Personal Glossary
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Annual Percentage Yield (APY)
A percentage rate reflecting the total amount of interest paid on a deposit account (checking, savings, CDs, IRAs), based on the interest rate and the effect of interest compounding for one year.
Automated Clearinghouse (ACH)
A computer-based clearing and settlement operation, often operated by a Federal Reserve Bank, established for the exchange of electronic transactions among participating depository institutions. Such electronic transactions can be substituted for paper checks used to make recurring payments, such as payroll checks, loan payments, insurance premiums, etc.
ATM (Automated Teller Machine)
Machines that allow the user to perform various banking transactions, including withdrawals and deposits.
Certificate of Deposit (CD)
A deposit account that cannot be withdrawn from before a specified maturity date without being subject to an interest penalty for early withdrawal.
Debit Card
A card that resembles a credit or ATM card, but which debits a transaction account (checking account) with the transfers occurring simultaneously with the customer's purchase. Generally, a debit card may be used at specified automated payment terminals, such as retail stores and gas stations, or an ATM.
Share Insurance Fund (SIF)
Insurance afforded to depositors at certain banks, which guarantees against loss of funds in excess of the FDIC insurance.
Direct Deposit
A method of payment, which electronically credits your checking, or savings account; most commonly, payroll and government checks.
Electronic Fund Transfer System (EFTS)
A variety of systems and technologies for transferring funds electronically rather than by check. Includes Fedwire, ACH and other automated systems.
Federal Deposit Insurance Corporation (FDIC)
An agency of the federal government that insure accounts at most commercial banks and mutual savings banks. The FDIC also has primary federal supervisory authority over insured state banks that are not members of the Federal Reserve System.
Interest
The amount the lender charges to lend you money, or the amount the depository institution pays you for funds you keep on deposit.
Individual Retirement Account (IRA)
A personal retirement account, which allows the individual to defer taxes on earnings until withdrawn. Also, certain contributions may be tax deductible in the tax year for which they are made.
Point of Sale (POS)
Terminals that allow you to pay for purchases with your debit card.
Transaction account
An account, which allows transfers to third parties, such as a checking account or NOW account at a bank or other depository institution.
Truth-in-savings disclosure
Federal law requires the financial institution to provide you with this document which gives pertinent details about your new account, your maturing CD or when you inquire about an account.
Wire transfer
Electronic transfer of funds.
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