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Learn the banking lingo


APR. Annual Percentage Rate.

The annual cost of borrowing money expressed as a percentage.


Annual Percentage Yield. Simply, it's the percentage rate of interest that you earn for keeping your money in an account for one year. It's normally a little higher than the interest rate (dividend rate) because interest has been added to the account periodically as indicated by the "dividend period" in the account disclosure. Once the interest earned is placed in the account at the end of the dividend period, the funds become part of the principle balance that is earning money during the next dividend period. Therefore, prior interest increases the account balance and earns additional interest; hence 'yielding' more. This process is called compounding interest; it's why interest rates need to be quoted as percentage yields.

ATM. Automated Teller Machine.

An electronic device that makes cash available with the use of an ATM, credit, or debit (check) card. In some cases, deposits and transfers can be transacted at these machines instead of visiting a teller at a financial institution. They are normally available for use 24 hours a day 7 days a week.


A financial institution that receives and lends money. Most banks are owned by stockholders. They offer varied products and services and are open to any consumer.

Certificate of Deposit / Share Certificate of Deposit (CD).

A type of savings account in which the funds are locked into the account for a specified period of time. Normally, since the funds are guaranteed to be in the account for a specific period of time, the account pays a higher rate of interest because the financial institution knows they can use that money for the specified period of time.

Check 21.

A federal law started October 28, 2004 affecting check clearing rules. The law allows financial institutions to use electronic image capturing and transmission technology to improve the check collection process. The process will produce an electronic check for processing versus a paper check for clearing – it will be called a substitute check. What does that mean to you? It means the Credit Union is required to accept substitute checks and the time it use to take to clear a check will be drastically reduced. For instance, you write and mail your normal mortgage payment on the last payroll Friday of the month, it used to take about 7 to 10 days or so for the money to come out of your account. Sound about right? Now you mail that check on Friday and the funds could be deducted from your account as early as Tuesday or Wednesday, depending on your financial institution. That's just a for instance, depending on your circumstances the timing could be different. Be aware, and as always, we recommend that you have the funds available in your account BEFORE you write a check.

Checking / Share Draft Account.

An account in which drafts (checks) can be written to transact financial business. It is safer than carrying cash, and shows documentation of payment.

Club Account.

A savings account designed for a specific purpose. For instance, a holiday club is a savings account that is only accessible right before the holidays, and the Credit Union vacation club only allows two withdrawals per year – thus allowing you to save for an upcoming vacation! The Credit Union offers four club account types; auto, holiday, personal, and vacation clubs.


An item of tangible value offered to a financial institution to secure a loan. For example an automobile or home.

Courtesy Pay.

Courtesy Pay is a service that adds a measure of protection to your Share Draft account. Courtesy Pay may cover you when your available account balance is negative, up to your approved limit, for a $25.00 fee per covered overdraft transaction. The $25 fee will be assessed for each item that draws your available balance negative. Note: An "Overdraft" occurs when the amount of the share draft(s) or Payment(s) exceeds the available balance in your Share Draft account. Overdrafts, up to a limit of $500 [including the amount of the overdrawn item(s) and the Courtesy Pay fee(s)], may be honored by Baltimore County Employees Federal Credit Union. You then have up to 30 days to bring the account current, either through a direct deposit, transfer of funds, or a deposit at one of our branch offices.

credit cards

Credit Card.

A plastic device used to easily borrow money to finance purchases. Using a credit card can have buyer protection benefits, as well as security features not available with a checking account. Please contact a Member Service Representative for more details.

Credit Rewards.

A program exclusive to the Credit Union. This program allows members who apply for a loan a rate consistent with their credit history. Rates are based on approved credit and members with sound credit earn our very best rates, while members with past credit issues will be eligible for a rate consistent with their credit histories and possibly a rate reduction in the future based on improved credit history. Contact a Loan Counselor for additional details.

Credit Score / Beacon Score.

Empirical mathematical equation created to calculate the probability of repayment of a debt. In other words... how you have paid your bills translated into a number that companies use to predict if you will pay future bills. The score is based on how one has managed their current and past debts, how much debt there is, how many companies are asking about the current debts, etc. For more information on Credit Scores, please refer to the article "A Healthy Credit Report" under the Education menu.

Credit Union.

A nonprofit financial cooperative that is owned and run by people who have a common bond, such as the same employer, place of worship, or geographic location. Membership is limited to those who are part of (or related to someone within) that common bond.

Custodial Account.

An account set up for the benefit of another. This account requires the funds in the account be used solely for the benefit of the named party. The named party does not have access to the funds but the funds are to be used for their benefit.

Debit Card.

A plastic device used by members to access their account at ATMs or to make purchases from participating merchants. Most convenient form of payment; gives a record of the transaction and offers some buyer protection benefits. Go to the Frequently Asked Questions section to view daily security limits.

Debit Card Overdraft Services.

Overdraft protection for the VISA Debit Card is now available. Under this protection plan, members authorize the Credit Union to pay overdrafts for ATM and everyday debit card transactions for a fee of $25 per overdraft. Without this overdraft protection, ATM and everyday debit transactions may be declined if a member makes a withdrawal without sufficient funds. To take advantage of this benefit, VISA Debit Cardholders simply complete a short sign-up form. For more details, or to download the sign-up form.


A written order to pay a sum of money. A check.

Financial Institution.

A business entity that holds accounts belonging to customers. Accounts include savings, checking, and securities brokerages. Credit Unions and banks are types of financial institutions.

money house

Home Equity Loan.

A loan secured by the home in which you own and permanently reside. This type of loan uses the value of the property minus the amount owed on the first mortgage. The Credit Union uses 85% of the appraised value minus your first mortgage. The rest is equity and can be used to obtain a loan. To calculate equity, take the probable appraised value of the home times .85; that number minus the first mortgage equals the amount available for a home equity loan. This is an excellent way to finance home improvement projects and it is possible the interest paid on this type of loan is tax deductible. (Your tax advisor can give you more information about that part.) Contact a Loan Counselor for qualifying details. For more information on home loans.

Individual Retirement Account (IRA).

A savings account set up specifically for use during retirement years. Contributing and withdrawing from an IRA has conditions based on income, age, and financial condition just to name a few. There are currently two types of IRA accounts; Traditional and Roth IRAs.


Money paid for the use of money. A credit card company will charge you interest for borrowing their money and paying it back later. A credit union will pay you interest for placing your money in a savings account so they can lend it to other members in need of a loan. They will pay you interest (called a dividend) to thank you for allowing them to use your money while it's in your account. (Your funds are always available to you.)

Joint Account.

An account in which two or more parties have an undivided interest in the whole account.


An arrangement to borrow money with interest. There are two types of loans, secured and unsecured. Secured means that collateral (something of tangible value) is pledged until the loan is paid. Unsecured is a loan that does not offer collateral.

NCUA. National Credit Union Administration.

The government agency entrusted to regulate the nation's credit unions. In addition, NCUA provides deposit insurance on members' accounts. Please note, since the inception of credit unions in the United States of America, not one credit union member has lost money they had saved in a credit union.

Payable on Death Account.

An account in which the funds remain in the original members (owner's) name and benefit until the time of their death. Upon their death, the funds shall pass to the named beneficiary. The beneficiary then has legal ownership of the funds.

hammering money with nail

Personal Club/ Escrow Account.

A savings account designed to keep funds separate from your regular savings account. Most members use this account to save for expenses they know they will have, such as automobile insurance, tuition, camps for kids, home improvement, etc.

PIN. Personal Identification Number.

A security code which allows online account access and ATM access. It is very important that this number be kept secure; access to this code allows access to your personal finances at your financial institution.

Point Of Sale (POS) Transaction.

A method of purchasing goods and services using the check card and your personal identification number (PIN).

Power of Attorney.

Legal written authority to act on another person's behalf while they are alive.

Roth IRA

An IRA created by the Taxpayer Relief Act of 1997.
This type of IRA does not allow a tax deduction for deposits made to the account. However, the money in your Roth IRA, including any interest earned, at the time of withdrawal are tax-free provided you adhere to the rules and regulations of the Roth IRA. Please contact a Member Services Representative for more information.

Savings Account.

An account established to save money for future use.

Share Account.

A savings account in a credit union. That includes a member's single share in the ownership of the Credit Union.

Substitute check.

An electronic copy of a check that is transmitted for payment instead of the paper check originally presented for payment.


Teen Checking Account.

A checking account exclusively designed and available for our 13 to 17 year old members. This account gives our teen members the financial freedom of being responsible for their own money while under the tutorage of their guardian/parent and the Credit Union. This account comes with the convenience of the VISA Debit Card, the QuickTeller phone and online access, free overdraft protection, along with other great features. Contact a Member Service Representative for additional information.

Traditional IRA.

An IRA in which deposits may be tax deductible during the year you make the deposit (contribution). Deposits grow tax free until the funds are withdrawn from the account; taxes need to be paid on the funds (and any interest accrued) at the time of the withdrawal. (The philosophy is that your income will be lower during your retirement years than it is during your earning years. Thus, deferring the tax payment until you're in a lower tax bracket.) Please contact a Member Services Representative for more information.


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