financial products

What's the difference between a share account and a share draft account?

A share draft account is a liquid account at a credit union that allows you to make frequent withdrawals and payments. If you're familiar with checking accounts, share draft accounts are essentially the same. Again, the only difference is that a "share" account is at a credit union instead of a bank

Automatic electronic transfer of funds that debits/credits an account for a specified amount.

ACH - automated clearing house

Annual Percentage Rate - a measure of the true cost of borrowing on an annual basis (this takes into consideration the rate and other fees that are part of a loan). Annual percentage rate refers to the rate paid to a financial institution by a borrower

APR - as low as

Annual Percentage Yield - a measure of how much interest will be paid on an annual basis on a deposit account, accounting for compound interest. The annual percentage yield is generally used to refer to the rate paid to a depositor or lender by a financial institution.

APY

Card issued by a financial institution that allows an individual access to money from either their checking or savings accounts. This card does not have a Visa or MasterCard logo.

ATM Card

Why are savings and checking accounts referred to as "share" accounts?

Your savings account represents your share of the credit union, thus it's called a "share account" (or sometimes a share savings account). Checking accounts are "draft share accounts" because they're share accounts you can draft checks from (and more, like use online bill pay and debit cards)

Provision of repayment of a loan in periodic payments over a stated period of time.

amortize - pay until death

An online process permitting members to pay bills (utilities, mortgage, etc.) using one convenient website, without the use of checks

bill payment

An account that funds are deposited into at a financial institution for a specific period of time and at a specific rate of interest.

certificate of deposit

A person, other than the primary borrower, who signs a note in order to give additional protection to the creditor granting the loan. This person may also be referred to as a co-borrower.

co-maker - equal liability

. A plastic card issued by the credit union that has Visa or MasterCard logo. This card can be used with a PIN (personal identification number) or processed as a credit transaction. The funds are typically withdrawn from a share draft/checking account

debit card

Gives the convenience of having a check deposited immediately.

direct deposit

A share of earnings distributed to shareholders of a credit union.

dividend

A group of individuals who qualify as members for a particular credit union. A credit union's field of membership is limited to those who share a common bond, such as a place of employment, religious or community association.

field of membership

A period of time after a due date when payment is not subject to late charges.

grace period

A publicly recorded claim to real property.

lien

A loan secured by real property through a lien.

mortgage

A method for members to view their account(s), make payments, transfer funds through the Internet hosted by the Credit Union's webpage

online banking

A credit plan (loan) in which a the credit union allows the member to make purchases or obtain loans up to a pre-approved limit without negotiating a new contract each time funds are needed. (e.g. credit card).

open ended credit

A share draft/checking account set up to have funds automatically transferred from another savings account or a line of credit loan to cover overdrafts should the account become overdrawn.

overdraft protection

The actual amount of a loan before finance charges and other charges are added or subtracted.

principal

. A nine digit bank code which appears on the bottom of negotiable instruments such as checks. It is used to identify the financial institution on which a check was drawn. This code was designed to facilitate the sorting, bundling, and shipment of paper checks. It is also used to facilitate ACH transfers and payments

routing and transit number

. An account that is required to be opened as a prerequisite to membership at a credit union. This confers ownership rights and is the credit union's version of a savings account.

share account

An account which enables credit union members to withdraw funds or pay bills from through checks, debit cards, bill payment, or cash - a credit union's checking account.

share draft account

a.k.a. Medallion Stamp - Signature is guaranteed on a financial document.

signature guarantee

A process that prevents funds from clearing an account; usually requested for a check (there may be a fee).

stop payment

Some mortgages allow subsequent mortgages on the same property to have higher claim than the current mortgage

subordination clause

A savings account established and placed under the control of one or more persons, for the benefit of another person(s).

trust account

Transfer funds from one location to another; generally processes faster than a wire transfer

western union

Transfer funds electronically from one account to another anywhere in the world.

wire transfer