Bank Information

Glossary

Annual Percentage Yield (APY)
The Annual Percentage Yield assumes interest remains on the deposit until maturity.

Asset
Personal or business possessions of value, including cash, real estate and investments.

Automatic Payment
Automatic Payment authorizes periodic withdrawals to be made from a checking or savings account to pay bills.

Automatic Transfer
Automatic Transfer moves money at certain specified times from one account to another account with in our bank.

Automated Clearing House (ACH)
A facility that processes electronic transfers such as Direct Deposit or Automatic Payments.

Bank Wire (Wire Transfer)
An electronic payment system designed to transfer (wire) money between banks.

Basis Point
1/100 of a percent. There are 100 basis points in one percentage point. The difference between a rate of 9.30% and 9.27% is 3 basis points.

Broker
A broker who buys or sells stocks, bonds, annuities, etc. on behalf of others

Capital
The money invested and left in the business by the owners (Stockholders), equal to the difference between Assets and Liabilities.

Cashier's Check
A check drawn by a bank on itself, signed by a cashier or bank officer and payable to a third party named by the customer.

Certificate of Deposit (CD)
A time deposit, with a fixed maturity date, usually from three months to five years. It usually pays higher interest than a savings account.

Check 21
Check 21 is the Check Clearing for the 21st Century Act that was signed into law in 2003. The law facilitates check truncation by creating a new negotiable instrument called a substitute check, which permits banks to truncate original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks.

Check Clearing
When a check is debited against your account the check is said to have “cleared.”

Check Hold
The number of days that a financial institution holds uncollected funds before crediting a customer's account balance and allowing the use of those funds.

Clearinghouse
A central collection point where banks within a specified geographic area exchange checks with one another.

Closed-End Credit
An agreement in which the borrower agrees to pay the loan plus any finance charges in full over a definite period.

Collateral
Property pledged by a borrower to reduce a lender’s risk in making a loan. The collateral will generally be sold in the event of a default on the loan.

Construction Loan
Advancement of funds to meet construction expenses as they are incurred. When the home is completed, the amount borrowed during construction is converted to a Long Term Fixed Rate Mortgage Loan or a Renewable Mortgage Loan

Consumer Credit
Loans for personal, family or household use as opposed to business or commercial use. These loans may be secured (backed by collateral) or unsecured.

Consumer Price Index (CPI)
A measure of the cost of living determined by the Bureau of Labor Statistics.

Credit Rating
A judgment of someone's ability to repay debts, based on current and projected income and history of payment of past debts. Sometimes expressed as a number called a credit score.

Debit Card
A payment card that is linked directly to a customer's bank account.

Demand Deposit
A deposit that can be withdrawn at any time without advance notice. The most common type is the checking account.

Deputy
A person legally authorized to access a lessee’s safe deposit box.  A deputy’s right of access stops on the death of the lessee, and may cease on the incompetence or bankruptcy of the lessee.

Direct Deposit
An automatic deposit of wages or benefits to a customer's bank account.

Dividend
Distribution of earnings to shareholders. 

Early Withdrawal Penalty
A service fee charged for withdrawing funds from or closing out a time deposit before its maturity date.

Earnings Credit
The rate used by the bank to determine the allowable credit they will provide for the use of a customer’s balances on deposit with them.

Encryption
A method for ensuring the privacy and security of a consumer's personal finance information at a bank website. Encryption is the process of scrambling data so that only the intended receiver can use it. To be effective, encryption needs to be used by both the sender and the receiver.

Encumbrance
A lien, charge or liability against a property.

Equal Credit Opportunity Act
A federal law that prohibits discrimination in credit transactions on the basis of race, color, religion, national origin, sex, marital status, age, source of income or the exercise of any right as stated in the Consumer Credit Protection Act.

Federal Deposit Insurance Corporation (FDIC)
An agency of the U.S. government that manages the bank insurance funds. FDIC deposit insurance is $250,000 per depositor.

Fiduciary
One who acts for the benefit of others. A bank’s trust department acts in a fiduciary capacity.

Fixed Rate
A rate on a loan or a deposit that does not change over time.

Home Equity Loan
This type of loan uses the equity you have in your home to help finance home improvement projects, purchase vehicles or boats, consolidate other debt or credit cards, pay for that vacation you want to take, pay for college expenses or cover any other major purchases.

Home Equity Line of Credit (HELOC)
HELOCs are similar to Home Equity Loans in that you are able to borrow against the equity in your home for any purpose. The difference with a HELOC is the way the loan works. A HELOC has a maximum dollar amount that you have qualified for. It is an open end revolving line of credit tied to a variable rate.

Individual Retirement Account (IRA)
A retirement savings program for individuals to which yearly tax-deductible contributions up to a specified limit can be made. The amount contributed is not taxed until withdrawn. Withdrawal is not permitted without penalty until the individual reaches age 59 1/2

Insufficient Funds
When funds are not enough to satisfy the payment of a check or draft made on that account it is known as not sufficient funds (NSF).

Interest Income
Earnings on investments such as savings accounts and certificates of deposit.

Interest Rate
The amount charged per year on a personal or home loan. The rate varies according to the type of loan. Or, the percentage of interest paid for money in deposit accounts, without regard to compounding, shown as an annual figure.

Joint Account
A bank account owned by two or more persons who share equally in the rights and liabilities of the account.

Joint Account with Rights of Survivorship
A bank account owned by two or more persons who share equally in the rights and liabilities of the account. When one owner dies, the property automatically passes to the co-owner.

Joint Tenants in Common
Joint ownership of property by two or more persons, without right of survivorship. This form of property ownership most often is used by partners in a business partnership, and by unrelated persons holding title to real property. Each party has an indivisible share of the property; when they die, their share is inheritable by their heirs, not by the other tenants.

Legal Representative
A designation of an authorized person who will have access to the safe deposit box, regardless of the lessee’s death or incompetence.

Long Term Fixed Rate Loan
This loan offers interest rates and monthly payment amounts that are fixed for extended time periods and offers flexible down payment terms. In addition, you may choose to pay a loan discount fee in order to secure a lower interest rate.

Line of Credit
A commitment by a financial institution to lend up to a specified maximum amount to a customer during a specified period of time.

Payable on Death
A Payable On Death bank account is a regular bank account that names a specific person as the beneficiary of all funds once the bank account holder dies.

Personal Identification Number (PIN)
A confidential personal identification number, usually consisting of four to six digits, used by bank customers to access their account balances when using a self-service automated teller machine (ATM).

Phishing
An email scam that attempts to dupe consumers into revealing personal or financial information, usually by directing them to a fraudulent Web site that may contain malicious software. Typically, the email recipient is told to verify or update account information to remedy a problem and is directed to click on a link provided in the email. Or the person might be asked to complete a survey by visiting a Web site linked in the email.

Power of Attorney
A document in which the signer authorizes someone to conduct business in his or her name.

Pre-Qualification
A non-binding evaluation of a prospective borrower’s finances to determine how much he or she can borrow and on what terms.

Prime Rate
A common benchmark for consumer and business loans set by banks. The rate given to consumers on their loans is often determined as the prime rate plus a certain percentage.

Principal
The amount of money borrowed or the amount of money owed, not including interest.

Privileged Status
A network where you have access to FREE ATM transactions at over 3,201 ATMs across the nation.

Rate
Percentage a borrower pays for the use of money, usually expressed as an annual percentage.

Rate Index
A table of yields or interest rates being paid on debt that is used to determine interest-rate changes for items such as Certificates of Deposit, Checking, IRA accounts and Savings accounts.

Renewable Mortgage Loans
Renewable Mortgages loans are processed and serviced in house. These loans offer the advantage of competitive interest rates and lower closing costs than a long term fixed rate loans. Interest rates are fixed until the maturity of the loan and may be renewed at competitive market rates.

Savings bond
Savings bonds are issued in face value denominations by the U.S. Government in denominations ranging from $50 to $10,000. They are typically long-term, low-risk investment tools

Trust
A fiduciary relationship in which a person, called a trustee, holds title to property for the benefit of another person, called a beneficiary.

Variable Rate
Any interest rate or dividend that changes on a periodic basis.