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banking terminology list

The ABCs of Banking: Banking Terms You Should Know | Overland Park Bankers

Banking / July 20, 2021

The professionals at Cornerstone Bank want to ensure that our customers always have the resources they need to feel comfortable and confident in their banking. 

Banking terminology can be a little confusing, but we never want our customers to feel intimidated when it comes to important banking terms. 

While some of us only may only want to learn basic banking terms, it’s good to be familiar with other banking terminology, no matter how you bank. 

Below, Executive Vice President of Cornerstone Bank Michelle Guthrie explains common banking terms.

Along with the terms covered by Michelle, we’ve put together our ABCs of banking. We cover the definitions and how these terms fit into our services with our banking terminology list below.

A

ACH (Automated Clearing House Item)

An ACH item is a transfer between one bank and another bank and can happen for both businesses and consumers. There are two types of ACH: Regular ACH, which takes about 2 days to process, and Same Day ACH, which can go out on the same day as long as it’s done by 3:45 PM CT. Cornerstone Bank’s latest time for this is 12:55 PM CT.

 

B

Business Banking

Business banking is a blanket term for all the services we offer for you as a business at Cornerstone Bank. We offer customized business checking, commercial loans, and Money Market accounts for business banking on your own schedule.

C

CardValet

CardValet helps you protect your debit card by sending you transaction alerts. It also allows you to define when and how your cards are used. The app is available for download on GooglePlay (for Android users) and Apple App Store (for iPhone users).

CD (Certificate of Deposit)

A certificate of deposit where the customer will deposit money into an account for a set period of time. During this time, this customer cannot make additional deposits and the account is earning interest. If the customer needs to withdraw money from this account, they can do so but there is a penalty.

D

DDA (Demand Deposit Account)

A DDA is another term for a checking account. You can use a DDA to make withdrawals and deposits, and do everything else that a checking account can do.

Debit Card

A debit card is a card tied to your checking account that uses a 4-digit pin number for security. Alternatively, it can be used as a credit, where you don’t input the pin but the funds are still withdrawn right away. With a debit card, the funds are taken out at the time of usage, whether you use it as debit or credit.

Direct Deposit

Direct deposit is where funds are deposited electronically into an account. Many customers receive their payments in this manner, so they do not have to deposit a physical check to receive their payment.

Mobile Deposit

Mobile deposit is a convenient way to deposit checks directly into your bank account from your smartphone. If your bank has the capability, you simply log into your bank app, take a photo of your endorsed check, and deposit the funds into your account. 

E

Electronic Funds Transfer

This is the ability to transfer funds electronically from one account to another. This can be as a direct deposit, mobile deposit, ATM, etc.

F

Fraud Alert

Your bank can alert you to potential instances of fraud with fraud alerts. This might be through SMS text messages, your mobile app, or through a phone call. Your bank will monitor your account and alert you to suspicious activity.

G

Grace Period

A grace period in banking is a predetermined amount of time where a loan payment can be made without penalty. 

On the deposit side, our CD accounts have a 10 day grace period after maturity before they automatically rollover to a term. This means customers must withdraw the money within that 10-day period, wait a new term, or pay a penalty for withdrawal. 

H

Hold

A hold is when your funds are restricted or unavailable for a particular amount of time. A hold might occur from a recent deposit, withdrawal, suspected fraud, or other reasons where a bank notices unusual activity. It is another level of protection for your money.

I

Interest Rate

For certain accounts, the interest rate is the amount the bank pays to the customer for depositing and keeping money in the account. The higher the interest rate, the more return on your investment into the account. Using an account with a good interest rate is a great way to invest your money passively while growing your savings. View Cornerstone Bank’s interest rates. 

J

Joint Bank Account

A joint bank account is set up for multiple parties to have access to contribute money together. This makes it easy to collaborate for savings goals, budgeting, and other types of expenses. The most common types of joint bank accounts are for couples. 

L

Loans

Bank loans are contractual agreements where a financial institution loans a set amount of money to an individual(s) for a particular purchase. At Cornerstone Bank, we offer multiple types of personal loans and business loans and offer an online loan tool to give you more insight into getting a loan through us.

M

Money Market Account

A Money Market account is a type of demand deposit, where you can withdraw money without prior notice. A lot of Money Market accounts help you grow your finances because they have higher interest rates than traditional savings accounts. These accounts come with higher minimum deposits. At Cornerstone Bank, the minimum opening deposit and minimum daily balance for a Money Market account is $1,000.

N

NMLS Number (Nationwide Mortgage Licensing System)

An NMLS number is a unique number assigned to mortgage lenders as a national standard. This number helps customers compare information between loan officers and provides regulation between institutions.

O

Online Banking

Online banking, or mobile banking, allows you to access your account easily and securely online. Look up statement information, initiate transfers, and complete other record-keeping tasks through your desktop or mobile device. At Cornerstone Bank, you can even open a bank account online!

P

Paperless Statements

Paperless statements (also known as e-statements) are electronic bank statements securely sent to you through our online banking platform. Many people prefer paperless statements to cut down on document clutter and for easy access to documents online.

Personal Banking

Personal banking encompasses all the banking that you do as an individual. This includes everything from day-to-day checking and savings accounts, to bigger milestones like buying your first home, sending your kids to college, or saving for retirement. 

Phishing Bank Scams

Phishing bank scams use your email to get a hold of you. Scammers will create emails that appear to be from a bank you work with. Phishing uses a sense of urgency to lead people to believe that something bad will happen if you don’t give your account information. The reality is, your bank will never ask you to send personal information via email.

Positive Pay

For business accounts, positive pay helps eliminate fraud for business accounts. It allows you to match up checks you’ve written to those that are clearing your account. Then, positive pay gives you the option to pay the check or return it as another level of security and money management.

R

RDC (Remote Deposit Capture) Machine

An RDC Machine is a scanner that a client uses to scan checks and deposit them automatically into the bank. It will be deposited the following day. Our customers who use an RDC machine enjoy the convenience of depositing while at their place of business instead of carving out the time to come to the bank in person to perform deposits.

Routing Number

A routing number is the 9-digit number assigned to a financial institution to provide information on your account’s location. You will find the routing number on the bottom left side of your checks. You can also use your routing number to make online payments directly from your account without the use of a debit or credit card.

For standard ACH, direct deposits and domestic wires, the Cornerstone Bank’s routing number is 101014953.

S

Security Settings

Security settings are all the features for online banking that keep your account safe and secure. With Cornerstone Bank, you can customize your security settings for factors like spending limits, alerts, block a transaction, and more. 

Swift Code

A swift code is an internationally used number that identifies the country, bank, and branch of the bank account for a transaction. A swift code is sometimes known as a swift number or Bank Identifier Code (BIC).

The swift code for Cornerstone Bank is KAASUS41 XXX

T

Transfer

A transfer in banking is the movement of money from one account to another. This can be from different accounts within the same bank or between different financial institutions. There are multiple types of transfers, such as outgoing domestic wire transfers, online transfers, ACH, among others.

W

Wire Transfer

A wire transfer is a bank to bank transfer where the customer requests (either online, by phone, or in person) for money to be moved from one bank to another bank. There is typically a fee with wire transfer because you receive same-day credit.

Y

Yield

Yield is the percentage of return (the money made) on your investment based on the interest rate of your account after each year, including the effect of compounding interest. Cornerstone Bank has established annual yield percentages for our deposit, CD, and IRA accounts. 

Why it’s important to know about banking information like common banking terms

For many people, they like to leave it up to the professionals. While this is totally understandable and Cornerstone Bank’s team will always have our customers’ needs as our priority, we still believe that it’s important to provide resources to make information about banking more accessible for everyone. Our blog is a fantastic resource for that exact purpose!

Here is why our team believes it’s important to know about basic banking terms and other banking information. 

man banking in person

Increase your banking confidence

Money can be a difficult and intimidating subject. Even though money and finances are so important to our livelihood, it’s still a mystifying topic for many. One of the best ways to feel more confident in a topic is to learn more about it—like with the basics like this banking terminology list! The more you know, the more confident you can be.

Learn more about the possibilities

Sometimes our customers are unfamiliar with the possibilities for their banking. Getting to know your banker through our personalized customer service and learning more about banking can help you find better opportunities to maximize your dollar.

Now that you’ve read our banking terminology list, why not get a customized banking experience? Visit the highly qualified professionals at Cornerstone Bank.

We’re celebrating 20 years in service as a local bank serving customers for personal and business banking and loan services. Cornerstone Bank takes pride in watching our customers thrive, no matter who you are. 

As a Cornerstone Bank customer, you’re more than an account number to us. We understand that you can bank anywhere; we value your business and do everything we can to personalize your experience with us. 

For more information on banking terminology or any of our services, contact us online or by phone at (913) 239-8100, or visit us at 9120 W. 135th Street, Overland Park KS.

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