Banking & LendingBanking & Lending GlossaryPart 3 of 13
Deposits Glossary
22 terms from the Banking & Lending book's Deposits part, each defined in a line and linked to the chapter that explains it.
- APSN (authorize positive, settle negative): charging an overdraft fee when a card purchase approved against a positive available balance settles against a negative one (Overdraft, NSF & Fees).
- APY (annual percentage yield): the yearly yield on a deposit including compounding, computed by Regulation DD's formula from interest over principal and days in the term (The Banking & Lending Business).
- Banking day, business day: the part of a business day a bank office is open for substantially all its business, when a deposit is received; and any weekday that isn't a federal holiday, which availability deadlines count (Funds Availability).
- Certificate of deposit (CD, share certificate): a time deposit with a maturity of at least seven days, a disclosed early withdrawal penalty and a renewal policy (Deposit Accounts & Truth in Savings).
- Deposit insurance: FDIC coverage of $250,000 per depositor, per insured bank, per ownership category (Deposit Insurance).
- Early withdrawal penalty: what a time deposit charges for withdrawing before maturity, usually days of interest on the amount withdrawn; at least seven days' simple interest within six days of deposit (Deposit Accounts & Truth in Savings).
- Exception hold: holding a deposit beyond Regulation CC's schedule under one of six exceptions (new account, large deposit, redeposit, repeated overdrafts, reasonable cause, emergency), with a notice (Funds Availability).
- Grace period (time deposit): the days after a CD matures and renews during which the depositor can withdraw or change terms without penalty, commonly ten (Deposit Accounts & Truth in Savings).
- Money market deposit account (MMDA): a savings deposit with tiered rates and limited check writing; a deposit, unlike a money market fund (Deposit Accounts & Truth in Savings).
- NSF (nonsufficient funds) fee, returned item fee: a fee for refusing to pay a check or ACH debit and returning it, dropped by many large banks since 2022 (Overdraft, NSF & Fees).
- Overdraft (discretionary): a bank paying an item the balance doesn't cover, at its discretion, for a per-item fee that isn't a finance charge unless agreed in writing (Overdraft, NSF & Fees).
- Overdraft opt-in: the consumer's affirmative consent, after the Model Form A-9 notice, without which no fee may be charged for an ATM or one-time debit card overdraft (Overdraft, NSF & Fees).
- Ownership category: the legal capacity an account is held in (single, joint, retirement, trust, employee benefit, business, government), each insured separately (Deposit Insurance).
- Part 370: the FDIC rule requiring banks with 2 million or more deposit accounts to compute every account's insured amount within 24 hours of failure (Deposit Insurance).
- Pass-through insurance: FDIC coverage that reaches each owner of a pooled custodial account, if the records allow it (Deposit Insurance).
- POD (payable on death) account: an informal revocable trust account whose named beneficiaries take the balance at the owner's death, insured in the trust category (Deposit Insurance).
- Reasonable period: the extension Regulation CC presumes reasonable when an exception applies, up to one business day for on-us checks and five for other checks (Funds Availability).
- Regulation CC: US funds availability and check collection rules (Funds Availability).
- Regulation D: the Federal Reserve rule defining transaction accounts, savings deposits and time deposits, without the six-transfer limit since April 2020 (Deposit Accounts & Truth in Savings).
- Regulation DD (Truth in Savings): the consumer deposit disclosure rule: account disclosures, change and maturity notices, statements and advertising; Part 707 for credit unions (Deposit Accounts & Truth in Savings).
- Re-presentment: a payee presenting a returned check or ACH debit again, which can draw a fresh NSF fee unless the bank links it to the original (Overdraft, NSF & Fees).
- Trust rule (2024): the FDIC formula insuring trust accounts at $250,000 per eligible beneficiary per owner, up to five ($1,250,000), from April 1, 2024; credit unions from December 1, 2026 (Deposit Insurance).