10 must-know checking account terms
a lot more to checking than balancing your checkbook, and many people
have trouble even doing that. If you want to be organized and informed,
you need to learn the lingo of the checking world. We've picked
the top 10 checking account terms to help get you started.
-- Fee charged for a non-account holder to use a bank-owned ATM.
Example: You have an account at Bank A but use Bank B's ATM. Bank
B will charge you a surcharge. Make sure to review what your bank
charges you to use another bank's ATM system. You may have to pay
a surcharge to Bank B plus a non-bank owned ATM charge to Bank A.
Debit card -- A
payment card that is linked directly to a customer's bank account.
Both PIN-based transactions and signature transactions remove a
purchase price from a customer's checking account almost immediately.
Electronic funds transfer
-- The transfer of money between accounts by consumer electronic
systems, such as automated teller machines (ATMs) and electronic
payment of bills.
Interest checking account
-- Liquid account, providing FDIC insurance to $100,000 per person,
that permits unlimited check-writing and typically pays interest.
Lifeline account -- A
no-frills account for low-income customers, which is mandated by
law in some states. These accounts are typically checking and savings
products that have little or no monthly fees, require little if
any minimum deposit and balance, and allot a set number of checks
Money market account
-- A bank account that restricts the type and number of certain
withdrawals and earns interest similar to that paid by money market
Negotiable Order of Withdrawal
account -- Liquid account, providing FDIC insurance to $100,000
per person, that permits unlimited check-writing and typically pays
interest. Also known as a NOW account.
Overdraft -- The amount
that a check exceeds the available balance in the payor's account;
also insufficient funds.
Returned or "bounced"
check charge -- Also referred to as an NSF or non-sufficient
funds fee. The amount of money charged to an account holder whose
account has insufficient funds available to pay the check, which
is returned to the party who cashed it unpaid.
-- Fees charged to customers for specific services or as a penalty
for not meeting certain requirements, such as insufficient funds
in a checking account.
For a complete list of checking terms, check
out our glossary.
-- Updated: April 9, 2003