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Glossary of Banking Terms

A
Account Balance

The amount of money in an account at the start of the business day, including all deposits and withdrawals posted the previous night, whether or not the funds have been collected. See collected balancecollected balance.

Account Statement

A printed or online statement of all the funds paid out by or paid into your account during a statement cycle.

Active Account

An open bank account in which transactions can be made; usually an account that has had activity within the last 3 years.

Affinity debit card

A debit card issued in affiliation with a participating organization (for example, a charity or sports team). Affinity debit cards have all the same benefits as standard Bank of America debit cards and are available with eligible checking accounts.

Annual percentage yield (APY)

The total amount of interest paid by the bank on your deposit account (checkingchecking, savings, CDs, IRAs) during the year. Includes both interest paid on the amount held in the account, as well as compounded interest for the year.

Automated Clearing House (ACH)

A nationwide funds transfer network that enables participating financial institutions to electronically credit, debit and settle entries to bank accounts.

Automatic funds transfer

An arrangement that automatically moves funds from your account to another on a date you choose; for example, every payday.

Automatic payment

An arrangement that automatically deducts funds from your account (usually a checking accountchecking account ) on the day you choose in order to pay a recurring bill (such as car, insurance, mortgage payments, etc.).

Available Balance

The amount of money in your account that is available for immediate use.

Average Daily Balance

he sum of all the daily account balances during an accounting period (usually a monthly statement cycle), divided by the number of days in the same period. May be used to determine whether a service charge applies or whether your account qualifies for special services or discounts. See minimum daily balanceminimum daily balance.

B
Banking center

A Bank of America branch office. There are more than 5,700 Bank of America banking center locationsbanking center locations.

Bill Pay

An optional service from Bank of America that lets you pay your bills online.

Bounced Check

A check that is returned to the depositor because there are not sufficient funds to pay the amount of the check.

C
Canceled Check

A check that has been paid. A canceled check is usually acceptable as legal proof of payment.

Bill Pay

An optional service from Bank of America that lets you pay your bills online.

Cashed Item Returned Fee

See Deposited Item Returned FeeDeposited Item Returned Fee.

Cashier’s check

A check issued by a bank and paid from its funds. A cashier's check will not usually bounce because the amount it is written for is paid to the bank when it is issued, and the bank then assumes the obligation.

Certificate of Deposit

A time deposit that is payable at the end of a specified amount of time or term. CDs generally pay a fixed rate of interest and, depending on the market rate environment, can offer a higher interest rate than other types of deposit accounts. Terms can range from 7 days to 10 years. CDs are insured by the FDIC up to applicable limits. If early withdrawal from the CD prior to the end of the term is permitted, a penalty is usually assessed. See Federal Deposit Insurance CorporationFederal Deposit Insurance Corporation.

Cashed Item Returned Fee

See Deposited Item Returned FeeDeposited Item Returned Fee.

Certified Check

A check for which the bank guarantees payment.

Checking Account

A type of deposit account that enables customers to deposit funds and withdraw available funds on demand, typically by writing a check or using a debit card. These accounts are sometimes interest-bearing.

Check card

See Debit CardDebit Card.

Check image

A service that provides images of canceled checks. Each account statement includes images of checks (up to 10 per page) that posted to the account during the statement cycle. You can view and print copies of the front and back of checks posted within the last 12 months by signing on to Online Banking. You can also request copies of checks by visiting your nearest Bank of America banking center, or by calling the customer service number on your statement.

Check safekeeping

A service where the bank keeps copies or digital images of all checks written against your account for 7 years, instead of returning them with account statements. You can view photocopies of canceled checks posted within the last 12 months by signing in to Online Banking or visiting your nearest Bank of America banking center.

Collected balance

The balance in a deposit account, not including items that have not yet been paid or collected. See Account balanceAccount balance.

Combined balance

The total funds in all of your linked accounts, such as savings, checking and CDs. For some checking accounts, the combined balance determines whether you may avoid the monthly fee.

Compound interest

Interest that is calculated on both the accumulated interest and the principal balance in the account. The more frequently interest is compounded, the higher the effective yield.

Credit

The increase in a deposit account balance that occurs when a deposit is made to the account. See also Debit CardDebit Card.

Credit card

A plastic card issued to an individual that allows that person to use credit to purchase goods and services. A credit limit is established for each card holder.

Custodial account

An account created for the benefit of a minor (a person under the age of 18 or 21 depending on state law) with an adult as the account's custodian.

D
Debit

A decrease in a deposit account's balance, such as occurs when a check posted to the account. See also CreditCredit.

Debit card

A plastic card that deducts money directly from the designated Bank of America checking account to pay for goods or services. It can be used anywhere Visa® or MasterCard® debit cards are accepted and no interest is charged. A debit card can also be used at ATMs to withdraw cash.

Deposit

Money added into a customer's bank account.

Deposited Item Returned Fee (or Cashed Item Returned Fee)

A fee we charge each time a check or other item that we either cashed for you or accepted for deposit to your account is returned to us unpaid.

Digital wallet

You can use the credit and debit cards stored in your digital wallet to make purchases at participating merchants.

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Direct deposit

A service that automatically transfers recurring deposits into your checking, savings or money market account. Deposits can include salary, pension, Social Security and Supplemental Security Income (SSI) benefits, or other regular monthly income.

Disclosure

Information about an account's services, fees and regulatory requirements.

E
Electronic funds transfer (EFT)

Any transfer of funds initiated by electronic means from an electronic terminal, telephone, computer, ATM or magnetic tape.

Emergency cash

A service provided by Visa to Bank of America personal debit card customers. In the case of emergency (theft, etc.) replacement cash can be delivered to you directly or to a convenient location anywhere in the world, 24 hours a day, 365 days a year.

EMV/Chip Card

An EMV or chip card is a standard card that contains an embedded microchip as well as a traditional magnetic stripe. The chip encrypts information to increase data security when making transactions at terminals or ATMs that are chip-enabled.

Extended Overdrawn balance charge (EOBC)

If your account had a negative balance for 5 or more consecutive business days, you would have received an additional Extended Overdrawn Balance Charge of $35 on the sixth day. This fee was in addition to any applicable fees for overdraft items, insufficient funds and returned items.

F
Federal Deposit Insurance Corporation (FDIC)

The FDIC is an independent agency of the United States government that protects people who have funds on deposit with FDIC-insured banks and savings associations against the loss of their insured deposits if their bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
The FDIC guarantees deposit accounts (checking, savings, money market savings and CDs) up to applicable limits, which is $250,000 per depositor, per insured bank, for each account ownership category.

Float

The time between the date when a check is deposited to an account and the date the funds become available.

I
Inactive account

A bank account in which there have not been any transactions for an extended period of time. In some cases, when there has been no activity in the account within a period specified by state law (generally at least 3 years), the law requires the bank to turn the account over to the state as unclaimed property.

Interest-bearing account

An account that earns interest.

Interest rate

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

IRA

An Individual Retirement Account (IRA) is an account that provides either a tax-deferred or tax-free way for you to save for retirement. There are many different types of IRAs but Roth, Traditional and Rollover IRAs are the most common. Within an IRA, some people invest in mutual funds or stocks, while others may choose bank products such as CDs and money market savings accounts. Each IRA has certain eligibility requirements and unique features.

J
Joint account

An account owned by 2 or more people.

L
Linked account

Any account linked to another account at the same financial institution so that funds can be transferred electronically between accounts. In some cases, the combined balance of all linked accounts may determine whether monthly service and other fees are applied to the account.

M
Maturity date

The date that a CD term ends, the bank stops paying the agreed-upon interest and you can choose to take the money deposited or renew the term.

Minimum daily balance

The lowest end-of-day balance in an account during a statement cycle; a certain minimum daily balance is often required with interest-bearing accounts to avoid a service charge or qualify for special services. See Average Daily BalanceAverage Daily Balance.

Money Wallet

A mobile wallet, which is a type of digital wallet, stores your physical credit and debit cards in your mobile device as virtual cards, allowing you to make purchases at participating merchants.
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Money Order

A financial instrument, issued by a bank or other institution, allowing the individual named on the order to receive a specified amount of cash on demand. Often used by people who do not have checking accounts.

Monthly maintenance fee

The fee charged to maintain a particular account, such as a checking or savings account. Bank of America offers many options to help avoid the monthly maintenance fees on checking and savingssavings accounts.

N
Non-bank ATM

An ATM or cash machine that provides ATM cardholders with access to their accounts, but is owned and operated by an independent bank or financial institution. Fees generally apply to cash withdrawals at non-bank ATMs and they don't generally accept deposits.

O
Online Banking

A service that allows an account holder to obtain account information and manage certain banking transactions via personal computer or mobile device.

Original interest rate

Rate assigned when you open a CD account. The original interest rate is listed on your CD account receipt and statement.

Overdraft

An overdraft occurs when a bank makes a payment that has been requested (such as a check), even though there are not enough funds available in the account to cover it. This type of payment is known as an "overdraft" and the account is said to have been "overdrawn." See also Overdraft protectionOverdraft protection.

Overdraft Item and NSF: Returned Item

An overdraft item is when you do not have enough available funds in your account to cover an item and we authorize and pay the item and overdraw your account. An NSF:Returned item is when we decline and return the item unpaid. See your Deposit Agreement and DisclosuresDeposit Agreement and Disclosures and Personal Schedule of FeesPersonal Schedule of Fees for additional information.

Overdraft protection

Overdraft Protection links your Bank of America checking account to another Bank of America account-such as savings, credit card, second checking account, or line of credit-and automatically transfers available funds to cover purchases, prevent returned checks and declined items when you don't have enough money in your checking account. You can apply for Overdraft Protection by visiting a banking center or calling us at 1.800.432.1000 between Monday-Friday 7a.m.-10 p.m. and Saturday-Sunday 8a.m.-5 p.m. ET.

Overdraft Protection Transfer Fee

An Overdraft Protection Transfer fee occurs whenever funds must be provided to cover a transaction that overdraws your checking account. When a debit clears that exceeds the funds available in your account, money will be transferred from the linked Overdraft Protection account.

Overdraft Settings

The overdraft setting for your checking account determines how the bank handles your transactions when you don’t have enough money in your checking account or your eligible linked Overdraft Protection account at the time of the transaction. We pay overdrafts at our discretion based on factors such as the purchase or withdrawal amount and your account history, which means we don’t guarantee that we’ll always authorize and pay any type of transaction. We typically don’t pay overdrafts if your account isn’t in good standing or you aren’t making regular deposits. We reserve the right to require you to pay overdrafts immediately. See your Deposit Agreement and DisclosuresDeposit Agreement and Disclosures for additional information.

P
Personal identification number (PIN)

The unique number you must use to access your account at an ATM or make a purchase with a debit card. Your ATM number should always be kept confidential.

R
Rate

See Interest RateInterest Rate.

Regulation E

Regulation E carries out the purposes of the Electronic Funds Transfer Act, which establishes the basic rights, liabilities and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. The primary objective of the Act and Regulation E is the protection of individual consumers engaging in electronic fund transfers.Electronic fund transfer systems include automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and preauthorized transfers from or to a consumer's account (such as direct deposit and Social Security payments). The term "electronic funds transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's account.

Returned item

When you do not have enough available funds in your account to cover an item and we decline to pay and return the item unpaid, we will charge a NSF:Returned Item Fee for each returned item. View your Deposit Agreement and DisclosuresDeposit Agreement and Disclosures and Personal Schedule of FeesPersonal Schedule of Fees for additional information.

S
Savings account

A deposit account that generally earns higher interest than a checking account and limits you to no more than a total of 6 automatic or preauthorized transfers, telephone transfers or payments (including check, draft and point-of-sale transactions, if checks or debit cards are allowed on the account) from a savings account each monthly statement cycle.

Simple interest

The interest calculated only on the principal funds that have been deposited in the account; no interest is earned on interest that has already been earned on the principal.

Standard Setting

The Standard Overdraft Setting is automatically applied to new consumer accounts (excluding SafeBalance Banking® accounts, which are automatically set to the Decline All setting).

With the Standard Setting:

ATM withdrawals and everyday, non-recurring debit card transactions (individual debit card purchases such as at the grocery store or a one-time online purchase), will only be authorized when we determine you have enough available funds in your eligible account or in your eligible linked Overdraft Protection account at the time of the transaction. Otherwise, we typically decline the transaction and we do not charge an Overdraft Item fee.

For other types of transactions, such as checks, Bill Pay and other electronic payments, as well as recurring debit card payments we may pay transactions when you don't have enough available funds in your checking account or linked Overdraft Protection account at the time of the transaction.

If we pay a transaction that's larger than your available balance and it overdraws your account, this typically results in a charge for each overdraft item, unless you deposit enough available funds that day to cover the overdraft.

If we return the item unpaid, this typically results in a NSF: Returned item fee.

Stop payment

A request that the bank not pay a check or payment you have written or authorized. Stop-payment orders are generally placed for checks that have been lost or stolen or in situations where a purchase is disputed. A stop payment order generally expires after 6 months and a fee is usually charged for this service.

T
Time deposit or CD

An agreement to deposit a stated amount in the bank for a fixed length of time during which a fixed rate of interest will be paid. Penalties are assessed if the funds are withdrawn before the end of the agreed-upon period. See Certificate of DepositCertificate of Deposit.

Transaction limitations

Refers to a Federal Reserve Board regulation that limits certain types of withdrawals and/or transfers you can make from your savings and/or money market deposit accounts. With such accounts, no more than 6 preauthorized or automatic transfers (including check, draft and point-of-sale transactions, if checks or debit cards are allowed on the account) or telephone/PC transfers (including bill payments) may be made each month. While an unlimited number of withdrawals may be made at ATMs and teller windows, fees may apply. Please view your Deposit Agreement and DisclosuresDeposit Agreement and Disclosures and Personal Schedule of FeesPersonal Schedule of Fees for additional information.

Transfer

The movement of funds from one account to another.

Travelers cheque/travelers check

Check issued by a financial institution that functions as cash, but is protected against loss or theft. Useful when traveling.

U
Uncollected funds

Refers to items deposited in an account that have not yet been collected (paid) by the bank on which they were drawn.

V
Variable rate

An interest rate that may fluctuate (adjust) during the term of a loan, line of credit, or deposit account. Rates may adjust due to changes in an index rate (such as the prime rate); in some situations, the bank may set its own rate.

Virtual card

A virtual card is the digital form of your physical credit card and has a unique card number that's stored within a digital wallet.
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W
Wire transfer

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

Withdrawal

The removal of funds from an account.

Z
Zero Liability Protection*

The guarantee Bank of America makes to its credit and debit cardholders: if your card is lost or stolen, and you report the loss promptly, you may not be responsible for fraudulent purchases made with your card. There is no charge for the Zero Liability Protection program and it is automatically available on all Bank of America consumer credit cards, debit cards, and Home Equity line of credit access cards.

Claims may only be filed against posted and settled transactions subject to dollar limits and subsequent verification, including providing all requested information supporting fraudulent use claim. For debit card transactions, claims must be reported within 60 days of the statement.

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