A
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Account balance
The amount of money in an account at the start of the business day, including all deposits and withdrawals posted the previous night, whether or not the funds have been collected. See “collected balance.”
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Account statement
A printed or online statement of all the funds paid out by or paid into your account during a statement cycle.
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Active account
An open bank account in which transactions can be made; usually an account that has had activity within the last 3 years.
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Annual percentage yield (APY)
The total amount of interest paid by the bank on your deposit account (checking, savings, CDs, IRAs) during the year. Includes both interest paid on the amount held in the account, as well as compounded interest for the year.
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Automated Clearing House (ACH)
A nationwide funds transfer network that enables participating financial institutions to electronically credit, debit and settle entries to bank accounts.
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Automatic funds transfer
An arrangement that automatically moves funds from your account to another on a date you choose; for example, every payday.
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Automatic payment
An arrangement that automatically deducts funds from your account (usually a checking account) on the day you choose in order to pay a recurring bill (such as car, insurance, mortgage payments, etc.)
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Available balance
The amount of money in your account that is available for immediate use.
Average daily balance
The sum of all the daily account balances during an accounting period (usually a monthly statement cycle), divided by the number of days in the same period. May be used to determine whether a service charge applies or whether your account qualifies for special services or discounts. See "minimum daily balance."
B
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Bill Pay
An optional service from VisionBank that lets you pay your bills online.
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Bounced check
A check that is returned to the depositor because there are not sufficient funds to pay the amount of the check.
C
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Canceled check
A check that has been paid. A canceled check is usually acceptable as legal proof of payment.
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Cashier’s check
A check issued by a bank and paid from its funds. A cashier's check will not usually bounce because the amount it is written for is paid to the bank when it is issued, and the bank then assumes the obligation.
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Certificate of Deposit (CD)
A time deposit that is payable at the end of a specified amount of time or "term." CDs generally pay a fixed rate of interest and offer a higher interest rate than other types of deposit accounts. Terms can range from 7 days to 10 years. CDs are insured by the FDIC up to applicable limits. If early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. See "Federal Deposit Insurance Corporation."
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Certified check
A check for which the bank guarantees payment.
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Checking account
A type of deposit account that enables customers to deposit funds and withdraw available funds on demand, typically by writing a check or using a debit card. These accounts are sometimes interest-bearing.
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Check card
See "Debit Card."
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Collected balance
The balance in a deposit account, not including items that have not yet been paid or collected. See "Account balance."
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Compound interest
Interest that is calculated on both the accumulated interest and the principal balance in the account. The more frequently interest is compounded, the higher the effective yield.
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Credit
The increase in a deposit account balance that occurs when a deposit is made to the account. See also "debit."
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Credit card
A plastic card issued to an individual that allows that person to use credit to purchase goods and services. A credit limit is established for each card holder.
D
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Debit
A decrease in a deposit account's balance, such as occurs when a check posted to the account. See also "credit."
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Debit card
A plastic card that deducts money directly from the designated VisionBank checking account to pay for goods or services. It can be used anywhere Visa® or MasterCard® debit cards are accepted and no interest is charged. A debit card can also be used at ATMs to withdraw cash.
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Deposit
Money added into a customer's bank account.
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Direct deposit
A service that automatically transfers recurring deposits into your checking, savings or money market account. Deposits can include salary, pension, Social Security and Supplemental Security Income (SSI) benefits, or other regular monthly income.
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Disclosure
Information about an account's services, fees and regulatory requirements.
E
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Electronic funds transfer (EFT)
Any transfer of funds initiated by electronic means from an electronic terminal, telephone, computer, ATM or magnetic tape.
F
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Federal Deposit Insurance Corporation (FDIC)
The FDIC is an independent agency of the United States government that protects people who have funds on deposit with FDIC-insured banks and savings associations against the loss of their insured deposits if their bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
The FDIC guarantees deposit accounts (checking, savings, money market savings and CDs) up to applicable limits, which is $250,000 per depositor, per insured bank, for each account ownership category. -
Float
The time between the date when a check is deposited to an account and the date the funds become available.
I
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Inactive account
A bank account in which there have not been any transactions for an extended period of time. In some cases, when there has been no activity in the account within a period specified by state law (generally at least 3 years), the law requires the bank to turn the account over to the state as unclaimed property.
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Interest-bearing account
An account that earns interest.
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Interest rate
The percentage of interest paid on an interest-bearing account, such as savings, CDs and some checking accounts; also, the percentage charged on a loan or line of credit. Different types of accounts and loans pay or charge different rates of interest. See "original interest rate."
L
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Linked account
Any account linked to another account at the same financial institution so that funds can be transferred electronically between accounts. In some cases, the combined balance of all linked accounts may determine whether monthly service and other fees are applied to the account.
M
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Maturity date
The date that a CD term ends, the bank stops paying the agreed-upon interest and you can choose to take the money deposited or renew the term.
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Minimum daily balance
The lowest end-of-day balance in an account during a statement cycle; a certain minimum daily balance is often required with interest-bearing accounts to avoid a service charge or qualify for special services. See "average daily balance."
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Money market account
A savings account that generally earns higher rates than regular savings accounts and limits you to no more than a total of six automatic or preauthorized transfers, telephone transfers or payments (including check, draft and point of sale transactions, if checks or debit cards are allowed on the account) from a savings account each monthly statement cycle.
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Money order
A financial instrument, issued by a bank or other institution, allowing the individual named on the order to receive a specified amount of cash on demand. Often used by people who do not have checking accounts.
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Monthly fee
The fee charged to maintain a particular account, such as a checking account.
N
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Non-bank ATM
An ATM or cash machine that provides ATM cardholders with access to their accounts, but is owned and operated by an independent bank or financial institution. Fees generally apply to cash withdrawals at non-bank ATMs and they don't generally accept deposits.
O
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Online Banking
A service that allows an account holder to obtain account information and manage certain banking transactions via personal computer or mobile device.
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Original interest rate
Rate assigned when you open a CD account. The original interest rate is listed on your CD account receipt and statement.
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Overdraft
An overdraft occurs when a bank makes a payment that has been requested (such as a check), even though there are not enough funds available in the account to cover it. This type of payment is known as an "overdraft" and the account is said to have been "overdrawn."
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Overdraft Item
An Overdraft Item Fee is charged when you write a check or make a withdrawal for an amount that is more than the balance in your checking account and the bank pays the overdraft item.
P
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Personal identification number (PIN)
The unique number you must use to access your account at an ATM or make a purchase with a debit card. Your ATM number should always be kept confidential.
R
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Rate
See "interest rate."
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Regulation E
Regulation E carries out the purposes of the Electronic Funds Transfer Act, which establishes the basic rights, liabilities and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. The primary objective of the Act and Regulation E is the protection of individual consumers engaging in electronic fund transfers.
Electronic fund transfer systems include automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and preauthorized transfers from or to a consumer's account (such as direct deposit and Social Security payments). The term "electronic funds transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's account.S
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Savings account
A deposit account which pays interest, but does not allow funds to be withdrawn by writing a check.
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Stop payment
A request that the bank not pay a check or payment you have written or authorized. Stop-payment orders are generally placed for checks that have been lost or stolen or in situations where a purchase is disputed. A stop payment order generally expires after 6 months and a fee is usually charged for this service.
T
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Time deposit or CD
An agreement to deposit a stated amount in the bank for a fixed length of time during which a fixed rate of interest will be paid. Penalties are assessed if the funds are withdrawn before the end of the agreed-upon period.
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Transfer
The movement of funds from one account to another.
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Travelers cheque/travelers check
Check issued by a financial institution that functions as cash, but is protected against loss or theft. Useful when traveling.
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U
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Uncollected funds
Refers to items deposited in an account that have not yet been collected (paid) by the bank on which they were drawn.
V
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Variable rate
An interest rate that may fluctuate (adjust) during the term of a loan, line of credit, or deposit account. Rates may adjust due to changes in an index rate (such as the prime rate); in some situations, the bank may set its own rate.
