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Definitions

Banking Terms

This glossary of terms and definitions is designed to help you understand banking terms. If you are interested in receiving additional information about products or services, please contact your local facility (click HERE for contact info for all facilities) or send an email to info@cnbil.com. Please remember, however, that electronic mail is not secure, and confidential or personal information should not be communicated via email.


Accrued Interest -- Accrued interest is the interest that has accumulated on an investment, but is not yet paid.

ACH Processing -- ACH (Automated Clearing House) processing occurs between a nationwide network of financial institutions that send electronic messages via telecommunication lines instead of paper (checks) to transfer money between parties. The most common ACH transactions are direct deposit, pre-authorized debits, cash concentration, and corporate-to-corporate payments.

Annual Percentage Yield (APY) -- The annual percentage yield is a very accurate and calculated measure of yield that is paid on a standard bank deposit account.

Automatic Funds Transfer (AFT) -- An automatic transfer between accounts or loans in accordance with your instruction to your financial institution.

Automated Teller Machine (ATM) -- A machine that allows the customer to perform some of the more common teller transactions, such as cash withdrawals, deposits, and transfers. ATMs are generally accessible 24 hours a day, 7 days a week.

Basic Fee -- A fee charged each monthly statement cycle for most checking and savings accounts.

Cashier's Check -- A check drawn by a bank on itself, signed by a cashier or other authorized bank officer and payable to a third party named by the customer. Cashier's checks are universally accepted.

Certificate of Deposit (CD) -- a type of deposit account, typically with a fixed minimum term and a minimum initial deposit; interest payments may be either fixed or variable. Generally, CDs offer a higher interest rate than other deposit accounts.

Check Card (Debit Card) -- a plastic card with the MasterCard logo, designed to give a customer access to funds in his/her checking account to obtain cash, make a purchase, or transfer funds from one account to another. The cards are accepted around the world where you see the MasterCard logo.

Check Safekeeping -- the process of microfilming customer's paid checks. the microfilm is the official record of the transaction and is retained by the financial institution. Canceled checks are stored rather than being returned to the customer.

Debit Transactions -- transactions that reduce the amount of money in your bank account. Debits include traditional paper checks, automatic withdrawals, debit card purchases, and other electronic transactions that you authorize to withdraw funds from your account.

Debit Fee -- A fee charged per debit transaction.

Debit POS Purchases -- Transactions when you use your debit card for payment at the point-of-sale (POS), with with the PIN option or with a signature authorization. Debit signature transactions are processed via the credit card networks and may take several days to post and settle to your account. ATM-processed transactions do not count toward qualifying debit card transactions.

Direct Deposit -- Funds are automatically deposited to your account per your instructions to your employer, the Social Security Administration, loans, or other payers of your choice. In order for accurate account information to be obtained, you must provide a voided copy of a check from the account to which you would like the direct deposit to be made.

EFT -- Electronic Funds Transfer

Individual Retirement Account (IRA) -- A personal, tax-deferred retirement savings account for people who are employed and their spouses. There are two types of IRAs to choose from for eligible individuals: the Traditional IRA (contributions are tax-deductible on both state and federal tax returns for the year you make the contribution, while withdrawals at retirement are taxed at ordinary income tax rates) and the Roth IRA (provide no tax break for contributions, but earnings and withdrawals are generally tax-free). In both cases, earnings are not taxed until they are paid out of the account.

Interest -- Interest is a charge that is paid by any borrower or debtor for the use of money, which is calculated on the basis of the rate of interest, time period, of the debt, and the principal amount that was borrowed.

Jumbo CD -- A CD with a very large denomination, usually $1 million or more.

Money Market Deposit Account -- A deposit account offered by financial institutions that is designed to be directly equivalent to and competitive with money market mutual funds. These accounts, unlike mutual funds, are FDIC insured.

Official Bank Check -- A check drawn by a bank on itself, signed by a cashier or other authorized bank officer, and payable to a third party named by the customer. Official Bank Checks, often known as Cashier's Checks, are universally accepted.

Online Banking -- The accessing of bank information, accounts, and transactions with the help of a computer through the financial institution's website on the Internet. This is also referred to as Internet banking or e-banking.

Personal Identification Number (PIN) -- A private number or code used by the account holder to authorize a transaction or obtain information regarding his/her account. Often used in conjunction with a plastic card or with a telephone voice response system.

Uncollected Funds -- Funds that have been deposited in an account or cashed against an account by a check that has not yet been cleared through the check collection process and paid by the drawee bank. Financial institutions typically place a temporary hold on their customers' uncollected funds, making those funds unavailable for withdrawal until the time period of the hold expires.

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