Counter credit occurs when a letter of credit is issued as collateral for another letter of credit, according to BusinessDictionary.com. The bank of the first credit becomes the issuer of the second credit line. Both credits are irrevocable.
BusinessDictionary.com adds that counter credit is also called back-to-back letter of credit or reciprocal letter of credit. Investopedia notes that both forms of credit are meant to help sellers purchase items or services from subcontractors. The first letter of credit comes from the buyer's bank, and the seller relies on his bank to receive the second letter of credit. The subcontractor is the beneficiary of the credits, and payment is issued when the subcontractor fulfills his obligations. Counter credit is normally found when international parties are involved.Learn More
A home equity line of credit, or HELOC, is a loan taken out that uses a person's home equity as collateral. Contrary to a traditional loan where funds are disbursed all at once, a HELOC has a draw period during which funds can be accessed as needed, up to a set limit. In addition to only having to pay for the funds that have been used, HELOCs often allow borrowers to pay interest only initially, according to MyFICO.Full Answer >
A fiduciary bank account is a checking or savings account in which the funds are owned by an individual or group and managed by another individual or group for the benefit of the owner, according to the U.S. Department of Veterans Affairs. Fiduciary accounts assume that the party managing the account will look out for the best interests of the fund owners.Full Answer >
It is possible to deposit one million dollars in a bank. However, depositing one million dollars in one bank account creates a balance that is above Federal Deposit Insurance Corporation limits. If the deposit is in cash, additional paperwork will be required by the bank to accept the deposit.Full Answer >
A DDA number is the account number of a checking account, or demand deposit account. A checking account and a DDA refer to the same financial instrument.Full Answer >