your loan. Every financial institution which offers loans is obliged to inform its clients of the APR. This way you can compare APR at different banks and choose the most beneficial offer. APR includes, among others:
Thus, a bank takes into account how long you will dispose of the borrowed money.
What is inflation?
Inflation is the upward trend of the general level of prices of goods and services. In order to be called inflation, the growth has to be relatively steady and persist over a given period. Single, unrepeated price spikes resulting from a sudden event are not considered inflation. An inherent element of this phenomenon is a decrease in the purchasing power. What are the main reasons behind inflation?
IPO – what is it?
IPO is a term closely associated with the stock exchange and is an abbreviation of the “Initial Public Offering”, meaning the so-called stock exchange début. This means that the first offering of a joint-stock company marks its official entry on the stock exchange. Before being authorized to sell its stock on the stock exchange, a company has to undergo a trade authorization process, conducted by the Polish Financial Supervision Authority (KNF).
What should you know about the Bank Guarantee Fund (BFG)?
Have you ever wondered what will happen with your money if the bank which maintains your account goes bankrupt? BFG covers your funds up to EUR 100,000 with a guarantee and, in case a bank goes bankrupt, you will be refunded the bank deposit. If you have a joint account with your partner, the limit of EUR 100,000 applies to each of you individually.
All commercial and cooperative banks with a Polish banking license participate in the Bank Guarantee Fund – unlike parabanks, which is why you should be especially careful with such institutions. The main tasks of the BFG include:
It could be explained as “remuneration” for using money of others, e.g. of a bank. Interest is related to a loan, and its amount depends on the interest rate, loan amount and the repayment period.
We hope that the presented banking terms will no longer be vague for you and you will find the world of finance at least a little bit more friendly!