right of offset

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Word: Right of Offset

Part of Speech: Noun (specifically used in banking)

Definition: The "right of offset" is the legal ability of a bank to take money from your deposited account to pay off a loan you owe them if you cannot pay it back. This usually happens when you have a loan that is behind on payments or in default.

Usage Instructions:

• This term is mostly used in banking, finance, and legal situations. It's important to understand this concept if you have both a bank account and a loan with the same bank.

Example:

• If you have a savings account with $1,000 and a loan of $1,500 that you haven’t been able to pay, the bank may use its right of offset to take the $1,000 from your savings account to cover part of your loan.

Advanced Usage:

• The right of offset is often explained in terms of account agreements when you open a bank account or take out a loan. It's a common practice for banks to protect themselves from losses due to unpaid loans.

Word Variants:

• There are no direct variants of this phrase, but it can be discussed alongside similar banking terms like "collateral" or "garnishment."

Different Meaning:

• In a broader context, "offset" can refer to balancing out two different amounts. For example, in accounting, it might mean reducing an expense by an income.

Synonyms:

• Set-off
• Right of set-off

Idioms and Phrasal Verbs:

• There are no specific idioms or phrasal verbs that directly relate to "right of offset," but you could use phrases like "to balance the books" in a general financial context.

Summary:

The "right of offset" is a financial term used mainly in banking, where a bank can take money from your account to pay for a loan you owe if you're unable to make payments.

Academic

Noun

1. (banking) the legal right of a bank to seize deposited funds to cover a loan that is in default