Unit 3 Banking Terminology
Savings Account
A bank account that earns interest
Cancelled Check
A check cleared by the financial institution. It may serve as a proof of payment
Overdraft
A check written for more than your account contains
Savings and Loan Associations
A financial institution that traditionally specialized in savings accounts and mortgage loans, but now offers many of the same services as commercial banks
Credit Union
A nonprofit financial institution that is owned by its members and organized for their benefit
Payday Loan
A relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next paycheck
Money Market Account
A savings account that requires a minimum balance and earns interest that varies from month to month
Certificate of Deposit
A savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return
Safety Deposit Box
A secure box in a bank vault that can be used to store valuables (jewelry, important papers, etc).
Checking Accounts
An account at a bank that checks can be drawn by the account depositor
Automatic Bill Pay
An automated process that pays bills directly from a banking account through an electronic payment system.
Direct Deposit
An automatic deposit of net pay to an employee's designated bank account
Overdraft Protection
An automatic loan made to an account if the balance will not cover checks written
Debit Card
An card that is attached to a specific bank account that can be used to pay for goods/services. The money is withdrawn immediately from the owners account.
Checkbook Register
An informal record of all deposits and withdrawals for a checking account
ATM
Automated Teller Machine: a machine that can handle most basic teller transactions electronically. Examples: withdrawals, deposits, transfers.
Online Banking
Banking that can be completed through your computer, tablet, or cell phone.
Service Charge
Can be monthly fees, annual fees, fees for transferring money, overdraft fees, use of out of network ATMS, acquiring new checks or many other fees the bank charges for conducting business on your behalf
Dishonored Check
Commonly known as a "Bounced Check". When someone writes a check for an amount that is greater than the amount of money they have in the account.
Check-Cashing Company
Company that will cash one's check for a fee
Deposit Slip
Contains the account holder's account number and allows money (cash or check) to be deposited into the correct account
EFT
Electronic Funds Transfer. When money is moved from one account to another through electronic means.
FDIC
Federal Deposit Insurance Corporation. The U.S. corporation insuring deposits in the United States against bank failure. The FDIC insures deposits of up to $250,000 per institution, as of 2016, as long as the bank is a member firm.
Commercial/Retail Bank
For-profit institution that offers a full range of financial services, including checking, savings and lending
NCUA
National Credit Union Administration. NCUA insures member deposits up to $250,000 in a federally insured credit union.
Blank Endorsement
Receiver of the check signs his/her name and anyone can cash or deposit the check after it has been signed
Special Endorsement
Receiver signs and writes "pay to the order of (fill in person's name)"; allows check to be transferred to a second party
Restrictive Endorsement
Receiver writes "for deposit only" and account number above his/her signature; more secure than a blank endoresement
Deposit
When money is put into an account.
Transfer
When the owner of an account moves money electronically to another account
Withdrawal
When the owner of an account takes money out of that account
Floating Check
Writing a check, knowing there are insufficient funds in your account
Reconciliation
matching your checkbook register with your bank statement
Smart Card
¨Called "electronic wallets", look like ATM cards; however, they also include a microchip (embedded microprocessor).