At Chevy Chase Bank we know how difficult it can be to be on your own for the first time. Whether you’re new to banking, or just need to learn some of the new terms we’re using, the following glossary can help you learn common terms associated with banking at Chevy Chase Bank.
Glossary of TermsAccount Verification
Before opening a checking account for a new customer, most banks will review your history of using checking accounts, through companies like TeleCheck or ChexSystems. Some banks will run a full credit report to determine the level of risk for a new customer. The account information is collected from participating banks and financial institutions. If you have a history of bouncing checks or misusing your accounts, financial institutions may not open an account for you.
Automated Teller Machine (ATM)
This is a machine where you can obtain many services such as depositing, withdrawing, or transferring money from one account to another 24 hours a day. Use of an ATM requires a card issued by the bank and a Personal Identification Number (PIN). A PIN is a special set of numbers required when using your ATM Card or Check Card. The PIN is used for security purposes, so no one else can access your account.
You can use the ATM for many services, but there might be a fee involved. Most people us ATMs to get cash from their account. If you use another bank’s ATM, you might be charged an additional fee. Generally, you can only make deposits at your bank’s ATM.
Balance
Balance is the amount of money you have available in your bank account.
Balanced Budget
Income equals or exceeds expenses.
Branch Manager
A branch manager is the person who supervises the bank operations at that branch.
Budget
An itemized estimate of income and spending during a specified period.
Certificates of Deposit (CDs)
CDs are accounts where you leave your money for a set period of time, called a term. Available terms can vary widely, but some typical terms are 30 days, 3 months, 9 months, 1 year, 3 years, or 5 years. CDs often pay a higher rate of interest than other deposit accounts. You may pay a penalty if you withdraw your money before the term is up.
Check Card
The Chevy Chase Check Card is a plastic debit card with the Visa® logo and a magnetic strip on the back that allows you to pay for goods and services at stores and other businesses that accept Visa® debit cards. When you use a Check Card, the money comes out of your bank account immediately. The Chevy Chase Check Card also functions as an ATM card for easy access to cash.
Checking Account
A checking account is an account that lets you store your money and provides multiple ways for you to pay bills or to buy goods. The bank takes the money from your account and pays it to the person named as the "payee" of the transaction. The bank provides you with a monthly record, called a statement, of all activity in your account (deposits, withdrawals, transfers, etc.). Check out "How to Use a Checking Account" for more details.
Compound Interest
Compound interest is based not only on the original principal but also on any unpaid interest that has been added to the principal. The more frequently interest is compounded, the faster the balance grows.
Cost of Credit
When you get a loan, there are generally two costs you must pay: fees and interest.
Fees
A fee is the money charged by the bank or financial institution to review your application for credit or to service your credit account. Examples of fees include: application fees, late fees, over-the-limit fees, maintenance fees.
Interest
Interest is the amount of money the bank charges you for letting you use its money. Interest is typically figured as a percentage rate (called the “Annual Percentage Rate”) on the total amount that you borrow. Interest is only part of the total cost of credit, and is separate from any fees charged.
Interest can be either variable or fixed.
Credit
Credit is money you borrow to pay for goods or services. Credit is usually referred to as a loan or line of credit. You make a promise to pay back the money you borrowed, plus interest and fees.
Credit Bureaus
There are three major credit bureaus that report individuals’ credit activity: Equifax, Experian and TransUnion. For a free credit report call 1-877-322-8228 or log on to AnnualCreditReport.com, a website created jointly by all three credit bureaus.
Credit Card
A credit card is a plastic card with the VISA®, MasterCard®, American Express®, etc. logo and a magnetic strip on the back that allows you to pay for goods and services at stores and other businesses that accept these cards. When you use a credit card, you are borrowing the money for each purchase you make. You will receive a monthly statement of all activity on your credit card account that will also state the amount due for payment each month.
Chevy Chase Bank offers a variety of credit card products. Credit cards are subject to approval.
Credit Limit
The amount you can spend on your credit card.
Credit Score
Formal evaluation of an individual’s credit history and capability of repaying debt.
Customer Service Representative
A Customer Service Representative is the person behind the counter who takes money, answers questions, cashes checks, or refers you to the person who can help you. A Customer Service Representative is generally the main contact at the bank. You can go to any open Representative for service.
Deposit
A deposit is money you add to your account. There are many ways to make deposits. Check out “How to Make a Deposit” for further details.
Direct Deposit
Direct deposit is one way your employer or a government agency can provide you with faster access to your paycheck or benefit check. With direct deposit, your paycheck or benefit check is electronically transferred and directly deposited into your account – saving you time from going to a branch or ATM to deposit your paycheck.
Fees
Banks charge different fees for different services. For example, a monthly maintenance fee might be charged for keeping your account open. Often, this type of fee will be waived if you keep a predetermined balance in your account. In addition, you might also be charged a penalty fee if you misuse your account by overdrawing. To learn about Chevy Chase Bank account fees, see our Schedule of Fees.1
Interest
For a deposit account (such as a savings account or CD account), interest is the extra money in your account that the bank pays you for keeping your money in the bank. An advantage of having a deposit account is the ability to make money by earning interest.
Loans
A loan is money you borrow from a bank with a written promise to pay it back later, and is subject to credit approval. Banks charge fees and interest for this service. For a loan, interest is extra money that you pay monthly in addition to the loan balance. Learn more about borrowing options at Chevy Chase Bank.
Non-deposit products
Many banks and financial institutions offer non-deposit products that are not insured by the FDIC. Stocks, bonds, and mutual funds are examples of non-deposit investment products. At Chevy Chase Bank, non-FDIC insured products are offered through Chevy Chase Financial Services Corporation.
Overdraft
The amount that an account holder owes a bank because the balance in the account does not cover the amount he or she had withdrawn.
Overdraft Protection
Overdraft Protection advances money to cover an attempt to withdraw money from an account that does not have sufficient funds. A Student Line of Credit for overdraft protection can loan money to cover ATM withdrawals, purchases made with a check card, electronic transfers and checks. When used to cover checks, overdraft protection prevents the check from bouncing. When used to cover other transactions, it allows the consumer to borrow money through a withdrawal. Interest is assessed on the outstanding balance of the line of credit.
PIN
Personal Identification Number.
Rule of 72
The Rule of 72 says that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72. For example, if you want to know how long it will take to double your money at 8% interest, divide 8 into 72 and get 9 years.
Sales and Service Associate
The Sales and Service Associate is the person who can help you open your account. He or she explains services, answers questions, and provides written information explaining bank products and services.
Savings Account
A savings account is a deposit account that earns interest. You can open a savings account with a minimum opening deposit, but you might pay a monthly fee if your balance is below a certain amount.
Telephone Banking
A bank service which allows you to:
Wire Transfer
A wire transfer is a method of electronically transferring money from one bank to another. Wire transfers can be used to quickly and safely move money from a bank in one country to a bank in another country.
Withdrawal
A withdrawal is the process of taking money from your bank account. You can do this by writing a check from your account, taking cash out of your account at the ATM, making an online or electronic payment or transfer from your account, or by giving a customer service representative a withdrawal slip. You need to be sure you do not withdraw more money than you have available in your account. If you do, you will be overdrawn and may be charged a fee.
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