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ABM (Automated Banking Machine)
An ABM, or Automated Banking Machine, is another term for an ATM (Automated Teller Machine). It’s a computerized telecommunications device that provides customers of a financial institution with access to financial transactions in a public space without the need for a human teller.
ABMs allow you to withdraw cash from your bank account, deposit funds, transfer money between accounts, check your account balance, and even pay bills.
They are conveniently located in banks, shopping malls, grocery stores, and other public places, offering 24/7 access to banking services. You’ll need a debit card and your PIN (Personal Identification Number) to use an ABM.
Some ABMs charge a fee, especially if you are not a customer of that particular bank.
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Accrued Interest
Accrued interest is the interest that has been earned on an investment or loan but has not yet been paid out to the investor or lender.
It represents the accumulated interest from the date of the last payment or the start of the investment period up to a specific point in time.
You’ll often see accrued interest in savings accounts, bonds, and other fixed-income investments. For example, if you purchase a bond mid-way through its interest payment period, you’ll likely have to pay the seller the accrued interest that has accumulated since the last payment.
Similarly, when you close a savings account, the bank will pay you any accrued interest earned up to the date of closure. Understanding accrued interest is important for accurately tracking your investment returns and tax obligations.
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All-inclusive
When the rent includes all utilities and sometimes even internet.
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Amortization
Amortization is the process of gradually paying off a debt, such as a mortgage or a loan, over a set period of time through regular payments.
Each payment includes a portion of the principal (the original amount borrowed) and a portion of the interest (the cost of borrowing the money).
When you take out a mortgage, the lender will provide you with an amortization schedule, which shows how much of each payment goes towards the principal and how much goes towards the interest over the life of the loan.
In the early years of the loan, a larger portion of each payment goes towards interest, and as time goes on, a larger portion goes towards the principal.
The amortization period is the total length of time it takes to pay off the loan.
Shorter amortization periods result in higher monthly payments but lower overall interest costs, while longer amortization periods result in lower monthly payments but higher overall interest costs.
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Appraisal
An appraisal is a professional and unbiased estimate of the fair market value of a property, typically performed by a licensed and qualified appraiser.
It’s a critical step in the home buying or refinancing process.
Lenders require an appraisal to ensure that the property is worth at least as much as the mortgage they are providing.
Appraisals involve a physical inspection of the property, a review of comparable sales in the area, and an analysis of the property’s features, condition, and location.
If the appraisal comes in lower than the purchase price, it can impact your ability to get financing or may require you to renegotiate the price with the seller.
Appraisals are also used for estate planning, tax purposes, and other situations where an accurate valuation of a property is needed.
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Bachelor Apartment
A small apartment with one main room that serves as both living room and bedroom, plus a separate bathroom. Also called a studio apartment.
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Balance Transfer
A balance transfer is the process of moving the outstanding balance from one credit card to another, typically to take advantage of a lower interest rate, special promotional offers, or consolidate debt.
Credit card companies often offer balance transfer promotions to attract new customers. These promotions may include a 0% introductory interest rate for a certain period, which can save you money on interest charges if you have a high-interest credit card balance.
However, it’s important to compare the terms and conditions of different balance transfer offers, including any balance transfer fees, the duration of the promotional period, and the interest rate that will apply after the promotional period ends.
Also, avoid closing the old card unless you’re certain you won’t need it.
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Related Terms: Credit Card, Interest Rate, Debt, APR, Balance Transfer Fee
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Bank Draft
A bank draft is a guaranteed payment instrument issued by a bank, essentially a check that is drawn on the bank’s own funds rather than an individual’s account.
It provides a higher level of security than a personal check.
Bank drafts are commonly used for large transactions, such as purchasing a car, making a down payment on a house, or sending money internationally.
They are considered a safer form of payment because the funds are guaranteed by the bank, reducing the risk of the payment being declined. To obtain a bank draft, you typically need to provide the bank with the recipient’s name and address, as well as the amount of the payment.
The bank will then issue the bank draft, which you can deliver to the recipient.
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Related Terms: Certified Check, Money Order, Payment, Bank, Guaranteed Funds
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Bridging Program
A program designed to help internationally trained professionals meet Canadian standards in their field. These programs can include education, training, and work placements.
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Bursary
A type of grant, often given based on financial need rather than academic merit.
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Car Insurance
Car insurance is a contract between you and an insurance company that protects you financially in the event of an accident or other damage to your vehicle.
Car insurance is mandatory in Canada. It covers costs associated with property damage, bodily injury, and liability.
The cost of car insurance can vary depending on your driving record, the type of vehicle you drive, and the level of coverage you choose.
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Related Terms: Auto Insurance, Liability Insurance, Collision Insurance, Comprehensive Insurance
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CERB (Canada Emergency Response Benefit)
The Canada Emergency Response Benefit (CERB) was a temporary federal government program that provided financial support to Canadians who lost their income due to the COVID-19 pandemic.
CERB was available to workers, self-employed individuals, and others who met specific eligibility criteria. While the CERB program is no longer active, it was a significant source of financial assistance for many Canadians during the pandemic. Understanding CERB helps understand Canada’s response to COVID-19.
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Chequing Account
A chequing account (also often called a “checking” account) is a type of bank account designed for everyday transactions, such as paying bills, making purchases, and depositing paychecks.
Chequing accounts typically offer features such as debit cards, online banking, mobile banking, and check-writing capabilities. They may also earn a small amount of interest, although interest rates are generally lower than those offered on savings accounts.
Many chequing accounts come with monthly fees, but these fees can often be waived by maintaining a minimum balance or meeting other requirements. They are useful for your day to day life.
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Related Terms: Savings Account, Bank Account, Debit Card, Overdraft, Bank Fees
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Co-op Program
A co-op program, or cooperative education program, is a structured program that combines academic studies with paid work experience in a related field.
Co-op programs allow students to gain valuable work experience, develop professional skills, and earn money while pursuing their degree or diploma.
These programs often extend the length of the study, but greatly improve future job prospects.
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Related Terms: Internship, Work Experience, Career, Practical Training
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Compound Interest
Compound interest is interest that is earned not only on the original principal amount but also on the accumulated interest from previous periods.
It’s often described as “interest on interest” and is a powerful tool for growing your savings over time.
The more frequently interest is compounded (e.g., daily, monthly, quarterly, annually), the faster your money will grow. For example, if you invest $1,000 at a 5% annual interest rate compounded annually, you’ll earn $50 in interest in the first year.
In the second year, you’ll earn interest on the original $1,000 plus the $50 in interest from the first year, resulting in a slightly higher interest payment.
Over time, the effect of compound interest becomes more significant, allowing your investments to grow exponentially.
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Condo
Short for condominium. It’s an apartment that you can own, in a building with shared common areas.
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Condo Fees
Condo fees, also known as condominium fees or maintenance fees, are monthly fees paid by condominium owners to cover the costs of maintaining the common areas and amenities of the condominium complex.
Condo fees typically cover expenses such as building insurance, landscaping, snow removal, maintenance of elevators and hallways, and access to amenities like gyms, pools, and party rooms.
The amount of condo fees can vary depending on the size and age of the building, the amenities offered, and the location.
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Related Terms: Condominium, Maintenance Fees, Strata Fees, Homeowners Association
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Credit History
A record of a person’s ability to repay debts and demonstrated responsibility in repaying debts. A good credit history is important for many aspects of financial life in Canada.
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Credit Limit
A credit limit is the maximum amount of money that a credit card issuer allows you to borrow on a credit card. It represents the total amount of credit that is available to you.
Your credit limit is determined based on your credit history, income, and other factors. It’s important to stay below your credit limit to avoid over-limit fees and to maintain a good credit score.
Using a high percentage of your credit limit can negatively impact your credit score, so it’s generally recommended to keep your credit utilization ratio (the amount of credit you’re using compared to your total credit limit) below 30%.
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Related Terms: Credit Card, Available Credit, Credit Utilization Ratio, Credit Score, Debt
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Credit Score
A credit score is a numerical representation of your creditworthiness based on your credit history. It’s used by lenders to assess the risk of lending you money.
In Canada, the two main credit bureaus are Equifax and TransUnion. Your credit score is typically a number between 300 and 900. A higher credit score indicates a lower risk of default.
Having a good credit score is important for obtaining loans, mortgages, credit cards, and even renting an apartment.
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Related Terms: Credit Report, Credit Bureau, Equifax, TransUnion, Credit History
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Credit Union
A credit union is a member-owned financial cooperative that provides banking services to its members. Unlike traditional banks, credit unions are not-for-profit organizations, and their members are also their owners.
Credit unions typically offer services similar to those of banks, such as chequing and savings accounts, loans, mortgages, and investment products.
They often have lower fees and better interest rates than banks, and they are known for providing personalized service and supporting their local communities.
To become a member of a credit union, you typically need to meet certain eligibility requirements, such as living or working in a specific geographic area or belonging to a particular organization.
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Eh
“Eh” is a common Canadian expression that is often used at the end of a sentence to ask for confirmation, to express surprise, or simply to add a friendly tone.
It’s similar to saying “right?” or “isn’t it?” in English. It can also be used to soften a statement or to show politeness. For example: “It’s a nice day, eh?”
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Related Terms: Canadian Slang, Colloquialism, Expression
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EI (Employment Insurance)
Employment Insurance (EI) is a federal government program that provides temporary financial assistance to eligible workers who have lost their job through no fault of their own.
To be eligible for EI, you must have worked a certain number of hours in the past year and meet other requirements. EI benefits can help you cover living expenses while you look for a new job.
There are different types of EI benefits, including regular benefits, sickness benefits, maternity/parental benefits, and caregiving benefits.
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Family Doctor
A family doctor, also known as a general practitioner (GP) or primary care physician, is a doctor who provides comprehensive medical care to individuals and families of all ages.
Having a family doctor is important for managing your overall health and receiving preventive care. Your family doctor can provide routine check-ups, diagnose and treat illnesses, and refer you to specialists if needed.
Finding a family doctor accepting new patients can be challenging in some areas of Canada.
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Related Terms: General Practitioner (GP), Primary Care Physician, Medical Care, Specialist
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First and Last Month Rent
Some landlords ask for the first and last month’s rent when you move in.
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First Nations/Inuit/Métis
First Nations, Inuit, and Métis are the three distinct groups of Indigenous peoples in Canada, each with their own unique cultures, languages, and histories.
It’s important to recognize and respect the diversity and contributions of Indigenous peoples in Canada.
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First Nations: Refers to the original inhabitants of Canada, excluding Inuit and Métis.
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Inuit: Refers to the Indigenous peoples of the Arctic regions of Canada.
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Métis: Refers to people of mixed European and Indigenous ancestry.
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Related Terms: Indigenous Peoples, Aboriginal Peoples, Native Canadians, Reconciliation
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Foreign Transaction Fee
A foreign transaction fee is a fee charged by a bank or credit card company when you use your card to make purchases in a foreign currency or when you travel outside of Canada.
Foreign transaction fees are typically a percentage of the transaction amount, often around 2.5% to 3%. To avoid foreign transaction fees, consider using a credit card that doesn’t charge them or using cash when traveling internationally.
Some Canadian credit cards are specifically designed for international travel and offer no foreign transaction fees. Always check the fine print before using a card in a foreign country.
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Related Terms: Credit Card, Currency, Fee, Transaction, International Travel
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Furnished
An apartment that comes with basic furniture like a bed, couch, and table.
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G License
The G license is the full, unrestricted driver’s license in Ontario, Canada.
To obtain a G license, you must first go through the graduated licensing system, which involves completing vision and knowledge tests, and passing G2 and G road tests.
A G license allows you to drive any car, van or small truck, and tow a trailer if it follows certain weight restrictions.
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Related Terms: Driver’s License, Graduated Licensing, Driving Test, Road Test
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GIC (Guaranteed Investment Certificate)
A Guaranteed Investment Certificate (GIC) is a type of investment that guarantees a fixed rate of return over a specific period of time, known as the term. It’s a low-risk investment option.
GICs are offered by banks, credit unions, and other financial institutions. They typically have terms ranging from a few months to several years. The longer the term, the higher the interest rate is likely to be.
GICs are considered a safe investment because your principal is guaranteed, and the interest rate is fixed for the entire term. However, GICs may not offer the same potential for high returns as riskier investments, such as stocks or mutual funds.
Early withdrawal before the maturity date usually incurs a penalty.
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Related Terms: Investment, Fixed Income, Savings, Interest Rate, Term Deposit
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