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Banking Terms

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

C

Cache

An area of computer memory devoted to the high-speed retrieval of frequently used or requested data.

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

Capital

Funds invested in a company by the owners, such as stockholders, for use in conducting business. The owner's original investment plus any profit reinvested in the business.

Capital Gains (Losses)

The difference between purchase price and selling price in the sale of assets. The computation is used primarily in tax computations.

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

CAR

An acronym for “Courtesy Amount Recognition”; the process by which recognition engines read the numeric value on a check or other payment document automatically so that operators do not have to key in most of the data.

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

CCD

An acronym for “Corporate Credit or Debit”; an entry used by a Business to transfer funds to or from an account of that business with another bank or to another business.

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

CD

(noun) CD is an abbreviation for "certificate of deposit," which is a document issued by a bank stating that a person has a specified sum of money on deposit. CDs earn money at a specified rate so you can earn money while you save, but CDs have a period of time where you cannot take your money out. If you take your money out of the CD before the period of time is over, there will be a fee charged to you.

©2010 Wordsmyth (definition only) - with additions by TB&T

Certificate of Deposit (CD)

A formal receipt issued by a bank for a specified amount of money, left with the bank for a certain amount of time to receive a fixed rate of interest usually greater than a regular savings account. Interest rates are competitive and reviewed daily. They carry an interest penalty if withdrawn prior to maturity.

Charge Off

A loan, obligation, or cardholder account that the bank no longer expects to collect and writes off as a bad debt.

Charitable Devise

A gift of real property to a legal charity by will.

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

Charitable Lead Trust

A trust for a fixed term of years wherein a charity is the income beneficiary and the remainder goes to a non-charitable beneficiary.

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

Charitable Remainder Annuity Trust

A trust that provides a sum certain, not less than 5% of initial fair market value of all property placed in the trust, to be distributed at least annually to a non-charitable beneficiary, with remainder to a qualified charity.

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

Charitable Remainder Trust

An arrangement wherein the remainder interest goes to a legal charity upon the termination (or failure) of a prior interest.

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

Charitable Remainder Unitrust

A trust that provides a fixed percentage, not less than 5% of the net fair market value of property, valued annually, to be distributed at least annually to a non-charitable beneficiary, with remainder to a qualified charity.

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

Chartered

Authorized by a federal or state regulatory body to conduct banking business. The banking system in the United States today functions under a dual banking system whereby a bank may be chartered under the state or federal government.

Checkcard

Also known as a debit card; a plastic card that resembles a credit card but functions like a check and through which payments for purchases or services are made electronically to the bank accounts of participating retailing establishments directly from those of card holders.

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

Co-Maker

An individual who signs a note to guarantee a loan made to another party and is jointly liable with that party for repayment.

Codicil

An amendment or supplement to a will executed with all the formalities of the will itself.

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

Collected Balance

Checking account cash balance after deducting checks drawn on other banks. Generally defined as account ledger balances, less unpaid checks in the process of collection. A bank may count a deposited check as funds available for use by its customer in two business days, but usually will not include it in the depositor's collected balance for five or six days. This allows time for the drawer bank to return the check because of insufficient funds in the check maker's account or for other reasons

Source: http://www.answers.com/topic/collected-balance#ixzz1CGzt7MaU

Commercial/Business Checking Account

A checking account designed for business concerns and organizations.

Commercial/Business Loan

Credit extended by a bank to a business.

Community Property

Property in which a husband and wife have each an undivided one-half interest by reason of their marital status; recognized in all civil law countries and in certain states (nine, including Texas).

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

Complex Trust

A trust in which the trustee is not required to distribute income currently.

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

Compounding Interest

(noun) Compounding interest is when money earns interest and then the original amount of money plus the earned interest go together to earn more interest.

Consumer Loan

A loan extended to consumers, either individually or jointly, primarily for buying goods and services.

Contingent Beneficiary

The beneficiary whose interest is conditioned upon a future occurrence, which may or may not take place. Unless or until the condition takes place, the interest is only contingent.

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

Contract

(noun) An agreement between people that is put into writing and bound by law. If one of the people that signed the contract does not hold up their end of the deal, you can take them to court with the written contract as evidence of their wrongdoing.

Cookies

A piece of data downloaded to a computer by a website, containing details of the preferences of that computer's user which identify the user when revisiting that website

Collins English Dictionary - Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003

Cost Basis

The original price or cost of an asset usually based on the purchase price, or in the case of assets received from an estate, on the appraised value of the assets as of date of death, or other fixed date.

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

Counterfeit

Any fake currency, coin, or bank card made to appear authentic.

Counterfeit bill

An imitation intended to be passed off fraudulently or deceptively as genuine; forgery.

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

Credit Life Insurance

Insurance purchased in conjunction with a loan that will automatically pay off the loan in the event of death or total disability.

Crummey Power

A limited, usually non-cumulative power of withdrawal over trust property that ordinarily lapses within a specified period of time. This power gives a trust beneficiary a present interest over property transferred to the trust.

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

Crummey Trust

A trust established granting a beneficiary a limited power to withdraw income or principal, or both. This power is exercisable during a limited period of time each year and is non-cumulative.

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

CTR

An abbreviation for “Currency Transaction Report”; a report that U.S. financial institutions are required to file for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to the financial institution which involves a transaction in currency of more than $10,000. Used in this context, currency means the coin and/or paper money of any country that is designated as legal tender by the country of issuance. Currency also includes U.S. silver certificates, U.S. notes, Federal Reserve notes and official foreign bank notes.

Source: www.wikipedia.com

CTX

An acronym for “Corporate Trade Exchange”; an entry used by a Business to transfer funds to or from an account of that business with another bank or to another business that permits the use of an Addenda Record.

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

D

Daily Valuation

A system of accounting that provides for the allocation of earnings and losses to a participant's account on a daily basis.

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

Death Benefit

The portion of a participant's accrued benefit that is payable to a named beneficiary upon the participant's death.

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

Defined Contribution Plan

A type of qualified plan in which a participant's benefits are based solely on the participant's account balance; the account balance depends on the level of employer and employee contributions and the earnings on those contributions.

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

Demand Deposit

Funds that may be withdrawn from a bank without advance notice. Checking accounts are the most common form of demand deposits.

Deposit

Any placement of cash, checks or other drafts for credit to an account. All deposits are liabilities for a bank since they must be repaid in some form at some future time.

Deposit Slip

A form used to make a deposit. The form lists items given to the bank along with a total for credit.

Direct Deposit

A plan in which salaries or other payments are transferred by the paying agency directly to the accounts of the recipients.

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

Discretionary Contributions

Any employer contributions to a 401(k) or profit sharing plan that are not mandated by the terms of the plan.

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

Dispositive Provisions

The provisions of a will or trust agreement relating to the disposition and distribution of the trust property in the estate or trust.

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

Doing Business As (DBA)

A company owned and operated by a person or persons which is doing business under a name other than their own. The owners must obtain an assumed name certificate that is registered at the County Clerk's office. The certificate lists who the owners of the business are and who may receive funds on behalf of the company.

Drawee

Maker of the check.

Drawee Bank

Bank where the maker's (drawee's) account is located.

Dual Control

A bank security procedure requiring that two members of the staff be involved in a transaction or duty, such as ATM collection.

Durable Power of Attorney

A Power of Attorney that remains effective despite the disability or incompetence of the person granting the power.

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

E

Early Withdrawal Penalty

A 10 percent penalty (in addition to ordinary income taxes owed) on money withdrawn from a tax-advantaged retirement plan before age 59 ½. The penalty does not apply in special circumstances such as death, disability, or withdrawals in the form of an annuity or payment over the recipient's (and spouse's) life expectancy.

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

Earnest Money

A sum of cash paid to a seller by a buyer prior to the closing to show that the buyer is serious about buying the house. The earnest money is deducted from the purchase price at closing and is not an additional cost. Sometimes referred to as a binder deposit.

Easement

A right of way giving persons, other than the owner, access to or over a property.

EFT

An acronym for “Electronic Funds Transfer”; the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems.

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

Elective Deferral (Contributions)

The amount of a participant's voluntary reduction in pay; otherwise known as salary deferrals. An election to defer pay must be made in advance. The employer then contributes the deferral to the 401(k) plan.

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

Electronic Funds Transfer (EFTS)

Using automated, electronic, technology to move funds without paper checks.

Endorse

1 : to write on the back of; especially : to sign one's name as payee on the back of (an instrument) in order to receive the cash or credit represented on the face < endorse a check>
2 : to inscribe (as one's signature or a notation accompanied by one's signature) on an instrument (as a note or bill) esp. to transfer or guarantee it
3 : to transfer (an instrument) to another by inscribing one's signature endorse s a note to creditor as security for a debt - Uniform Commercial Code >
4 : to inscribe (as an official document) with a notation (as of date or title)

Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.

Endorsement

A signature that is make on an instrument. The legal transfer of one's right to an instrument.

Escheat

The reversion of property to the State in case there are no devisees, legatees, heirs, or next of kin; originally applied to real property but now applies to all types of property.

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

Escrow

Funds paid by one party to another to hold until a specific date when the funds are released to a designated individual. Generally, an escrow account refers to the funds a mortgagor pays to the lender along with their principal and interest payments for the payment of real estate taxes and hazard insurance. This is also referred to as impounds. The money is held by the lender to make payments when they are due.

An escrow can also refer to funds that are held by a third party to ensure the completion of repairs or improvements that must be completed on the property but that cannot be done prior to closing.

Escrow Account

The account that funds are held in by the lender for the payment of real estate taxes and/or homeowner's insurance. Can also refer to the account that funds are held in for the completion of repairs or improvements to a property that cannot be completed prior to closing.

Escrow Analysis

A periodic review of escrow accounts to determine if current monthly deposits balances will provide sufficient funds to pay property taxes, hazard insurance and other bills when they come due.

Escrow Payment

The portion of a borrower’s monthly mortgage payment that is held by the loan servicing company to pay for property taxes, hazard insurance, mortgage insurance and other items as they become due.

Estate

The nature and extent of interest that an individual has in real property (degree of ownership). Also, the combined total of all real and personal property owned by an individual at the time of their death.

Eviction

The legal expulsion of an occupant from real property. Usually exercised by a lessor against a lessee to recover possession of property.

Executor

The individual or corporation named in the will to take over and complete the administration of an estate.

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

Existing Home Sales

Reports the number of existing homes sold, expressed on an annual basis. Can be combined with New Home Sales to determine the total volume of home sales, a strong indicator of future national mortgage origination volume. Frequency: monthly. Source: National Association of Realtors.

 
 

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