ACH: Stands for Automated Clearing House. Secure electronic network that connects U.S. financial institutions for the electronic transfer of money.
Annual Percentage Yield: Rate calculated over a 365-day period taking into account the effect of compounding interest.
APYE (Annual Percentage Yield Earned): Similar to the APY but takes into account the relationship between the interest actually earned during the statement period and the average daily balance. The APYE might be different than the APY due to changes in interest rates or interest not paid on checks subject to check holds.
Assets: any owned item that has value in an exchange, especially those that can be converted to cash.
Available balance: the total amount in a bank account that may be withdrawn.
Average balance: It is calculated by adding together the full principal balance in the account each day and dividing it by the number of days in the period.
Balance: in banking it refers to the amount of money in an account or to reconciling your checkbook to your bank statement.
Certificate of Deposit: a deposit account that pays a higher interest rate than a regular savings account in exchange for a commitment to keep the money deposited for a specific period of time.
Clear: when a check amount has been deducted from the payer's account and credited to the payee's account.
Compound interest: Interest calculated not just on the original principal but also on the interest already accrued.
Custodial account: a savings account that is owned by a child but controlled by an adult until the child reaches legal age.
Debit: an amount deducted from an account. In banking it can include checks, ATM withdrawals, point of purchase payments, Debit card purchases and more.
Debit card: a plastic card that works like a credit card except purchase amounts are deducted from a checking account. Often it is enhanced with ATM capabilities.
Deposit: the amount of money put into a bank account.
Early withdrawal: When the CD is withdrawn before the end of the term.
Electronic Funds Transfer: any transfer of funds initiated electronically. Examples include ATM and Debit card transactions, POP, direct deposit or withdrawal, phone transfers, and computer transactions.
Endorse: To place a signature on the back of a document to legally declare transfer ownership.
FDIC: Short for Federal Deposit Insurance Agency. An independent agency of the U.S. government that protects or insures depositors from losses if a bank fails. Each depositor is insured to at least $250,000.
Firewall: Hardware or software that blocks unauthorized access to a computer network.
Float: the amount of time it takes for an amount to be withdrawn from your account after presenting a check for payment.
Interest: The money that you earn on your deposit or investment.
Interest rate: The interest that the account is going to earn expressed as a percentage. It doesn't reflect compounding.
Minimum to avoid fees: If the balance is lower than a certain threshold, monthly fees are charged to the account.
Minimum to earn interest: If the balance on the account is less than the minimum, the funds are not earning any interest.
Money market account: a liquid savings account that earns interest but limits the amount of transactions each month.
Money order: financial instrument that orders a sum of money to be paid to another person. It must be prepaid by the payer so it is considered a safe method of payment.
NSF/Insufficient Funds: Short for non-sufficient funds. When withdrawals from an account exceed the amount in the account creating a negative balance.
Overdraft: when withdrawals exceed the account available balance.
Overdraft protection: service offered by a bank that provides cash to an account that is overdrawn for a fee to eliminate NSFs.
PIN: Personal Identification Number. Secret number used by account holder that permits account holders to access their bank accounts and protect against unauthorized intruders.
Payee: one who receives a payment.
Penalty for early withdrawal: The Bank charges a penalty if a customer wants to withdraw money from a CD before the term.
Postdate: to put a future date on a legal document to delay payment.
Reconciliation: adjusting the difference between the balance in your checkbook and your bank statement.
Savings account: a deposit account which pays interest and is liquid.
Securities: generic term used for stocks and bonds.
Service charge: a fee charged by a business, often a bank, for handling certain transactions.
Stop payment: an order by a depositor to a bank to refuse payment of a check that has already been presented to another party but has not yet cleared.
Term: Time period that the customer agrees to keep the funds in an account without making any withdrawals.
Withdrawal: money that is removed from a bank account.
Wire Transfer: Electronic transfer of money.