Banking terms in plain words

A one-off charge for closing an account. Where a bank charges it only within a set period after opening, the account's terms give that period.

An account with a cooling-off period can be closed during that period without the charge. See Cooling-off period.

The return on an account quoted for a full year, so that accounts can be compared on the same footing. Money held for part of a year earns the matching part: half a year earns half of the annual figure.

The average of your balance at the end of each day in a calendar month. The bank adds up the daily closing balances and divides by the number of days in the month.

A few low days do not pull the average under a required amount on their own, as long as the rest of the month makes up for them. See also Lowest monthly balance, which works differently.

Ranges of balance that each carry their own rate. An account with bands pays a different rate depending on how much you hold.

There are two ways a bank applies them. In the first, the band your balance reaches sets the rate for the whole balance. In the second, each rate applies only to the part of the balance inside its band, so a larger balance earns several rates at once. The account page says which one applies.

The standard rate an account pays when no extra condition is met. A bonus rate is added on top of it. A conditional or promotional rate takes its place while that rate applies.

A rate paid on top of the account's base rate when you meet a condition, such as making no withdrawals in the month. The base rate and the bonus are added together for the period in which you qualify.

A rate that applies only while you meet the condition attached to it. In a period when the condition is not met, that rate is not paid and the account's base rate applies.

A short period right after you open an account during which you can close it without a closure charge. The account's terms give its length, counted in days or in working days from the opening date.

The average of your balance at the end of each day across a period. The period is a month or a quarter, and the account page says which.

Every day counts equally, so money that was in the account for half the period counts for half.

A profit rate that the bank announces after a period ends, once it knows what the investment earned. The rate on the account page is the one announced for the period named beside it.

The next period has its own rate, announced when that period closes. See Profit declaration.

The amount in your account when the bank closes its books for the day. A return worked out on the end-of-day balance counts each day separately, so money earns from the day it arrives until the day it leaves.

The profit rate a bank states when you place an Islamic deposit, based on what it expects the investment to earn. It is the figure the deposit is offered at.

See also Declared profit rate, which is announced after a period ends.

A monthly charge for holding less than the account's minimum balance. It is charged only in a month when you are under the amount, and it stops as soon as you are back at or above it.

An account page lists any other way to avoid it, such as transferring your salary or spending a set amount on the debit card.

A condition that cancels a fee for the month in which you meet it. The fee still exists, and it is charged in any month when the condition is not met.

A sum you place with a bank for a set length of time, which you choose when you open it. The length of time is the tenure, and the day it ends is the maturity.

The money is meant to stay in place until maturity. The account page gives the smallest sum the deposit accepts, shown as the minimum deposit.

The money you pay in to open an account, shown on account pages as the minimum opening amount. It is a one-time requirement and is separate from the minimum balance, which is what you keep in the account afterwards.

The smallest amount your account held at any point in a calendar month. An account measured this way looks at that one figure, so a single day under a required amount counts for the whole month.

Where a return is worked out on the lowest monthly balance, one withdrawal lowers the return for that month.

The day a deposit's tenure ends. On that day the deposit comes back to you, together with any return that is paid at maturity.

The amount a bank asks you to keep in an account. Some accounts have none. Where there is one, the account's fall-below fee applies in a month when you hold less.

The account's terms say how the balance is measured: as an average monthly balance, as the lowest monthly balance, or day by day. The first two have their own entries.

The lowest monthly salary a bank accepts for an account. You can open the account only if your salary is at or above it. An account with no minimum salary is open to any income.

A charge for holding an account, taken once a month. Some accounts have none. Where there is one, the account page lists any condition that cancels it. See Fee waiver.

An Islamic contract in which you provide the money and the bank manages it. The bank invests the money, and what it earns is shared between you and the bank in a ratio agreed when you open the account.

See Mudaraba pool and Profit-sharing ratio.

The shared fund into which a bank places the deposits of its Mudaraba customers. The bank invests the pool as a whole, and the profit the pool makes is what gets shared.

Your part of the depositors' share depends on how much you held and for how long.

Money you add on top of what you already held with the bank on a set date. A rate offered on new funds is paid on the added amount only, and your existing balance keeps the base rate.

New-to-bank funds are money brought in from outside the bank. Money moved from another account you hold with the same bank does not count.

How often the return on an account is paid to you. The alternatives are monthly, quarterly, half-yearly, once upfront and once at maturity.

The account page says which applies. Where a deposit offers more than one, you choose when you open it.

The announcement a bank makes after a period ends, stating the profit rate its Islamic accounts earned for that period. Profit that is paid after the declaration reaches your account once the announcement is made.

For a deposit, the declaration that counts is the one that follows the end of its tenure.

The share of the bank's earnings that an Islamic account pays you, expressed as a yearly percentage of your balance so it can be compared with other accounts.

An Islamic account does not pay interest. See Sharia-compliant account.

The split of profit between the depositors and the bank under a Mudaraba contract. It is agreed when you open the account and applies to whatever the investment earns.

A rate that applies for a limited offer period with a start date and an end date. When the offer period ends, the account's base rate applies.

An upper limit on monthly salary for accounts reserved for lower incomes. You can open the account only if your salary is within the limit.

An arrangement in which your employer pays your salary straight into the account. Some accounts require it, and others use it as one of the ways to avoid a fee or reach a higher rate.

The date you set for what you are saving towards when you open a goal account. On an account that pays its return on the goal date, the whole return arrives on that day.

An account run under the rules of Islamic finance. It does not pay interest. The bank puts your money to work under an Islamic contract, such as Mudaraba or Wakala, and shares the profit with you.

The length of time you agree to leave a deposit in place, chosen when you open it. The rate depends on the tenure, and the deposit is meant to stay untouched until the tenure ends. See Maturity.

A monthly fee with more than one level, set by your relationship with the bank, for example by how much you hold or whether your salary is paid in. Each level has its own fee. You pay the one level you fall into, never several added together.

A return for the whole tenure that is paid on the day you place the deposit. The deposit itself comes back at maturity.

An account a bank opens for someone in the UAE on a visit visa, before they hold an Emirates ID. It runs for a limited time, and the bank closes it when that time ends, when the visa ends, or when the holder becomes a resident.

An Islamic contract in which you appoint the bank as your agent to invest your money. The bank tells you the profit it expects the investment to make when you place the deposit, and pays you the profit the investment makes.

See Expected profit rate.

An average that takes account of how long each amount stayed in the account. Money held for the whole quarter counts in full. Money that arrived in the last week counts for that week only.