Glossary of Banking Terms

To accumulate between payments. In a consumer credit transaction; interest charges accumulated from the date one payment is due through the date the next payment is due.

A system for setting balances between banks arising from payments sent or received electronically for depositors instead of being done through checks.

The denial of credit, in the dollar amount or according to the terms requested by the applicant.

The length of time it will take to pay off your loan.

A schedule that shows the amount of principal and interest due for a loan payment. It will also show the loan balance remaining after each payment is made.

A report prepared by an appraiser that estimates the current market value of a property.

This is the cost of credit on a yearly basis expressed as a percentage. The APR results from three factors: The amount financed, the term of the loan, and the finance charge.

The percentage, required by Truth in Savings regulations, to be disclosed on interest-bearing deposit accounts. The APY reflects the total interest to be earned based on an institution’s compounding method, assuming funds remain in the account for a 365-day year.

A loan product that the interest rate can adjust.

An electric terminal that can perform many routing banking services for the customer such as cash withdrawals, deposits, and account transfers.

An account where funds from a time deposit are automatically transferred into a checking account to cover presented checks.

A loan product that has the interest fixed for a specified term of the loan, then it needs to be reset at a new rate.

A basis point is a unit that is equal to 1/100th of a percentage point. It is frequently used to express percentage point changes less than 1. For example: 25 basis points is equal to 0.25%.

The one for whom an account has been established.

A feature of Internet Banking that allows you to generate and send bill payments directly from your checking account via the Internet. You do not have to write out checks your account will be automatically debited.

Measures the net value of an individual’s assets.

A cashier's check (also known as a cashier's cheque, bank check, official check, teller's check, bank draft or treasurer's check) is a negotiable instrument (form of payment, in this case a check) guaranteed by a bank.

A contract under which the bank agrees to pay the customer the amount deposited plus interest on a specified maturity date.

A central site where banks in one area present checks drawn on each other for collection and exchange. Each participating bank’s balance at the clearing house is adjusted on a net basis to reflect the difference between the value of checks paid and the value of checks collected to and from other banks in the collection arrangement, i.e., to “clear” the day’s transactions.

The costs a borrower must pay when a mortgage loan in completed. These include origination fee, title insurance, attorney’s fees, property survey and prepaid expenses (taxes and insurance).

Assets pledged by a loan client to a lender to guarantee a loan. These assets become the property of the lender if the loan client does not repay the loan.

The senior administrative officer of the Department of the Treasury office responsible for the chartering and supervision of national banks. The agency is known as the Office of the Comptroller of the Currency, or OCC.

Web cookies or just cookies, are parcels of text sent by a web server to a web browser and then sent back unchanged by the browser each time it accesses that server. Web cookies are used for authenticating, tracking, and maintaining specific information about users, such as the users site preferences.  They are also used for shopping carts.

A credit bureau is a company that collects information from various sources and provides consumer credit information on individual consumers for a variety of uses. This helps lenders assess credit worthiness, the ability to pay back a loan, and can affect the interest rate applied to loans.

A card used to get money, goods, or services using a line of credit established by the card issuer and issued to the cardholder. These cards may be pre-paid.

A card that looks like a credit card, but when a purchase is made funds are immediately transferred from the holder’s account to the payee’s account. It is not a credit line.

An automatic deposit of funds from a payer to a checking or savings account. The term is often used to refer to deposits from payroll, Social Security checks, military and civilian salary payment, Civil Service and Railroad Retirement annuity payments, and Veterans Administration compensations and pension payments.

A notice describing the terms and conditions of an account or loan.

This is the number used by organizations for tax reporting and wage withholding purposes.

An account set up during a real estate transaction that the borrower deposits funds to cover payments of taxes and/or insurance.

The federal government agency that insures accounts at most commercial banks and savings banks. The FDIC also has primary federal supervisory authority over insured state banks that are not members of the Federal Reserve System.

One of the 12 district Federal Reserve banks responsible for issuing the nation’s currency, namely, Federal Reserve notes. Reserve banks hold most of the reserves that banks are legally required to maintain against deposits. See Appendix A-2.

The central monetary authority for the United States, created by the Federal Reserve Act of 1913. The Federal Reserve System is divided into 12 districts, each having a Reserve bank owned by the member banks in that district. All national banks are members. State chartered banks may become members, and the Board of Governors and the Reserve Banks supervise state members.

A person acting on behalf or in trust with another. For example, an agent acting on behalf of a principal, an officer on behalf of an organization, or a trustee on behalf of a beneficiary. A fiduciary could be the drawer of a check, a payee, or an endorsee on the check.

A legal process that allows a bank to sell real estate property held as collateral on a mortgage loan if the borrower does not make their payments.

A High Deductible Health Plan (HDHP) is a plan with an annual deductible no less than the amounts allowed for the current year by the federal government. For current HDHP limits: Click Here

You can make a contribution to your HSA each year that you are eligible to do so. See current HSA contribution limits.

ID is your personal Identification. PIN is a Personal Identification Number, a password used to access a website,  automated teller machine, etc. 

The dollar amount paid by a consumer to a bank in exchange for use of the bank’s money for a certain period of time.

A product offered by a financial institution that allows account holders to do banking transactions via the Internet.

A web based system whereby plan participants can access account balances, investment returns as well as other retirement planning tools.

A legal claim that gives a lender the right to take possession of collateral if a borrower does not repay a loan.

A loan that works like a credit card – customers may take the funds when needed, make payments, and use the funds again.

This is the process by which characters are imprinted on checks in a form that can be read by machines allowing for high speed processing of checks.

The interest rate paid on Money Market accounts. This rate is determined by the financial institution where the account is located. Usually the interest rate is higher than a regular savings account as Money Market accounts typically have higher balance requirements.

A money order is a payment order for a pre-specified amount of money. It is a more trusted method of payment than a personal check, because it is required that the funds be prepaid for the amount shown on it.

A check or instrument is negotiable when it satisfies all the requirements of U.C.C. 3-302. In summary, a check is negotiated when it is transferred properly. A proper transfer exists when there has been a voluntary delivery of possession of the instrument to another party and the instrument contains all necessary endorsements.

Mortgage options that don't conform with traditional mortgage products. Customized financing options that fit special circumstances.

A written promise to pay a specific amount of money according to the terms and conditions described in the note.

Click the “Login” button, enter your Net Teller ID and PIN, then click on the “Login” button found at the bottom of the page.

After the first login, you will be required to change the PIN. As an added security feature, you can change the Net Teller ID and PIN as often as you like.

If you forget the Net Teller ID or PIN, call Winona National to have the account reset. For security purposes, you will be locked out of Bank@Home after 3 unsuccessful login attempts.

The person, including executor or administrator, appointed by a court pursuant to probate proceedings who has the authority to act on behalf of the decedent.

A card that looks like a credit card with your photo on it. When a purchase is made funds are immediately transferred from your checking account to the payee’s account. This card my also be used in ATM machines to withdraw cash.

Probate is the legal process of settling the estate of a deceased person, specifically resolving all claims and distributing the decedent's property.

The major probate expenses include court costs and fees paid to the personal representative and the attorney.  The funds to pay these expenses come out of the estate.

A qualified plan is an employee-sponsored plan that qualifies for special tax treatment under Section 401(a) of the Internal Revenue Code.  A qualified plan is established to provide retirement benefits for employees and their beneficiaries.

A trust set up by a grantor during his or her lifetime that can be changed or terminated by that individual.

Credit repeatedly available up to a specified amount as periodic repayments are made.

A national market where a financial institution’s mortgage loans (and other loan types) can be bought and sold to other investors.

Any individual or firm in the business of buying and selling securities for itself and others.  Broker/Dealers must register with the SEC.  When acting as a broker, a broker/dealer executes orders on behalf of his/her client.  When acting as a dealer, a broker/dealer executes trades for his/her firm's own account. 

You apply once and pay only one set of closing costs.

A loan product that is a temporary loan until your home sells.

In the case of individuals this will be the social security number. In the case of organizations, this will be the employer identification number See EIN.

A traveler's cheque (also traveller's cheque, travellers cheque, traveler's check, or travelers check) is a preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege. As a traveler's cheque can usually be replaced if lost or stolen, they are often used by people on vacation in place of cash.

A system in which one or more steps of the transfer of paper checks is replaced by electronic transmitted data. One example is the bank that retains the checks and sends its customer a periodic statement listing all the information. In another system the depositary bank would keep the check and store it and electronically transmit the necessary information from the check to the drawee bank. Some ATM networks also use truncation.

Upon your death, a provision within your Last Will and Testament creates a Testamentary Trust. Specific assets are turned over to a trustee for taking care of beneficiaries as you have directed.

The form the bank files in public records to notify others that it has taken the listed assets (i.e. car, boat) as collateral for a loan.

A Line of Credit that is not secured by an asset. Personal amount of credit on reserve that a customer is allowed to drawn on or advance when need.

An interest rate that can change during the life of the product it is attached to.

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