Basic Banking Terms

Deposit: A deposit is money you add to your account. When you add money to your account, you must fill out a deposit slip. The deposit slip tells the financial institution how much money you are adding. If you deposit cash, the funds will be immediately available. But if, for example, you deposit your paycheck or a check drawn on an out-of-state financial institution, you may not have immediate use of the funds. The financial institution must first make sure there are funds to cover your check from the financial institution at which the check was originally drawn. Be sure to ask the financial institution how many days from the date of your deposit you can use the money you deposited.

Balance: Your balance is the amount of money you have in your account.

Withdrawal: When you make a withdrawal, you are withdrawal slip, or by using an ATM. It is important to know how much is in your account so you won’t try to withdrawal more money than you have. Keep a record of how much money you withdrawal and how much money is left in your account. With a checking account, if you “overdraw” –write a check for more money than you have in you account- you will be charge a fee. Only write checks against funds that are available.

Fees: Financial institutions charge you fees for providing you with various services. For example, a monthly maintenance fee might be charged for maintaining your account. You for more money than you have in your account.

Interest: Interest is the additional money in your account that the financial institution pays you for keeping your money than you have in your account.

Note: Interest is not earned on all deposit accounts. Financial institutions offer both interest- bearing and non-interest bearing accounts.