Banking Terms

Account balance - The amount of money in an account at the start of the business day. The balance includes deposits and withdrawals posted the previous evening even though the funds may not have been collected or “cleared.”

Account statement - A printed or electronic statement of all transactions posted to an account during a statement cycle.

Active account - An open bank account in which transaction activity has occurred within the past 3 years.

Annual percentage yield (APY) - An annual rate of return taking into account the effect of compounding interest. The annual percentage yield measures the total amount of interest paid on an account based on the interest rate and the frequency of compounding interest. The annual percentage yield is expressed as an annualized rate, based on a 365-day year. Also, see Compounding Interest.

Automated Clearing House (ACH) - A nationwide funds transfer network that enables participating financial institutions to electronically credit, debit and settle entries to and between bank accounts.

Automatic Funds Transfer (AFT) - A pre-arranged request that automatically moves funds from one account to another internal or external account on a date of the account holder’s choosing. Example: Employer Payroll deposits

Automatic Payment - A pre-arranged request that automatically deducts funds from an account on the day of an account holder chooses to pay a recurring bill. Example: Mortgage Payments.

Available Balance (“Cleared Funds”) - See Collected Balance.

Average Daily Balance - The sum of all the daily account balances during an accounting period (usually a monthly statement cycle) divided by the number of days in the same period. May be used to determine whether a monthly maintenance fee applies or whether the account qualifies for special services or discounts.

Bill Pay - A service from Pacific Commerce Bank that lets an account holder pay bills online.

Bounced check (Returned Check) - A check that is returned to the Payer’s Bank because there were not sufficient funds to pay the amount of the check when presented by the Payee’s (Depositor’s) Bank.

Canceled Check - A check that has been posted against an account. A canceled check may be acceptable as legal proof of payment.

Cashier’s Check - A check issued on a Bank and paid from its funds.

Certificate of Deposit (CD) - A deposit account for a fixed term that earns a fixed or variable interest rate. CDs generally offer a higher interest rate than other types of deposit accounts. Terms can range from 7 days to 5 years. Early withdrawals before the maturity (or prior to the end of the term) may result insubstantial early withdrawal penalties.

Certified Check - A check for which the bank guarantees payment.

Checking Account - A type of deposit account that enables customers to deposit funds and withdraw available funds on demand, typically by writing a check or using a debit card. These accounts may or may not be interest-bearing.

Check Image - An image of a canceled check accessible by signing on to Online Banking or by requesting a hard copy from the branch. Fees may apply for hard copy requests.

Collected Balance - The amount of funds available for withdrawal as of the date reported in an account at the start of the business day.

 Compound Interest - Interest that is calculated on both the principal balance of an account and the accumulated interest earned for that account “Interest earned on the interest (and principal).”

 Credit - A transaction that increases an account balance.

 Credit Card - Typically a plastic card issued by a bank or a credit card provider for the purpose of permitting the cardholder to purchase goods or services using a pre-approved credit line.

 Custodial Account - An account created for the benefit of a minor (a person under the age of 18 or 21 depending on state law) with an adult as the account's custodian.

 Debit - A transaction that decreases an account balance.

 Debit Card - A plastic card that deducts money from a designated Pacific Commerce Bank checking account to pay for goods or services. It can be used anywhere Visa® debit cards are accepted. A debit card can also be used at ATMs to withdraw cash. Most Debit Card transaction require the use of a PIN(Personal Identification Number) for security and identification purposes.

 Deposit - Monies in the form of cash, checks and/or electronic credits into a customer’s bank account.

Deposited Item Returned Fee or Cashed Item Returned Fee - A fee charged each time a check or other item that is cashed or accepted for deposit to an account that is later returned,unpaid by the drawee bank.

 Direct Deposit - A pre-arranged service whereby automatic recurring deposits are made into a checking, savings or money market savings account.Most commonly Direct Deposits are payroll, pension, Social Security or other periodic payments you receive.

 Disclosure - Information explaining an account or loan’s services,fees, terms and conditions as required by regulation.

 Electronic Funds Transfer (EFT) - Any transfer of funds initiated by electronic means from an electronic terminal, telephone, computer, ATM or magnetic tape.

 Federal Deposit Insurance Corporation (FDIC) - The FDIC is an independent agency of the United States government that protects people who have funds on deposit with FDIC-insured banks and savings associations against the loss of their insured deposits if their bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. The FDIC guarantees deposit accounts (checking, savings, money market savings and CDs) up to applicable limits, which is $250,000 per depositor, per insured bank, for each account ownership category. For further details, please visit the FDIC website at www.fdic.gov/.

Float - The time between the date when a check is deposited to an account or written on an account and the date the funds become available or are posted against the account.

 Inactive account - A bank account in which there has been no activity in the account within the least 3 years. The law requires the bank to turn the account over (escheat) to the state as unclaimed property.

 Interest-bearing account - An account that earns interest.

 Interest rate - Interest rates can be defined as “earned” or “charged.” For deposit accounts, it is the percentage of interest paid on qualifying interest-bearing accounts, such as savings, CDs and some checking accounts. For loans, it is the percentage charged on a loan or line of credit.

 Individual Retirement Account (IRA) - An account that provides either a tax-deferred or tax-free way to save for retirement. There are many different types of IRAs: Roth,Traditional and Rollover IRAs are the most common. With a self-directed IRA,some people invest in mutual funds or stocks, while others may choose bank products such as CDs and money market savings accounts.

 Joint Account - An account owned by two or more individuals requiring one or more signatures to transact business.

 Linked Account - Any account linked (or attached) to another account at Pacific Commerce Bank so that funds can be transferred electronically between accounts.

 Maturity Date – The Maturity Date refers to the final payment date of a loan or other financial instruments, at which point the principal and all remaining interest and outstanding fees are due and payable. The term fixed maturity is applicable to any form of financial instrument under which the loan is due to be repaid on a fixed date.

 Minimum Daily Balance - The lowest end-of-day balance in an account during a statement cycle; a certain minimum daily balance is often required with interest-bearing accounts to avoid a monthly maintenance fee or qualify for special services.

 Money Market Account - A savings account that generally earns higher rates than regular savings accounts and limits a total of 6 automatic or pre-authorized transfers, telephone transfers or payments (including check, draft and point-of-sale transactions, if checks or debit cards are allowed on the account) from the account each monthly statement cycle.

 Non-bank ATM - A Third Party ATM cash dispensing machine that provides cardholders with access to funds in their account. Funds Available may be limited in a single day or weekend regardless of collected balance.

 Non-sufficient Funds (NSF) - Returned Item - NSF is a term used to indicate that a demand for payment (a debit) cannot be honored because insufficient funds are available in the account on which the instrument was drawn. In simplified terms, a debit has been presented for payment, but the amount exceeds the available balance in the account. An NSF check (colloquially referred to as a “bounced check”) is returned unpaid to the institution on which it was drawn and an NSF Fee is assessed to the customer. An NSF- Returned Item is when an institution declines to cover the item (check) and returns the check unpaid.

 Online Banking - A service that allows an account holder to obtain account information and to conduct certain banking transactions via a personal computer or mobile device.

 Overdraft Item - An Overdraft Item occurs when there are not available funds in an account to cover an item (check, ATM, in-person withdrawal or other electronic withdrawal means) and the institution authorizes and pays the item which overdraws an account taking the balance to a negative. An Overdraft Fee/Non-sufficient Funds Fee is charged when the account is taken into the negative and the item is paid. 

 Overdraft Fee - An Overdraft Fee/Non-sufficient Funds Fee is charged when an account is taken into the negative and the item is paid.

 Personal identification number (PIN) - A 4-digit code that is used with an ATM or Debit Card to provide additional security to the cardholder when accessing an account at an ATM or making a purchase using a debit card. An ATM PIN code should always be kept confidential and separate from the card. For protection, do not disclose a PIN Code to anyone. To change a PIN Code, visit one of the branch locations.

 Regulation E - Regulation E refers to the Electronic Fund Transfer Act which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. The primary objective of Regulation E is the protection of individual consumers engaging in electronic fund transfers.

 Electronic fund transfer systems include automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and pre-authorized transfers from or to a consumer’s account (such as direct deposit and social security payments). The term “electronic fund transfer” (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer’s account.

 Regular Savings account - A deposit account which pays interest, but checks are not provided to account holders to withdraw funds from the account. In some instances, tiered interest rates are available based on account balance thresholds.

 Simple Interest - The interest calculated only on the principal funds that have been deposited in the account.

Stop Payment - A request made by a depositor to not pay an outstanding check or EFT payment that was written or authorized. Stop-payment orders are generally placed for checks that have been lost or stolen or in situations where a purchase is disputed. Stop payment orders generally expire after 6 months and a fee is usually charged for this service.

 Transaction Limitations - Refers to a Federal Reserve Board regulation that limits certain types of withdrawals and/or transfers which can be made from a savings and/or money market deposit accounts. With such accounts, no more than 6 pre-authorized or automatic transfers (including check, draft and point-of-sale transactions, if checks or debit cards are allowed on the account), or telephone / PC transfers (including bill payments) may be made each month. However,no transaction limits apply for withdrawals made at a Teller counter.

 Transfer - The movement of funds from one account to another within the same institution.

 Uncollected funds - Refers to items deposited in an account that have not yet been collected (paid) by the bank on which they were drawn.

 Variable Rate - An interest rate that may fluctuate (adjust) during the term of a loan, line of credit, or deposit account. Rate adjustments are disclosed to the customer at the time the deposit account and/or loan is opened. 

 Wire Transfer - An electronic payment service for transferring funds between financial institutions nationally or internationally.

 Withdrawal - The removal of funds either by cash, check or electronic debit from an account.

 Zero Liability Protection - If a Pacific Commerce Bank VISA debit card is lost or stolen, and the loss is reported promptly, the customer may not be responsible for fraudulent purchases made with the card. There is no charge for the Zero Liability Protection Program and it is available on Pacific Commerce Bank Debit Cards.

 Zero Liability Protection effective October 17, 2014,covers fraudulent transactions for both PIN-based and signature-based VISA Debit Card transactions reported within 2 days of discovery. The coverage for unauthorized transactions is in effect provided the cardholder has: (1)exercised reasonable care in safeguarding the card from risk of loss or theft;and (2) promptly reports the loss or theft upon discovery to Pacific Commerce Bank.