Business / Taxes Glossary

Institutional Investor: Institutional investors buy and sell securities in large volume, typically 10,000 or more shares of stock, or bonds worth $200,000 or more, in a single transaction. In most cases, the invest . . . View Full Definition

Insufficient Funds: If you don’t have enough money available in your checking account to cover the checks you’ve written or electronic debits you’ve authorized, you have insufficient funds (ISF) or nonsufficien . . . View Full Definition

Insurance Trust: You set up an insurance trust to own a life insurance policy on your life. When you die, the face value of the policy is paid to the trust. That keeps the insurance payment out of your estat . . . View Full Definition

Insured Bond: An insured bond is a municipal bond whose interest and principal payments are guaranteed by a triple-A rated bond insurer. Insurance protects municipal bondholders against default by the iss . . . View Full Definition

Integrated Pension Plan: In an integrated pension plan, your employer counts part of your Social Security benefit in the defined benefit pension you’re entitled to and takes that amount out of your income. You still . . . View Full Definition

Interest: Interest is what you pay to borrow money using a loan, credit card, or line of credit. It is calculated at either a fixed or variable rate that’s expressed as a percentage of the amount you . . . View Full Definition

Interest Rate: Interest rate is the percentage of the face value of a bond or the balance in a deposit account that you receive as income on your investment. If you multiply the interest rate by the face v . . . View Full Definition

Interest-Only Mortgage: With an interest-only mortgage loan, you pay only the interest portion of each scheduled payment for a fixed term, often five to seven years. After that, your payments increase, often substa . . . View Full Definition

Interest-Rate Risk: Interest-rate risk describes the impact that a change in current interest rates is likely to have on the value of your investment portfolio. You face interest-rate risk when you own long-ter . . . View Full Definition

Intermediate-Term Bond: Intermediate-term bonds mature in two to ten years from the date of issue. Typically, the interest on these bonds is greater than that on short-term bonds of similar quality but less than th . . . View Full Definition

Internalization: Internalization occurs when a securities trade is executed within a brokerage firm rather than though an exchange. For example, if you give your broker an order to buy, the brokerage firm, a . . . View Full Definition

International Fund: This type of mutual fund invests in stocks, bonds, or cash equivalents that are traded in overseas markets, or in indexes that track international markets. Like other funds, international fu . . . View Full Definition

International Monetary Fund (IMF): The IMF was set up as a result of the United Nations Bretton Woods Agreement of 1944 to help stabilize world currencies, lower trade barriers, and help developing nations pay off debt. The I . . . View Full Definition

Intestate: A person who dies without a will is said to have died intestate. In this case, the probate court in the person’s home state — sometimes known as surrogate’s court or orphan’s court — determi . . . View Full Definition

Intrinsic Value: A company’s intrinsic value, or underlying value, is used to calculate its projected worth. You determine intrinsic value by subtracting long-term debt from anticipated future assets, includ . . . View Full Definition

Introducing Broker (IB): An introducing broker (IB) is a person or firm that takes orders to buy or sell futures contracts from clients and passes those orders to a futures commission merchant (FCM) for execution. P . . . View Full Definition

Investment Bank: An investment bank is a financial institution that helps companies take new bond or stock issues to market, usually acting as the intermediary between the issuer and investors. Investment ba . . . View Full Definition

Investment Club: If you're part of an investment club, you and the other members jointly choose the investments the club makes and decide on the amount each of you will contribute to the club's account. Amon . . . View Full Definition

Investment Company: An investment company is a firm that offers open-end funds, called mutual funds, closed-end funds, sometimes called investment trusts, or exchange traded funds to the public. By describing a . . . View Full Definition

Investment Grade: When a bond is rated investment grade, its issuer is considered able to meet its obligations, exposing bondholders to minimal default risk. Most US corporate and municipal bonds are rated by . . . View Full Definition

Investment Horizon: Your investment horizon is the point in time when you hope to achieve a particular investment goal. That horizon, sometimes called your time frame, may be fixed or flexible, depending on the . . . View Full Definition

Investment Income: Investment income — sometimes called unearned income — is the money that you collect from your investments. It may include stock dividends, mutual fund distributions, and interest from CDs, . . . View Full Definition

Investment Objective: An investment objective is a financial goal that helps determine the type of investments you make. For example, if you want a source of regular income, you might select a portfolio of high-r . . . View Full Definition

IRA Rollover: If you move assets from an existing individual retirement account (IRA) or an employer sponsored retirement plan to an IRA, you've completed an IRA rollover. You owe no income tax on the mon . . . View Full Definition

Irrevocable Trust: An irrevocable trust is a legal agreement whose terms cannot be changed by the creator or grantor who establishes the trust without the consent of the beneficiary or beneficiaries. The trust . . . View Full Definition

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