GLOSSARY Terms related to the Federal Reserve, banking and economics   A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |   day trade Also known as a "daylight trade." The purchase and sale or the short sale and cover of the same security in a margin account on the same day.   debit Charges to an account.   debit card A card that resembles a credit card but which debits a transaction account (checking account) with the transfers occurring contemporaneously with the customer's purchases. A debit card may be machine readable, allowing for the activation of an automated teller machine or other automated payments equipment.   debt Money owed; also known as liability.   debt service Periodic payment of the principal and interest on a loan.   default Failure to meet the terms of a credit agreement.   deficit The amount each year by which government spending is greater than government income.   delinquency The failure to make timely payments under a loan or other credit agreement.   demand deposit A deposit that may be withdrawn at any time without prior written notice to the depository institution. A checking account is the most common form of demand deposit.   deposit Any money in a savings or checking account or in a certificate of deposit (CD).   depository institution   depreciation A decrease in the value or price.   direct deposit A method of payment which electronically credits your checking or savings account.   dirty float A type of floating exchange rate that is not completely freely floating because central banks intervene from time to time to alter the rate from its free-market level. It is still a floating rate because it has not been pegged at a predetermined par value.   discount payment The difference between the face value and the price paid for a security.   discount rate The interest rate at which eligible depository institutions may borrow funds, usually for short periods, directly from a Federal Reserve Bank. The law requires the board of directors of each Reserve Bank to establish the discount rate every 14 days subject to the approval of the Board of Governors.   discount window Figurative expression for Federal Reserve facility for extending credit directly to eligible depository institutions (those with transaction accounts or nonpersonal time deposits).   diversification The distribution of investments among several companies to lessen the risk of loss.   dividend A share of profits paid to a stockholder.   durable merchandise Goods that have a relatively lengthy life (television sets, radios, etc.).