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Clearing House
An institution that processes financial transactions, such as the exchange of securities, between two parties.
More Details
A clearing house is a financial institution that acts as an intermediary between two parties in a financial transaction. Its main function is to ensure the smooth and efficient settlement of transactions between the two parties.
Example
If you were to buy shares of a publicly traded company through a brokerage firm, the trade would be cleared through a clearing house. This helps to reduce risk and increase the efficiency of your transaction.
Related Terms
Available Credit
The amount of credit currently accessible on a credit card or line of credit. It is the amount that can be borrowed and used for transactions.
Insufficient Funds
A situation in which an individual or institution does not have enough money in their account to cover a transaction or withdrawal.
Returned Item Fee
A fee that is charged to a bank account holder when a check or electronic payment they have made is returned unpaid.