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| Term | Definition |
|---|---|
| Minimum balance requirement | A rule that financial institutions set for their account holders where the account owner needs to keep a certain amount of money in their account at all times—otherwise, they will be charged a fee |
| Financial institution | An organization whose services focus on enabling financial transactions between people, corporations, or governments |
| Credit union | A nonprofit organization that offers financial services for its members, including storing their money and issuing loans |
| Overdraft fee | A payment that someone must make to their bank if they accidentally try to withdraw more money than they have in their account—which is called having non-sufficient funds |
| Certificate of Deposit (CD) | A special type of account where you deposit money for a certain, pre-determined amount of time; while it's in this account, you cannot access your money—but you receive interest payments in exchange |
| Interest | A term for the cost that someone pays in exchange for borrowing money |
| Money Market Account (MMA) | A special type of account that offers many of the same features as checking or savings accounts but pays you more interest; however, it may also have higher fees and come with more risks than traditional bank accounts |
| Checking account | A type of bank account most commonly used for everyday spending; it generally does not pay interest but has no limit on the number of transactions you can make each month |
| Savings account | A type of bank account most commonly used for the longer-term storage of money; it generally pays a little bit of interest but may have a limit on the number of transactions you can make each month |
| Transactions | Specific things you can do with the money in your bank account, including: taking money out (withdrawals), putting money in (deposits), borrowing money (loans or credit), and moving money to other accounts (transfers) |
| Check | A physical piece of paper that instructs the bank to withdraw a certain amount of money from one person’s account and deposit it into someone else’s account |
| Account balance | The exact amount of money in your account at any given time |
| Debit card | A small plastic card linked to a person’s checking account; the person can use it make purchases or withdraw cash from an ATM, and the money will get taken directly out of their bank account |
| Personal Identification Number (PIN) | A secret 4-digit number that you create when you receive a new debit card; this serves as a security feature to prevent others from using your card |
| Transfer | A type of transaction where money moves from one bank account to another; this can take place either directly between banks (a wire transfer) or through an Automated Clearing House (ACH) |
| Account number | An 8-12 digit number that is used to identify a specific checking or savings account; this number appears on checks and in online banking accounts |
| Routing number | An 8-12 digit number that identifies which banking institution created a specific account; multiple accounts within the same bank will have this number in common |
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