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Checking and Savings Glossary

A - C | D - L | M - R | S - Z

A – C

Annual Percentage Yield (APY)

A percentage rate that reflects the total amount of interest paid on a deposit account (e.g., checking, savings, CD or IRA). It is based on the interest rate earned on your account and the frequency of compounding for a 365-day period.

Automated Clearing House (ACH)

A nationwide electronic funds transfer system that provides for inter-bank clearing of electronic transactions (i.e., money is moved electronically between banks). Some examples of ACH transactions are Direct Deposit of payroll, Social Security and tax refunds, and direct payment of mortgages and utility bills.

Available Balance

This is the most current record we have about the money that is available for your use or withdrawal from your account. It includes all deposits and withdrawals that have been posted to your account and it is adjusted throughout the day with your account’s pending transactions that are authorized or known to the bank. If a hold was placed on a recently posted deposit, generally $200 of the deposit will be available for your use, with the remaining funds available when the hold is removed.

Average Daily Balance

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

Bill Pay

An online banking service that offers the convenience and control of managing and paying bills online. With Wells Fargo ® Online Bill Pay, you can pay any company or individual in the U.S., schedule one-time, recurring payments and choose to receive electronic bills from selected billers.

Bounced Check

See Returned Item.

Business Day

Every day is a business day except Saturday, Sunday, and federal holidays.

Canceled Check

A check that the bank has paid against money or funds in your account.

Cashier's Check

A check drawn on and issued by the bank. A cashier's check can be used instead of a personal check to guarantee that funds are available for payment.

Certificate of Deposit

See Time Account. Time Deposit or CD.

Check

A written order you have authorized instructing the bank to pay a specific person or entity a specified amount of money from your account.

Chip Card

A debit or ATM card that has a chip on the front as well as the traditional magnetic stripe on the back. The  chip provides added security when used at a chip-enabled terminal or ATM and greater global acceptance. Many countries worldwide have adopted chip technology, and it will become the standard for card payments in the U.S. If a merchant or ATM has not yet adopted chip technology, your transaction will be processed using the magnetic stripe as it is today.

Conduit IRA

A separate IRA established with a rollover from an eligible retirement plan.

Coverdell Education Savings Account

Designed to help parents and others fund a child's education. Contributions and earnings may be withdrawn tax-free when used to pay qualified education expenses.

Checking Account

A bank account that allows you to deposit and withdraw money, make point-of-sale purchases and write checks.

Compound Interest

When interest is paid not only on your deposits, but also on the interest that has been paid on your account.

Credit

A deposit made to your account that increases your available balance, such as cash or checks.

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D - L

Debit

Any item that reduces the balance in your bank account. A check, ATM withdrawal, and Debit Card purchase are all examples of debits.

Debit Card

A card issued by the Bank for making purchases and payments at participating retailers and service providers – including online or by phone. You can also use it to access cash at ATMs. Purchases and payments are deducted from the primary checking account linked to the card. The debit card comes with a chip on the front as well as a traditional magnetic stripe on the back.

Deposit

To put money into your account.

Direct Deposit

Direct Deposit is a free service that automatically deposits your recurring income received into any Wells Fargo checking or savings account that you choose. Income received from your employer, Social Security, pension and retirement plans, the Armed Forces, VA Benefits, and annuity or dividend payments may all qualify for Direct Deposit.

Dormant Account

An account becomes dormant when, for an extended period of time, you have not initiated activity on the account, such as making a deposit, withdrawing funds at a banking location, or writing a check which is paid from the account.  Once dormant, safeguards are put in place to protect your account which may include restricting certain ATM, automated telephone banking, and online transactions. Generally, this time period is 12 months for a checking account, 34 months for a savings account, or 34 months after the first renewal for a Time Account (CD).

Escheat

If no customer initiated activity occurs on the account within the time period as specified by state Unclaimed Property laws, your account funds will be transferred to the state. This transfer is known as “escheat.”  You must file a claim with the state to recover your account funds.

Excess Activity

Regulation D and Wells Fargo limit certain types of withdrawals and transfers that can be made from your savings account to a combined total of six (6) per monthly fee period. If the limit is exceeded, an excess activity fee for each withdrawal or transfer over the limit will be assessed. If the limit is exceeded on more than an occasional basis, your savings account could be converted to a checking account or closed.

Federal Deposit Insurance Corporation (FDIC)

An independent agency of the United States government that protects customers from the loss of their deposits if an FDIC insured financial institution fails.  For information on the amount of insurance afforded depositors and how depositors can maximize the amount of money insured by owning deposit accounts in different ownership categories, please refer to www.fdic.gov.

Inactive Account

An account becomes inactive when, for an extended period of time, you have not initiated activity on the account, such as making a deposit, withdrawing funds at a banking location, or writing a check which is paid from the account.  Generally, this time period is 11 months on a checking account, 23 months on a savings account, and 23 months after the first renewal for a Time Account (CD).

Interest

A fixed amount paid on deposits or a fixed charge for borrowing money, usually a percentage of the amount deposited or borrowed.

Interest-Earning

Bank deposit accounts that earn interest. An interest-earning account may earn interest at a variable or a fixed interest rate.

Joint Account

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

Linked

Linked refers to accounts or services that are tied to or connected to your checking account.

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M - R

Money Order

A document issued by a bank ordering payment for a specific sum of money to an individual or business.

Non-sufficient Funds (NSF)

A term used to indicate when an item such as a check, or other transaction presented for payment is returned unpaid because the available balance in your deposit account is less than the amount of the item. Also called "returned item" or "bounced check." A fee will apply.

Official Check

An official check is a check payable to a third party issued by Wells Fargo & Company.

Online Banking

A service that allows you to handle most banking activities from your computer via the Internet. Banking activities such as opening accounts, monitoring account activity, transferring funds, paying bills, etc., can be done quickly, easily and safely.

Overdraft

An overdraft is a negative balance in your account.

Overdraft Protection

A service offered by the bank where you can link eligible savings or credit accounts to your checking account. If you don’t have enough money in your checking account, the bank will use available funds in your linked account(s) to authorize your transactions.  If you don’t have enough money in your checking account and the bank transfers money from your linked account(s) to bring your balance current, a single Overdraft Protection transfer or advance fee will be assessed regardless of the number of transactions presented for payment that day.

Personal Identification Number (PIN)

A secret combination of letters or numbers you use to gain access to your account through an electronic device such as an ATM.

Point-Of-Sale (POS)

A merchant transaction (purchase or return) made through a store, telephone, or internet using an ATM card or debit card.

Regulation D

A Federal Reserve Board regulation that sets a withdrawal and transfer limit from a savings account held at a depository bank and an early withdrawal penalty on certain withdrawals from or closures of a time account (CD).

Returned Item

See Non-sufficient Funds (NSF).

Routing Number

The nine-digit number on the bottom left hand corner of your checks, to the left of your account number. The routing number identifies the bank that issued the check. Every bank in the United States has at least one routing number.

Roth IRA

A type of IRA that allows individuals, subject to certain income limits, to set aside money each year to grow tax-deferred. Contributions are not tax deductible, but may be withdrawn tax-free at any time. Earnings may be withdrawn tax-free if certain conditions are met, otherwise taxes and penalties may apply.

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S – Z

Savings Account

An FDIC-insured bank deposit account that earns interest. Unlimited withdrawals are permitted in person and at the ATM. Other withdrawals are subject to limits. Select Wells Fargo savings accounts permit limited check access.

Simple Interest

Interest that is calculated only on the principal amount, that is, the amount of the money that was originally deposited. (By contrast, compound interest is when a financial institution pays you interest, not only on your initial principal amount, but also on the interest your deposit has earned over time).

Simplified Employee Pension (SEP) IRA

An IRA that receives employer contributions pursuant to a simplified employer pension plan, used typically by self-employed people or small companies.

Stop Payment Order

When you ask the bank to not pay a particular check/transaction that you have written on your account.

Statement Period

A period of time for which activity on your account is reported on your statement. There is a start and end date for each statement period. Statement periods may be monthly, quarterly, semi-annual, or annual. Also called a "monthly fee period."

Time Account, Time Deposit, or CD

An FDIC-insured bank deposit account where you agree to keep the money on deposit for a specified period of time, usually anywhere from three months to several years. In exchange, the interest rate paid is usually higher than the rate paid on savings accounts. Accounts with higher balances and longer terms may earn higher rates. Funds withdrawn prior to "maturity" are subject to an early withdrawal fee. You can elect to let accrued interest compound in the account or have it paid to you monthly, quarterly, or annually. Wells Fargo's Time Account is also known as a CD.

Traditional IRA

A retirement account that allows individuals to set aside money each year. Contributions may be tax deductible and earnings grow tax-deferred. Deductible contributions and earnings are taxed when withdrawn, typically at retirement. A 10% IRS penalty may apply for pre-mature withdrawals.

Variable Rate

An interest rate that can change on a periodic basis or when certain conditions are met.

Wire Transfer

Wells Fargo's wire transfer system enables you to move money between financial institutions in the U.S. and throughout the world. Because wire transfers are immediate, they are also used for transactions requiring finality of payment.

Withdrawal

To take money out of your account. You can do this many different ways, including:

  • Writing a check
  • Debit card purchase – use your debit card to make everyday purchases and pay bills worldwide at participating retailers and service providers, including online or by phone
  • ATM withdrawals – get cash at ATMs worldwide
  • At any Wells Fargo banking location

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