Opening a bank account, requesting a loan or simply making a transfer can be complex procedures to do for the first time, since the lack of financial education causes many people to be unaware of basic concepts. Not understanding banking jargon when carrying out any type of operation can prevent us from managing our finances correctly and give rise to confusion, for this reason, from the En Naranja blog they explain a series of banking concepts to familiarize ourselves with them and carry out the procedures with more security and confidence.
BIC e IBAN
Both concepts are essential when sending and receiving national and international bank transfers, since the money is kept safe through this encrypted security. The code IBAN identifies each current account in a payment area in euros, so that payments and transfers can be made through this number in any country in the SEPA area (Single Area of Payments in Euros). On the other hand, the BIC or Swift code is the one that identifies the beneficiary bank of a transfer, that is, the recipient. Both are essential to make payments or transfers in the rest of the world, outside the SEPA scope.
Debit and credit card
Despite the fact that at first glance both plastic currencies may seem the same, the money for the payments comes from different sources. Through debit cards you can carry out operations charged to your current account or savings book, so you use the money you actually have. “The limit of money that we can withdraw with these cards is set by the balance that we have at the time of withdrawal“, they say from En Naranja.
Credit cards are those issued by the bank in the name of a person so that they can buy and make payments on credit, that is, with money that is not really theirs, but rather comes from loans that the financial institution makes. Therefore, These cards allow you to make payments even if you do not have funds and the amount will be charged later.
Interest-bearing account and fixed-term deposit
Fixed-term deposits “require” to immobilize an amount of money for a period of time that has been fixed in advance. Therefore, if you want to recover the capital before this deposit expires, the client must pay a penalty, which will reduce the interest received so far.
For their part, remunerated accounts give interest from the first euro and without a term, that is, if the interested party wants to recover the money, they can do so “practically immediately”, as explained from this blog. Therefore, fixed-term deposits usually offer a higher return than this product.
Transfer and conveyance
Although both terms are often used as synonyms, they are not. A transfer is a movement between accounts of the same bank and with the same ownerwhile the transfer consists of sending money between accounts of different entities and the owner may be different or the same.
Debit and credit
The balance in an account can decrease or increase depending on whether debits and credits are made. The first concept refers to cash withdrawal operations from a current accountwhile credits are income.