Glossary of Terms

Automated clearing house (ACH)
 A computer-based interchange for clearing deposits and payments electronically.

Annual percentage yield (APY)
 The amount of interest earned on a deposit account (checking and money market) including the effect of interest compounding, assuming funds remain in the account for one year.

Average daily balance
 The average amount in a deposit account that equals the sum of the daily balances during an accounting period, usually a month, divided by the number of days in the period. Can sometimes be used to avoid service charges or to qualify for special services. See also, minimum daily balance.

Compounding
 Interest added to interest previously earned on a principal balance. The more frequently interest is compounded, the higher the effective yield.

Interest rate
 The rate paid on an interest-bearing account, such as savings, CDs and some checking accounts; also, the rate charged on a loan or line of credit. Different types of accounts and loans pay or charge different rates of interest.

Money market account (MMA)
 An interest-bearing checking account with limited check-writing privileges, typically three per month.

NSF (nonsufficient or insufficient funds)
 A situation in which a check (or other type of withdrawal) may not be paid because the balance in the account is less than the amount of the check. See also, overdrafts.

Overdrafts
 When the amount of a paid check or other withdrawal exceeds the available balance in a checking account. See also, NSF and overdraft protection.

Overdraft protection
 A service that allows a checking or money market savings account to be linked to another account that provides protection against returned items or overdrafts. Choices can include using a savings account or a line of credit account to provide protection.

Transaction limitations
 Refers to a Federal Reserve regulation that limits certain types of withdrawals from savings and money market savings accounts. There can be no more than six automatic, wire or telephone transfers out of the account each month; of the six, if applicable, no more than three can be by check, draft, debit card or similar payment order to a third party. Withdrawals at ATMs and teller windows from these accounts are unlimited.

Uncollected funds
 Refers to items deposited in an account that have not yet been collected, or paid, by the bank on which they were drawn.

Wire transfer
 An electronic payment service for transferring funds by wire (for example, through the Federal Reserve Wire Network (Fedwire) or the Clearing House Interbank Payments System).

Central Bank of Georgia
P.O. Box 45
4059 South Broad Street
Ellaville , Georgia 31806
Phone: 229-937-2507

      
Copyright© 2003 Central Bank of Georgia, Member FDIC.