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Banking Terms

A-BC-E F-HI-KL-MN-OP-QR-ST-VW-Z

A

ACH

An acronym for “Automated Clearing House”; an electronic network for financial institutions in the United States used to electronically transfer both credits and debits; ACH credit transfers include direct deposit, payroll, and vendor payments. ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Both the government and the commercial sectors use ACH payments.

©2011 NACHA - The Electronic Payments Association® All rights reserved.

Addenda Record

Additional payment related information that can be sent along with a Corporate Trade Exchange.

Adjustable Rate Mortgage

An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

AFT

An acronym for “Automatic Funds Transfer”; an automatic draft setup to collect funds for a monthly payment, usually used for loan payments.

©2011 NACHA - The Electronic Payments Association® All rights reserved.

Agent

A person who acts for another person (Principal) by the Principal's authority.

The Glossary of Fiduciary Terms, second edition, published by the American Bankers Association

Altered Check

A check or another negotiable instrument that has been materially and maliciously altered to effect a fraud. Usually either the name of the payee or the amount of the check is changed.

www.investopedia.com

Amortization

A loan repayment plan, which enables the borrower to reduce his debt gradually through monthly payments of principal and interest.

Amortization Schedule

A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principals and shows the remaining balance after each payment is made.

Amortization Term

The amount of time required to amortize the mortgage loan. The amortization is expressed as a number of months. For example, for a 30 year fixed rate mortgage, the amortization term is 360 months.

Amortize

To repay a mortgage with regular payments that cover both principal and interest.

Ancillary

Subordinate or auxiliary to something or someone else; used in such terms as ancillary administration, ancillary administrator, and ancillary guardian.

The Glossary of Fiduciary Terms, second edition, published by the American Bankers Association

Annual Exclusion

The amount of property that may annually be given to a donee, regardless of donee's relationship to the donor, free of gift tax. Only gifts of present interest qualify for the annual exclusion.

The Glossary of Fiduciary Terms, second edition, published by the American Bankers Association

Annual Percentage Rate (APR)

To make it easier for consumers to compare mortgage loan interest rates, the federal government developed a standard format called an "Annual Percentage Rate" or APR to provide an effective interest rate for comparison shopping purposes. Some of the costs that you pay at closing are factored into the APR for ease of comparison. Your actual monthly payments are based on the periodic interest rate, not the APR.

Annual Percentage Yield (APY)

The amount of money you will earn on an account with the effect of compounding interest. Some accounts pay you interest every month, some pay you interest every few months, some pay you interest once a year, etc. So the APY lets you see which account will earn more in a year. For example, if a bank offers you a choice between two accounts. One earns 6% interest that is paid at the end of the year. The other account earns 0.5% per month with monthly compounding. At first glance, the yields appear equal because 12 months multiplied by 0.5% equals 6%, so it appears that both accounts would earn 6% in a year. However, when the effects of compounding are included by calculating the APY, we find that the second investment actually yields 6.17%. So the account that earns 0.5% per month with monthly compounding will earn more.

Annuity

A specified income paid yearly or at other regular intervals, often on a guaranteed dollar basis.

Antivirus Software

Software that monitors a computer for Viruses by looking for irregularities in a computer system and then comparing its findings to a database of virus information. It is important to update virus definitions or signatures regularly and upgrade the software periodically to protect against newly created viruses.

Source: http://www.answers.com/topic/antivirus-software#ixzz1D1kzf9r0

Application

The term "application" generally refers to a form that is used to collect information from a borrower by a lender.

Appraisal

An analysis performed by a qualified individual to determine the estimated value of a home.

Appraisal Fee

In order to verify that the value of your home supports the loan amount you request, an appraisal will be ordered by the lender. The appraisal is generally performed by a professional who is familiar with home values in the area and may or may not require an interior inspection of the home. The fee for the appraisal is commonly passed on to the borrower by the lender. For our comparison purposes, the appraisal fee is a third party fee.

Appreciation

An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience and analysis of the property.

ARC

An acronym for “Accounts Receivable Entry”; used when a business converts a consumer's check to an ACH entry when the check is mailed or dropped off in a night drop.

©2011 NACHA - The Electronic Payments Association® All rights reserved.

ARM

An ARM (adjustable rate mortgage) is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

Asset Allocation

The process of deciding how investment dollars will be apportioned among available asset classes.

WK: 401(k) Answer Book - Great West Retirement Services, Glossary - © 2011 Wolters Kluwer

ATM

An acronym for “Automated Teller Machine”; an electronic banking machine that dispenses cash, accepts deposits, and performs other services when a customer inserts a plastic card and pushes the proper coded buttons.

Dictionary.com Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2011.

Automatic Transfer Service (ATS)

On a general level, it can mean any automatic transfer of funds between customer accounts. For example, a regular transfer from a checking account to pay off a bank loan, or a monthly transfer from a checking account to a savings account.

More specifically, it describes the overdraft protection provided when there is an automatic transfer of funds from a customer's savings account to his or her checking account when there are insufficient funds to cover unpaid checks or maintain a minumum balance.

http://www.investopedia.com/terms/a/automatic-transfer-service.asp

Available Balance

The portion of the balance in a checking or non-demand account that is available to the account holder for spending, withdrawal, or transfer. If a check deposit has not been cleared by the issuing bank, the funds will not be available to the account holder even though they may show up in the account's stated total funds.
The net effect is that the account balance may be different from the balance that is available to the account holder for spending, withdrawal or transfer.

OR

The portion of a customer's account balance on which the bank has placed no restrictions, making it available for immediate withdrawal.

Source: www.investopedia.com

B

Balanced Fund

A mutual fund that seeks to provide current income and long-term growth from a combination of stocks and bonds.

WK: 401(k) Answer Book - Great West Retirement Services, Glossary - © 2011 Wolters Kluwer

Bank Directors

The individuals elected by the bank's stockholders to constitute the board of directors. The board of directors is the governing body of the corporation and they are ultimately responsible for the bank's financial performance.

Bank Officer

A bank officer is an employee of a bank endowed with the legal capacity to agree to and sign documents on behalf of the institution. The title is usually held by branch managers, assistant managers, loan officers, and other experienced personnel. Executives and others holding titles such as "Vice President" are considered officers of the bank for legal purposes.
The title is also used to designate those branch personnel who act in a supervisory capacity. In larger banks, an officer at the branch level sometimes reviews accounts and makes decisions on whether to honour NSF items or to return them. Such decisions are usually left up to those who are legally responsible to act on behalf of the bank.

Source: http://en.wikipedia.org/wiki/Bank_officer

Beneficiary

The person to whom all or a portion of a deceased participant's account balance is payable.

WK: 401(k) Answer Book - Great West Retirement Services, Glossary - © 2011 Wolters Kluwer

BOC

An acronym for “Back Office Conversion Entry”; used when a business converts your check to an ACH entry after the purchase is made.

©2011 NACHA - The Electronic Payments Association® All rights reserved.

Bond

A type of debt instrument issued by corporations, governments, and government agencies. The issuer makes regular interest payments and promises to pay back, or redeem, the face value of the bond at a specified time called a maturity date.

WK: 401(k) Answer Book - Great West Retirement Services, Glossary - © 2011 Wolters Kluwer

Bond Fund

A mutual fund that invests primarily in bonds; generally, corporate, municipal, or U.S. government debt obligations. Bond funds usually emphasize income rather than growth.

WK: 401(k) Answer Book - Great West Retirement Services, Glossary - © 2011 Wolters Kluwer

Bond/Stock Power

A form of assignment executed by the owner of registered bonds or stock, which contains an irrevocable appointment of an attorney-in-fact to make the actual transfer on the books of the corporation.

The Glossary of Fiduciary Terms, second edition, published by the American Bankers Association

Bookkeeping Department

The bank unit that maintains and updates all records of depositors accounts.

Bookmarks

A marker within a file that allows a user to easily return to a given position. 2. A remembered address (Url) that allows a user to go directly to a given site on the World Wide Web. This terminology is used by Netscape Navigator; Microsoft's Internet Explorer uses the term Favorites.

Read more: http://www.answers.com/topic/bookmark#ixzz1D1lrljq1

Bounced Check

(noun) A check that the bank returns because the person who wrote it did not have enough money in his/her account to pay it.

Brokerage Firm

A business that arranges contracts for the purchase and sale of stocks and bonds.

Browser

A program that accesses and displays files and other data available on the Internet and other networks. Entering a website's URL in the address window of a browser will bring up that website in the browser's main window.

The American Heritage® Science Dictionary Copyright © 2005 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.
 
 

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