ACH Processing (ACH - Automated Clearing House) - Processing
that occurs between a national network of banks or financial
institutions that send messages electronically, via
telecommunications lines instead of paper (checks), to transfer
funds between two parties. The most common form of ACH
transactions are direct deposit and pre-authorized debits.
Annual Percentage Rate (APR) - The relationship of the total
finance charges associated with a loan. This must be disclosed
to borrowers by lenders under the Truth-in-Lending Act. It is a
function of the loan amount, the interest rate, the total added
cost, and the terms. The APR would equal the interest rate if
there is no additional cost to a given loan.
Annual Percentage Yield (APY) - Reflects the total amount of
interest paid on a deposit account, based on the interest rate
and the frequency of compounding for a 365-day period.
Automated Teller Machine (ATM) - A machine that allows a
customer to perform common teller transactions. Transactions may
include cash withdrawals, deposits and transfers. ATMs are
generally accessible 24 hours a day, 7 days a week.
Average Daily Balance - The average dollar amount that resides
in an account over a specific period of time. The formula for
calculating the Average Daily Balance is accomplished by adding
the daily balances over a period of time and dividing by the
total number of days in that period.
Bank Draft - A check drawn by one bank against funds deposited
into its account at another bank, authorizing the second bank to
make payment to the individual named in the draft.
Cashier's Check - A check drawn by a bank on itself, signed by
the Cashier or other authorized bank officer and payable to a
third party named by the customer. Cashier's Checks are
Certificate of Deposit (CD) - A type of deposit account with a
minimum initial deposit and fixed term (months until maturity).The current rate will dictate how interest is earned
for the term. Usually, interest payments may be added back to
the CD or payable by check or deposited to another checking or
savings account at the depositorís institution. Most CD's
automatically renew at the end of a term at the current rate at
the time of renewal.
Checking Account - An account which allows the account owner to
write checks against the account on deposited funds.
Compound Interest - Accrued interest when earnings for a
specific period are added to principle. Interest for the
following period is computed on the principle plus accumulated
Daily Compounding - An interest calculation in which interest is
added to the principle each day. Interest is then earned on the
Debit Card - A plastic card with either the Master Card or VISA
logo, designed to give a customer access to funds in his/her
checking account to obtain cash or purchase goods and services.
The cards are accepted around the world wherever you see the
Master Card or VISA logo. Henderson Federal Savings Bank issues
a Visa debit card.
Direct Deposit - Automatically deposited funds to checking or
savings accounts via a pre-authorized system. Customer
government benefits or other payments are automatically
deposited to their checking or savings accounts. Some types of
Direct Deposits are Social Security, SSI, VA benefits,
annuities, pension benefits, payroll checks and dividend checks.
Educational IRA- The Coverdall Education Savings Account (CESA)
is a nondeductible account that features tax-free earnings and
withdrawals if used for a childís qualified education expenses.
Consult your tax professional for further information regarding
state or federal income taxes.
Electronic Funds Transfer - Any transfer of funds that are
implemented by electronic means. Examples of electronic funds
transfer means include: electronic terminal, telephone,
computer, ATM or magnetic tape.
FDIC (Federal Deposit Insurance Corporation) - Insures
depositors up to $250,000 in most United States banks and
savings associations (also called savings and loan associations
or S&Ls). Arranges a resolution for each failing institution -
one that is the least-costly to the insurance fund and, when
possible, the least disruptive for customers. Promotes the
safety and soundness of insured depository institutions and the
U.S. financial system by identifying, monitoring and addressing
risks to the deposit insurance funds. The FDIC also is the
primary federal regulator of about 6,000 state-chartered
"nonmember" banks (commercial and savings banks that are not
members of the Federal Reserve System).
Funds Availability - The dollar amount or time period represented
by checks that have been deposited but have not cleared.
Grace Period - A period of time during which a depositor can
withdraw funds from a certificate without being penalized.
Inactive Account - Transactions have not occurred on a bank
account for an extended period of time.
Individual Retirement Accounts (IRA) - Henderson Federal Savings
Bank offers for eligible individuals, the Traditional IRA, Roth
IRA, and Educational IRA.
Money Market Deposit Account - A deposit account offered by
banks and financial institutions directly equivalent to, and
competitive with, money market mutual funds.
Multiple Party Account - Account owned by two or more parties.
Parties own the account during the lifetime of all parties in
proportion to their net contributions, unless there is clear and
convincing evidence of a different intent.
Online Banking - Personal and business account information
accessible through a personal computer and the Internet.
Online Bill Pay - Bill payment is available online and allows
you to make payments to several different vendors. Paper checks
are issued when ACH payments are not available through bill
Overdraft - The amount by which withdrawals exceed deposits.
Personal Identification Number (PIN) - An account holder has a
secret number or code to authorize a transaction or obtain
information regarding his or her account. Often used in
conjunction with a plastic card (ATM or Debit card), online
account access or with a telephone voice response system.
Point of Purchase (POP) Ė Single entry debit to a consumer
account for the in-person payment of goods or services. The
consumerís source document (i.e., the check) is used to collect
the consumerís routing number, account number, and check serial
number for the payment, which is authorized, in writing, by the
consumer at the time of purchase.
Point of Sale (POS) Ė Single entry debit to a consumer account
for the in-person payment of goods or services. The consumerís
debit card is used to authorize payment at the time of purchase.
Roth IRA - Contributions are not deductible but distributions
can generally be withdrawn tax free.
Savings Account - A deposit account with no legal limits or
requirements as to amount, duration, or times of additions.
Savings accounts do not come with checks but do include ATM
cards for cash withdrawals.
Signature Card - A contractual form, executed by an account
holder, establishing account ownership and setting forth some of
the basic terms of the account and provisions of the deposit
Stop Payment - A request to a bank not to honor or allow the
payment of a check after it has been delivered but before it has
Tax Identification Number (TIN) - The number used to identify an
individual or business for federal income tax purposes. This
would be an individual's Social Security number (SSN).
Tiered Interest Rate - An interest rate structure that allows
for increased interest based on a higher tiered rate and
increased account balance for that rate.
Traditional IRA - Contributions may be partially or fully
deductible, but distributions are generally taxable.
Uncollected Funds - Funds that have been deposited in an account
or cashed against an account by a check that has not yet been
cleared through the check collection process and paid by the drawee bank. Temporary holds are sometimes placed on their
customer's uncollected funds. Funds are unavailable for
withdrawal until the time period the hold expires.
Wire Transfer - An electronic transfer of funds from one
financial institution to another. Wire Transfers require the
routing transit number, dollar amount, account number and name
of the account owner(s).