Media Contact: Barbara Fornasiero; EAFocus Communications; barbara@eafocus.com; 248.260.8466
Wyandotte, Mich. —April 1, 2026 – One of the goals of April’s Financial Literacy Month is education, providing information on personal finance tools, terms and strategies that help people of all ages confidently make smart decisions about their money. Michigan Legacy Credit Union (MLCU), serving members throughout Michigan via local branches and virtual banking platforms, offers a variety of community-focused education programs to the public. Carma Peters, MLCU President and CEO, said and one of the greatest barriers to financial literacy is the vast vocabulary of financial terms.
“Financial information can be so intimidating, especially when acronyms are tossed around as if everyone understands them,” Peters said. “That can lead to financial illiteracy because people are afraid to admit they don’t understand some of the basics of saving and borrowing money. There are several key words like credit, interest rate and varying kinds of savings accounts, that – when understood – can build up financial literacy at any age.”
9 words and phrases for increasing financial literacy
- Credit Score – The number that determines whether an individual is a good financial risk based on their patterns of borrowing, repayment and general use of credit. The three key agencies that determine a credit score are Equifax, Experian and TransUnion. A solid credit score range is 670 to 739. Especially important to know is that the interest rate a lender charges for a loan is typically higher for lower credit scores – a key reason to strive for having a good credit score. A FICO® score is a particular type of credit score and is the most commonly referred to credit score. Credit score is related to terms such as an individual being “credit worthy” (a good risk for a loan) and a “credit risk” (the individual may have difficulty repaying a loan.)
- Interest Rate –The amount of money, typically a percentage, you will pay when borrowing money, whether it be for a car loan, a home mortgage, to carry a balance on a credit card, or another purpose. Interest is the cost of borrowing money from a lender, which could be a credit union, bank, payday lender, or another lending organization or individual.
- Compounded Interest – The best kind of interest for growing your money! Compounded interest includes interest that is earned as the principal amount (the initial investment) grows. For example, if the interest rate is 5% on $100, the compounded interest rate would continue to build exponentially on $105, etc. So, the interest is not calculated on the initial amount, but on the amount as it grows.
- APY – The Annual Percentage Yield (APY) is the total amount of interest earned on a savings vehicle in one year and includes compounded interest. The higher the APY, the better the return for the investor. Note the opposite of this, and what you’ll see on a credit card is APR – Annual Percentage Rate. This is typically high on credit cards, and the rate indicates how much interest the borrower will pay to the lender when they are carrying a balance.
- High Yield Savings Account (HYSA) – Similar to a savings account, but with a significantly higher interest rate that can change daily. There are generally no limitations on how long the money must remain in the account. HYSA’s are FDIC insured and are good for creating an emergency account or money that may need to be accessed quickly.
- Money Market Account – A money market account typically offers a higher interest rate than a traditional savings account, but lower interest than a CD. While a minimum deposit is required (e.g. $500) there is no penalty for withdrawal. Money market accounts also allow access through a checking account or debit card tied to the account and may actually require that the card or checks be at least minimally used. Make sure you read the terms to earn the higher rate.
- Certificate of Deposit – Commonly known as a CD, a certificate of deposit offers a higher interest rate than a regular savings account in return for committing to keeping your money in the CD for a defined period of time, often starting at six months. Early withdrawal of the money results in a financial penalty that likely negates the value of having the CD in the first place. If you need money in the near-term, a CD is not a good option; rather, look to put your money in a traditional savings account. The interest rate is generally low, but the money can be accessed at any time without penalty.
- NCUA insured – The National Credit Union Association’s Share Insurance Fund insures individual accounts at federally insured credit unions up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund also separately protects IRA and KEOGH retirement accounts up to $250,000. The fund is administered by the NCUA and is backed by the full faith and credit of the United States.
- FDIC insured – The Federal Deposit Insurance Corporation ensures that the money placed in almost any type of traditional financial institution savings account will be insured up to $250,000 per depositor. Non-traditional investments such as stock market investing are not FDIC insured, meaning there is a very real risk that some or all of the money could be lost, with no recourse for getting the funds back.
“Understanding everyday financial language makes people smarter and better informed about their money. And while the term ‘financial discipline’ is not a commonly used term on the list, it should be a commonly used practice,” Peters added. “Achieving financial stability requires discipline, education and establishing good budgeting, spending, borrowing and saving practices. Financial Literacy Month is a good time to start!
About Michigan Legacy Credit Union
Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.
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