Adjusted gross income and taxable income are related numbers on a federal income tax return, but they are not interchangeable. Adjusted gross income, commonly called AGI, is an intermediate total calculated after certain adjustments to income. Taxable income generally comes later, after subtracting the standard deduction or itemized deductions and any other applicable deductions. The…
When viewing a stock quote, you may see a bid price, an ask price, and a last-traded price. These numbers can be different even though they refer to the same stock. The main difference between bid vs ask prices in stocks is: The bid price is the highest price a buyer is currently willing to…
Your credit card payment due date and statement closing date are two separate dates with different purposes. The closing date is generally the final day of a billing cycle. The card issuer totals eligible transactions, payments, credits, fees, and interest to create your monthly statement. The payment due date is the deadline for making at…
Exchange-traded notes and exchange-traded funds can look almost identical in a brokerage account. Both trade on an exchange, usually track a benchmark, and can be bought or sold during market hours. Their legal structures and risks, however, are fundamentally different. The main difference between an ETN vs ETF is that an ETF is generally a…
Mortgage insurance and homeowners insurance may both appear among your homebuying expenses, but they provide completely different forms of protection. The main difference between mortgage insurance vs homeowners insurance is who and what each policy protects: Mortgage insurance primarily protects the mortgage lender if the borrower defaults. Homeowners insurance protects the home and may cover…
A guarantor and a cosigner can both help someone qualify for a loan, apartment, or other financial agreement. However, they may not assume responsibility in exactly the same way. The main difference between a guarantor vs cosigner is usually when and how each person becomes responsible for payment. A cosigner commonly shares legal responsibility for…
A line of credit and a credit card both let you borrow repeatedly up to an approved limit. As you repay the balance, the available credit generally becomes usable again. However, they differ in how you access the money, when interest begins, the fees you may pay, and the expenses for which each product is…
A power of attorney is generally a private legal arrangement in which a person voluntarily authorizes an agent to act on their behalf. Guardianship is a court-created relationship in which a judge appoints someone to make specified decisions for a person found to need legal protection. The practical difference is control. With a power of…
A savings account and a money market account can both provide a secure place for short-term savings while earning interest. The main difference is how each account balances yield, balance requirements, fees, and access to your money. A traditional or high-yield savings account is usually the simpler choice. It may have a low opening-deposit requirement,…