Frequently Used Financial Terms

Click on a letter to browse our glossary of terms or to find the specific term you are looking for.

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Account History
A log of current and previous debit and credit transactions (pending and cleared) on an account for a given time period.

Account Statement
A record of all the debit and credit transactions on an account for a given statement cycle.

A service offered by most financial institutions (at Bank of the West the service is offered in Online Banking) that notifies customers typically via email or text message when certain conditions (such as low balances, payment dates, deposits, etc.) are present on an account.

Annual Percentage Yield (APY)
A term from the Federal Regulation DD which means: a percentage rate reflecting the total amount of interest paid on an account, based on the interest rate and the frequency of compounding for a 365-day period and calculated according to the rules set forth in the Regulation.

Automatic Transfers
A service in which funds are automatically moved from one account to another, based on a schedule either agreed upon by a customer or set up by a customer. The transfer may be affected by whether sufficient funds are available for the transfer.

Automatic Payment
A service in which payments are automatically withdrawn and sent from a bank account to selected payees, based on a pre-determined schedule either agreed upon by a customer or set up by a customer. The payment may be affected by whether sufficient funds are available for the payment.

Available Balance
The amount of money in an account that is available for withdrawal at a given time. The customer must keep in mind that some transactions may take longer to process, and therefore may not be reflected in the available balance for several days. Any outstanding checks and some Debit Card purchases may not be immediately reflected in your available balance.

The most accurate record of your account balance is your own payment register. Any balance information provided by Bank of the West, whether in a document, online, by telephone, or in person, will not reflect un-posted payments.

Average Daily Balance
The daily ending balance divided by the number of days in the statement cycle.

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Bill Pay
A service offered by most financial institutions (at Bank of the West the service is included within Online Banking), which permits customers to pay all or most of their creditors through an electronic service. Typically, the Bill Pay service permits customers to set up single payments or recurring payments (Bank of the West’s Bill Pay service permits payments to be set up one year in advance of the due date). Bill Pay can make managing finances and paying bills more convenient.

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Certificate of Deposit
A Certificate of Deposit (CD) is a deposit account under which the depositor agrees to keep balances on deposit for a specified length of time and the financial institution agrees to pay an interest rate for the term. Money withdrawn before the CD matures generally is subject to an early withdrawal penalty fee.

A written request to a bank to pay a specific person or entity a specified amount of funds from a deposit account.

Checking Account
A bank account that permits authorized signers to make withdrawals by check. Checking Accounts are the type of deposit account that most people use for their everyday transactions by check or Debit Card. Checking Accounts generally do not have limits on the numbers of deposits or withdrawals that can be made from them.

Cleared Transactions
Transactions that have been processed through your account are shown as "cleared" or "paid." However, some cleared transactions are not final and can be reversed.

These are also referred to as Posted Transactions.

Compound Interest
When interest is paid not only on your deposits, but also on interest previously earned on your account. Compare Simple Interest.

An increase to the ledger balance of an account.

Credit Card
A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating.

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A decrease to the ledger balance of an account.

Debit Card
A card which can be used for withdrawing cash and/or purchasing goods and services. Debit Cards access a cardholder's deposit account - either a checking or money market account.

Debit Card Overdraft
The term used to describe the event in which a Debit Card purchase or other Debit Card transaction is performed even though the available balance of that account is less than the amount of the purchase. Typically, an overdraft fee will apply.

An increase to the ledger balance of an account by adding funds into the account.

Direct Deposit
A service that automatically deposits recurring income (such as a paycheck, social security, pension or retirement plans) into a customer-designated checking or savings account.

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Electronic Funds Transfer (EFT)
A transfer that is done through an electronic terminal, telephone or computer, such as online transactions and ATM withdrawals.

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Federal Deposit Insurance Corporation ("FDIC")
An independent agency of the United States government that protects customers from loss of deposit balances if an FDIC insured financial institution fails. The FDIC insures checking, savings and certificates of deposit up to the maximum amount set from time to time for account types and customer ownership.

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A charge for borrowing money based on a percentage of the amount borrowed, or an amount of funds paid on funds on deposit with a financial institution.

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Joint Account
A bank account owned by two or more people who are equally responsible for the account.

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Linked Account
An account or service that is connected to another account or service.

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Minimum Balance
The amount of money required by a financial institution to open and maintain an account, or to avoid a service charge.

Mobile Banking
A service offered by many financial institutions (at Bank of the West the service is offered through Online Banking), under which customers can access deposit or other types of accounts through a mobile device, such as a cellphone. Typically, mobile banking permits the user to transfer funds between accounts, monitor ledger and available balances, and receive alerts.

Money Market Account
A deposit account that that pays interest but is often accessible by check and Debit Card. Typically, withdrawals are limited. See Transaction Limitations to learn more.

Money Order
A written request ordering a payment for a specific amount of money to an individual or business.

Monthly Service Charge
A monthly charge to maintain an account. Monthly service charges are often waived if a customer achieves or exceeds certain qualifications.

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Non-Bank of the West ATM
An ATM that is not owned by Bank of the West network. Customers may use a Non-Bank of the West ATM provided the ATM can be accessed through one of the networks listed on the Bank of the West ATM card but fees may apply – typically, Bank of the West fees and fees by the ATM owner.

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Online Banking
Online Banking is a service that permits customers to access their deposit accounts through the Internet or through Financial Management Software link. Online Banking services typically permit viewing of account ledger and available balances; Bill Pay; Mobile Banking; and transfers between accessible accounts.

Online Statements
An electronic record of Account Statements typically available through Online Banking.

A term used to indicate when an item such as a check, Debit Card purchase or other transaction or item presented for payment is paid even though the available balance in the deposit account is less than the amount of the transaction or item. The payment of the transaction(s) or item(s) causes the Available Balance in an account to become negative. Typically, an Overdraft Fee will apply.

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Pending Transaction
Transactions that are reflected in your account's available balance but have not yet cleared your account. These items will usually clear your account within one to three business days, depending on the type of transaction. At Bank of the West, the following transactions will be reflected in the amount of your available balance. However, this list is not inclusive.

  • ATM deposits (The first $100 of ATM deposits will be included the same day in your available balance; we will add the remaining funds as we process items and add or remove any holds.)
  • ATM withdrawals
  • ATM or Debit Card purchases
  • Direct deposits
  • Bill Pay payments

Personal Identification Number (PIN)
A numerical password used to access an account. Typically, a PIN is used together with a Debit Card to make purchases or at an ATM to conduct withdrawals or make transfers.

A money transfer service offered by Bank of the West through Online Banking. Popmoney is a service that lets Online Banking customers (consumers only) send and receive funds via email or text.

Point-Of-Sale (POS)
A transaction between a buyer and seller with an ATM or Debit Card at a specific location - store, telephone or online.

Posted Transaction
See Cleared Transaction.

Processing Transaction
Any deposits, transfers, purchases and withdrawals which have been added to or deducted from your Available Balance, but have not yet cleared. See Pending Transaction.

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Returned Item
The term used to describe the event of a returned check or other declined transaction because the amount of the purchase is more than the available balance in an account. At Bank of the West this is a Returned Item and the fee is a Returned Item Fee.

Routing Number
The number listed on the bottom left hand corner of a check. The routing number identifies the financial institution either issuing the payment or on which the payment is drawn.

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Savings Account
A type of deposit account on which a financial institution typically pays interest. By law, there are limits on withdrawals. See Transaction Limitations to learn more.

Simple Interest
Interest that is paid on the original principal amount and not on accrued but unpaid interest.

Stop Payment Order
An order to to a financial institution not to honor a specific payment.

Statement Cycle
The period in which the activity of an account is reported and made available to the account holder.

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Time Account, Time Deposit or CD
See Certificate of Deposit.

Transaction Limitations
Federal regulations limit the types and amounts of withdrawals and transfers from savings and money market accounts to no more than six (6) preauthorized transfers or withdrawals per applicable period – either calendar month or statement cycle.

A movement of funds from one account to another. Bank of the West generally allows transfers to be completed in branch, through the telephone, online and through the use of a mobile device.

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Variable Rate
An interest rate that can change over time, as disclosed, on a deposit or loan account.

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Wire Transfer
A money transfer service that allows customers to send funds electronically – generally a wire transfer is permitted anywhere in the U.S. and almost anywhere internationally. Wire transfers can be received into most deposit accounts.

The removal of funds from a deposit account.

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The definitions provided are not the "legal" definitions but are intended to provide laypersons with simple to understand meanings of financial terms.

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