Banking, explained simply.

An ACH transfer is an electronic bank-to-bank payment processed through the Automated Clearing House network, used for direct deposits, bill payments, and money transfers.

APY (Annual Percentage Yield) measures the total interest you earn on a deposit account over one year, including the effect of compounding.

ATM fees are charges for using an automated teller machine, especially when using an out-of-network ATM not owned by your bank.

A bank charter is the legal authorization granted by federal or state regulators that allows an institution to operate as a bank.

Bank reconciliation is the process of comparing your personal financial records to your bank statement to ensure all transactions match and identify any discrepancies.

A bank run occurs when a large number of depositors withdraw their funds simultaneously, fearing the bank may become insolvent.

A bank statement is a monthly document from your bank summarizing all transactions, deposits, withdrawals, fees, and your account balance.

A business checking account is a bank account designed for business transactions, separating personal and business finances for legal and tax purposes.

A cashier's check is a check issued and guaranteed by a bank, drawn from the bank's own funds rather than your personal account.

A CD ladder is a savings strategy that splits your money across multiple certificates of deposit with staggered maturity dates to balance returns and liquidity.

A certificate of deposit (CD) is a savings product that locks in a fixed interest rate for a set period in exchange for leaving your money untouched.

A checking account is a bank account designed for everyday transactions like paying bills, making purchases, and withdrawing cash.

Credit unions are member-owned nonprofits while banks are for-profit corporations. Both offer similar services but differ in rates, fees, and governance.

A custodial account is a financial account an adult manages on behalf of a minor until the child reaches the age of majority.

A digital wallet is a smartphone app or electronic system that stores payment information, allowing you to make purchases and transfer money without physical cards or cash.

Direct deposit is an electronic payment method that transfers funds — like your paycheck — directly into your bank account on payday.

FDIC insurance protects your bank deposits up to $250,000 per depositor, per bank, if the bank fails. It is backed by the full faith of the U.S. government.

Fintech (financial technology) refers to companies that use technology to deliver financial services more efficiently, often challenging traditional banks.

Fractional reserve banking is the system where banks hold only a fraction of deposits in reserve and lend out the rest, creating new money in the process.

A high-yield savings account offers significantly higher interest rates than traditional savings accounts, typically available through online banks.

Series I bonds are U.S. savings bonds that protect against inflation by combining a fixed rate with a variable inflation-adjusted rate.

An IBAN (International Bank Account Number) is a standardized international numbering system used to identify bank accounts across borders for international transfers.

A joint account is a bank account shared by two or more people, where each owner has equal access to deposit, withdraw, and manage funds.

A minimum balance is the lowest amount of money you must keep in a bank account to avoid fees or qualify for benefits like higher interest rates.

Mobile banking lets you manage your bank accounts, transfer money, deposit checks, and pay bills from your smartphone or tablet.

A money market account combines features of savings and checking accounts, offering higher interest rates with limited check-writing and debit card access.

A money order is a prepaid payment certificate that works like a check, commonly used when a personal check is not accepted or you do not have a bank account.

A neobank is a digital-only bank with no physical branches, typically offering fee-free accounts and a mobile-first experience.

Notarization is the process of having a notary public officially verify your identity and witness your signature on important legal or financial documents.

Open banking is a system where banks share customer financial data — with the customer's consent — with third-party apps and services through secure APIs.

An overdraft occurs when you spend more money than is available in your checking account, resulting in a negative balance and potentially a fee from your bank.

A banking power of attorney is a legal document that authorizes another person to manage your bank accounts and financial transactions on your behalf.

A routing number is a nine-digit code that identifies your bank or credit union in the U.S. financial system, used for direct deposits, wire transfers, and bill payments.

A safe deposit box is a secure storage container inside a bank vault that you rent to store valuables, important documents, and irreplaceable items.

A savings account is a deposit account that earns interest on your balance while keeping your money accessible for withdrawals.

U.S. savings bonds are government-backed securities that earn interest over time. They are among the safest investments available.

A sweep account automatically transfers excess funds from one account to another — typically from checking to savings or an investment account — to maximize returns.

Treasury bills (T-bills) are short-term government securities that mature in one year or less. They are considered one of the safest investments in the world.

A trust account is a bank account held by a trustee for the benefit of another person or entity, commonly used for estate planning and asset protection.

A wire transfer is an electronic funds transfer between banks that moves money quickly, often same-day, and is commonly used for large or time-sensitive payments.