Glossary

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I

IBAN INTERNATIONAL BANK ACCOUNT NUMBER

An alphanumeric code that identifies one's current account. It serves as an address for the account and is indispensable in transferring funds between accounts. Even if the beneficiary's name is incorrect or incomplete, with a correct IBAN a credit transfer can still be carried out successfully.

ICC Comprehensive Cost Indicator

The ICC is a European indicator introduced by the Bank of Italy to make communication with consumers more transparent. It offers an estimation of the costs of maintaining a current account, tailored to different user profiles (young people; households that make a low, average or large number of transactions; retired persons with light or average account usage).

It is useful for quickly comparing the costs of the various current accounts offered by banks. The ICC may be very different from the actual cost incurred at year-end, based on how the customer really uses the account. It is set out in the Information Sheet that banks are required to provide to customers before they open a current account.

INCOME

In financial terms, this is any transaction that directly or indirectly increases an amount of money. Income can be ordinary (e.g. wages) or extraordinary (for instance, lottery winnings or a gift), depending on whether they are likely to recur over time. The purpose of financial planning is to balance a household's income and its expenses. Sound financial planning starts with an analysis of the household’s finances and involves setting spending and saving goals. To do this, it is necessary to calculate how much money normally goes into and out of the household's 'coffers', bearing in mind the characteristics of the different sources of income and of the different types expenses, however predictable. To help you achieve your financial planning goals, it is useful to keep a record of income and expenses, in other words a budget.

INDICATOR OF HOUSEHOLD COMPOSITION AND FINANCIAL SITUATION (ISEE)

An index that represents a household's financial situation, calculated based on its income and other components of wealth. INPS (National Social Security Institute) issues a certificate stating a household's ISEE, which enables it to access social benefits and public services on special terms.

INFLATION

Inflation means an increase in general price levels for goods and services. There's inflation when prices go up across the board, not just for a few items. This means that we can buy less today than we could in the past for the same euro. In other words, inflation reduces the value of money over time. The inflation rate is the percentage change in the prices of goods and services over a given period of time.

INFORMATION SHEET

A document that financial intermediaries provide to customers for each product or service offered. It contains information on the intermediary, and the terms, conditions and main features of the product or service. The provisions of the contract must be consistent with the Information sheet.

INITIAL PUBLIC OFFERING

A specific type of open offer either for sale or subscription, aimed at having the securities listed on a regulated market.

INSTALMENT

A payment that the borrower periodically makes to the bank or financial company to repay the sum borrowed. It is generally composed of principal, namely repayment of the amount borrowed, and interest, consisting of interest accrued on the loan. The frequency of payment is stated in the contract and is usually monthly.

INSURANCE POLICY

To protect themselves from the risk of non-payment, lenders can require that a borrower take out an insurance policy. The law requires that loans against one fifth of salary or pension be backed by an insurance policy to cover the risk of the debtor's death and/or loss of employment.

INTERBANK DEPOSIT PROTECTION FUND

The bank deposit protection system recognized by the Bank of Italy: if a bank is placed under compulsory administrative liquidation, the fund guarantees the prompt repayment to depositors of deposits up to €100,000. The guarantee is applied per bank and per depositor. Every Italian bank participates in the system, except cooperative credit banks, which have their own equivalent deposit protection fund.

INTERBANK REGISTER OF BAD CHEQUES AND PAYMENT CARDS (CAI - Centrale di Allarme Interbancaria)

A computerized archive set up by the Bank of Italy to ensure the smooth functioning of the payment system. The register contains data on:

  • persons who have issued unauthorized or uncovered bank and postal cheques;
  • persons whose authorization to use credit and/or debt cards has been revoked because of failure to pay amounts due for transactions conducted.

In the case of cheques, registration in the CAI results in ‘system-wide revocation’, meaning that the person is barred from issuing cheques and opening new cheque facilities at any bank branch or postal office within the system for six months.

As regards payment cards, a person is entered into the register when their authorization to use a credit or debit card has been revoked for two years. However, registration is only of informational value. This means that any issuer can decide for itself whether or not to issue a card to a person listed in the register.

INTEREST (CREDITOR AND DEBTOR)

For current account holders, creditor interest is the interest accrued on amounts deposited, and is credited to the account after taxes are withheld. Debtor interest is the interest paid by the customer on amounts drawn beyond the balance available on the account. This interest is then charged to the account.

INTEREST ON ARREARS

Interest on arrears (i.e. interest on late payments) is an extra charge that must be paid if an instalment is paid after the due date. The charge increases proportionally to the amount of the instalment payment.

INTERNET (INTERNET BANKING)

With internet banking, bank customers can carry out banking transactions - such as credit transfers and payments - through the internet without having to go to a branch. Internet banking services are accessed by entering one's username and password. In addition to the convenience, internet banking often offers banking services at a lower cost.

INVESTMENT ADVICE

Investment advice involves the provision of customized recommendations to a client, at their request or at the initiative of the investment firm, regarding one or more transactions relating to financial instruments. Financial advice includes the investment services/activities governed by Directive 2014/65/EU - MiFID2 (Market in Financial Instruments Directive). Financial advice can be offered by a company or an independent advisor. You should always find out whether the advice service is reliable, how much it costs and whether the advisor has certified skills.

INVESTMENT FUNDS DI INVESTIMENTO

These are investment instruments whereby investors entrust their savings to an asset management company, which employs skilled and experienced professionals to manage the range of funds in accordance with their investment objectives ('asset management'). Savers who join a fund buy units representing shares in the fund’s assets.

ISSUE (OF FINANCIAL INSTRUMENTS)

The procedure whereby a company, public body or other entity creates a financial instrument, normally in order to attract funds from the investors who purchase it. All the features of the instrument are decided at issuance. For instance, in the case of bonds, the face value, the maturity date, the coupon payment amount, and the terms and conditions for the circulation of the security. Most financial instruments are identified by a unique code called ISIN (International Securities Identification Number), assigned by the national central bank (e.g. Banca d'Italia), either at issue or when the security is traded.

ISSUER (PAYMENT CARDS)

An institution that issues payment cards. It may not necessarily be the bank where you have your account.