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GLOSSARY
Education Individual Retirement Arrangement
A savings plan created so that parents could make nondeductible contributions to an account for a child under age 18. This program is a trust or custodial account for the child, who is the designated beneficiary of the account but not technically a retirement account.
Education IRA
A savings plan which is set up to pay for a child's education. They allow for tax-favored savings to help pay a child's public or private schooling costs at any level.
Educational bond program
Allows the holder of series EE and series I bonds to exclude federal income tax when the bonds are used to pay for a qualified higher educational expenses.
EEM (Energy Efficient Mortgage)
An FHA program that helps homebuyers save money on utility bills by helping them to finance the cost of integrating energy efficiency features to a new or existing home as part of the home purchase. If a home owner has lower utility bills they can allocate a larger portion of their income to the cost of their home.
Effective age
The estimate given by the appraiser on the physical condition of a building. The exisitng age of the building may be shorter of longer than its effective age.
Effective annual interest rate
Effective annual interest rate is the percentage rate that represents one year's yield on an investment, including the effects of compounding. When interest is compounded more often than once a year, the effective annual interest rate will be higher than the stated rate.
Effective federal funds rate
The effective federal funds rate is a weighted average of interest rates charged by banks when they lend short-term funds to other banks. This rate is usually quoted daily.
EFT
Electronic funds transfer. The transfer of money between accounts made by the consumer using systems such as automated teller machines (ATMs), and electronic payments of bills.
EIN
EIN or employer identification number, is a number assigned to businesses and other entities for tax purposes. A business would obtain an EIN by making an application with the IRS.
Electronic cash
Electronic cash is money that changes hands electronically, usually by way of the Internet.
Electronic check
An electronic check, or Echeck, is an electronic draft ordering a bank to make a payment from one account to another. Echecks have the same function and purpose as paper checks.
Electronic check presentment
Electronic check presentment, or ECP, is a method of initiating the transfer of funds as ordered on a check. With ECP, the depositing bank sends the paying bank an electronic notification of the check details to begin processing. The actual paper check is then forwarded at a later date.
Electronic commerce
Electronic commerce, also known as e-commerce, is the exchange or sale of goods and services via the Internet.
Electronic filing
Electronic filing, or e-file, is an IRS program that allows U.S. taxpayers to submit their returns electronically. The benefits of e-filing are expedited processing and reduced paper usage.
Electronic funds transfer
Electronic funds transfer, or EFT, is the movement of money from one account to another that's initiated electronically, such as through an ATM.