Banking Lingo Made Simple

 

The financial world can be overwhelming – especially when you don’t have a full understanding of some of the terms you hear thrown around. Here at Frontier Bank we want to make sure you have confidence in your knowledge when making financial decisions; so, I am going to go over a few of the terms you may have questions about.

FDIC

The Federal Deposit Insurance Corporation is a government agency that insures deposits in banks for at least $250,000. The agency was established in 1933 to help restore trust in the banking system after the Great Depression.

APY

Annual Percentage Yield (APY) is the rate that will be earned over a one-year period in the account, including compounding interest.

BLENDED INTEREST RATE

If you have a BIG DEAL® Cash account, you may hear us use the term “Blended interest rate”. Blended interest rate comes into play when there are rate tiers in accounts. That means depending on how much you’ve invested, a portion of your balance earns one interest rate, while another portion earns a different interest rate. A blended interest rate averages the different interest rates and also factors in compounding. This account pays different rates based on how much you have invested. When you exceed the $25,000 cap for the premium interest rate, rather than displaying the amount of interest earned in each tier separately the interest rate earned for the entire balance is printed on your statement- this is blended interest rate. You still earn the premium interest rate on the entire $25,000 balance but the overage will make your interest appear to be less- but the earnings will not.

APR

Annual Percentage Rate (APR) refers to the annual rate of interest charged to borrowers. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of the loan. This is especially important when shopping around for loans; one bank’s interest rate may be lower, but they may charge more fees making the APR higher.

COMPOUND INTEREST

This is interest earned not only on the initial deposit but also on any interest that has been added into the account balance.

CD

Certificate of Deposit/Time Deposit (CD) is an account that earns typically a fixed interest rate on the money deposited for a specified length of time. Common terms include 3, 6, 9, 12, 18, 24, and 36 months. Funds cannot be withdrawn before the maturity date unless incurring an early withdrawal penalty. Use our Certificate of Deposit calculator to see what you could earn by opening a CD a Frontier Bank.

ADD-AWAY CD

Frontier Bank offers a unique CD called an Add-Away CD. This means that over the length of the CD you can deposit more money without changing the maturity date. A lot of people love this product if they have multiple CDs that will be maturing at different time but would like to combine the funds into one account.

ROUTING NUMBER

This is a nine-digit number that identifies the bank where your account was opened. It is the first set of numbers printed on the bottom of your checks, on the left side. Smaller banks, like Frontier Bank, may only have one routing number for all their branches, while larger banks may have multiple routing numbers to differentiate between branches in different cities, states, or regions.

ACH

An ACH transaction is an electronic transfer of funds using the Automated Clearing House (ACH) network. The ACH is a secure network in the US through which banks and other financial institutions can transmit electronic transactions. An ACH deposit means that funds are electronically deposited into an account. An ACH payment allows for funds to be transferred electronically from your checking or savings account.

BIG DEAL® CHECKING AND SAVINGS

These are FREE reward accounts that Frontier Bank offers. We offer two checking account options, one that earns interest (BIG DEAL® Cash) and one that earns cashback on your debit card transactions (BIG DEAL® Cash Back); both accounts can be paired with a BIG DEAL® Saver to earn even more. These accounts have no minimum balances or monthly servicing fees!

POS

Point of Sale (POS) transactions are made with your Frontier Bank debit card and you are required to enter your PIN at the time of the transaction.

DIGITAL WALLETS

Phone apps or services that can be used to pay for purchases at participating stores are referred to as Digital or Mobile Wallets. Your card information is not shared with the vendor when using a digital wallet, but rather your virtual account number is used to represent your account information. Examples of these would be Apple Pay, Samsung Pay and Google Pay.

DORMANT ACCOUNTS

bank account without any activity except interest posting after 365 days is referred to as a dormant account. Dormant accounts are deemed inoperable and are typically removed from Online Banking. After a period of time, state law requires banks to transfer dormant account balances to the state’s treasury. To reactive your dormant account, please contact your local branch.

CUTOFF TIME

The cutoff time at Frontier Bank is 3PM. This is the time that Frontier Bank stops crediting same-day deposits. Deposits after the cutoff time are credited the next banking day.

BANKING DAY

Banking days include all the days when offices of a bank are open to the public for all banking functions. This does not include Saturday, Sunday, and legally defined holidays.

ITM

Interactive Teller Machines (ITM) combine the convenience of an ATM with the personal service from a familiar and knowledgeable Frontier Bank representative using live video technology. Their extended hours allow you to conduct the majority of your banking business when it’s convenient for you. An ITM is conveniently located at each of our Frontier Bank locations.

POA

A power of attorney (POA) is a legal document giving one person the power to act for another person. POAs can have broad or limited authority to make legal decisions about the principal’s property, finances, or medical care. POA ceases at death.

 

Becky Kadinger2

Becky Kadinger
Credit Admin/Customer Service Representative
Email: beckyk@frontierbk.com
Phone: 605.331.2889

 

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