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| GLOSSARY
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Understanding Banking
Terminology
Not familiar with some of the jargon used in the banking industry?
We're here to help. Below is a list of commonly used banking terms
and their definitions. If you have any further questions, please contact
one of our helpful banking specialists toll free at 1-888-RING-CSB
(1-888-746-4272)
or call 341-9900 from Hilton Head
.
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, pre-authorized debits,
cash concentration, and corporate to corporate payments.
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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 and transfers. ATMs are
generally accessible 24 hours a day, 7 days a week. (Deposits to
CoastalStates Bank accounts are accepted only at CoastalStates ATMs.)
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.
Cashiers 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 universally accepted.
Certified Check - A bank guarantees payment on this type of check.
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
to the CD, payable by check or deposited to another checking or savings account
at the depositor's 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.
Check Safekeeping - The process of digitizing customer's paid checks. The digital
image becomes the official record of the transaction and is kept by the financial
institution. Canceled checks are stored electronically rather than being returned
to the customer.
Compound Interest - Accrued interest when earnings for a specific period are
added to principal. Interest for the following period is computed on the principal
plus accumulated interest.
CSBankLink - Cash management service for business accounts accessible through
a personal computer and the Internet.
CSBillPay - Bill payment is available online and allows you to make payments
to vendors. Paper checks are issued when ACH payments are not available through
bill payment.
CSOnLine - Personal and business account information accessible through a personal
computer and the Internet.
CSTeleBanc - Personal account information accessible via telephone by calling
toll-free 1-877-527-2704.
Daily Compounding - An interest calculation in which interest is added to the
principal each day. Interest is then earned on the new balance.
Debit Card - A plastic card with either the MasterCard 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 MasterCard or Visa logo. CoastalStates 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.
Electronic Funds Transfer - Any transfer of funds that is 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 $100,000
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) - An account that allows you to earn
high interest rates on your investment while sheltering your earnings from
taxes.
CoastalStates Bank offers three types of IRAs-Traditional, Roth and Education.
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.
Overdraft - The amount by which withdrawals exceed deposits.
Overdraft Protection - A service that allows the customer to write checks
for an amount over and above the amount in their checking account. Funds
are transferred
from their line of credit or other designated account to their checking account
as needed. This service must be applied for and approved.
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.
Roth IRA - An Individual Retirement Account in which 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 contract.
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 been presented.
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 - An Individual Retirement Account in which 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).
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