Common Banking Terms

APY – Annual Percentage Yield (APY) is the amount of interest you gain from keeping money in an account in a year, including compound interest.

ATM – An Automated Teller Machine (ATM) is an electronic banking outlet, which allows customers to complete basic transactions on their own and outside of a bank’s branch office hours.

Automated Clearing House (ACH) – An electronic network for financial transactions in the United States. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, payroll and vendor payments.

Check – A written, dated and signed instrument that directs a bank to pay a definite sum of money to a payee. The money is drawn from a bank account, also known as a checking account.

Debit Card – A card issued by a bank allowing the holder to transfer money electronically to another bank account when making a purchase.

Deposit – A sum of money placed or kept in a bank account.

FDIC Insurance – The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in banks and savings associations. FDIC insurance is backed by the full faith and credit of the United States government. It covers all deposit accounts including Checking accounts, Savings accounts, Money market deposit accounts and
Certificates of deposit. FDIC insurance does not cover other financial products and services that banks may offer, such as stocks, bonds, mutual funds, life insurance policies, annuities or securities. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

Interest – Money paid regularly at a particular rate for the use of money lent.

Minimum Balance Requirement – The lowest amount that a banking institution requires account holders to have in their accounts each day in order to waive maintenance fees.

Overdraft – A deficit in a bank account caused by drawing more money than the account holds.

Returned Item Fee – The fee incurred when your checking account doesn't have enough funds to cover a payment that is requested. 


Withdrawal – The act of taking money out of an account.

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