Know your Banking Lingo
As technology continues to evolve, so does the language used to discuss banking. To help you stay up to date with the latest lingo, we've put together a glossary of the most common banking terms. From acronyms to jargon, this glossary will help you make sense of the banking world and make informed decisions about your finances. Read on to discover the language of banking!
Account Reconciliation: The process of comparing and verifying two sets of records to ensure accuracy.
ACH: Automated Clearing House, a network that processes financial transactions, including direct deposits and payments.
APR: Annual Percentage Rate, the cost of borrowing money expressed as a yearly rate.
ATM: Automated Teller Machine, a machine that allows customers to make deposits and withdrawals from their bank accounts.
Balance: The amount of money in a bank account at a given time.
Bank Statement: A document issued by a bank that summarizes all the transactions in a customer’s account over a given period.
Cashier’s Check: A type of check issued by a bank and made payable to a specific person or entity.
CD Account: Certificate of Deposit, an account that pays a higher rate of interest in exchange for a customer’s commitment to keeping their money in the account for a fixed period of time.
Checking Account: An account that allows customers to easily access their money with checks, debit cards, and digital transfers.
Credit Card: A card that allows customers to borrow money from a bank or other financial institution to make purchases.
Credit Score: A numerical representation of a person’s creditworthiness, based on their credit history.
Debit Card: A card that allows customers to withdraw money from their checking account without using cash or checks.
Deposit: Money that is put into a bank account.
Digital Wallet: An online system that stores a customer’s payment information and can be used to make payments online or in person.
eBill: An electronic bill sent to a customer by a company or service provider.
Interest Rate: The cost of borrowing money, expressed as a percentage of the amount borrowed.
Investment: The purchase of assets with the expectation of making a profit.
Loan: Money that is borrowed from a bank or other financial institution.
Lockbox Banking: A type of banking service where a customer’s payments are received and processed by a third-party company.
Merchant Services: A type of financial service that allows businesses to accept payments from customers.
Mortgage: A type of loan used to purchase real estate, usually secured by the property itself.
Positive Pay: A fraud prevention system that requires a customer to provide information about the date, amount, and payee of a check before it is cleared.
Remote Deposit: The ability to deposit checks into a bank account without going to a physical branch.
Savings Account: An account that allows customers to save money and earn interest on their deposits.
Wire Transfer: A type of electronic transfer of money between two parties.
Withdrawal: The act of taking money out of a bank account.
Zelle: A digital payments network owned by Early Warning Services, LLC.