Lorem Ipsum

by Lorem Ipsum

Are Credit Unions Safer than Banks

Banking Terms and Definitions

  • Account Balance: The amount of money in an account at any given time.
  • Available balance: The amount of money you have in your bank account that is available to spend or withdraw.
  • APR (Annual Percentage Rate): The annual rate charged for borrowing or earned through an investment, which includes fees and additional costs.
  • APY (Annual Percentage Yield): Reflects the amount of interest earned on an account over a year, taking into account the effect of compounding.
  • Certificate of Deposit (CD): A savings certificate with a fixed maturity date and specified fixed interest rate.
  • Savings Account: A bank account that earns interest and is typically used for the long-term deposit of money.
  • Grace period: A certain amount of time when a borrower can delay making a payment on a loan or credit card account without paying a penalty or incurring interest charges. It can also refer to the period after the maturity date of a certificate of deposit when you can withdraw funds without penalty.
  • Maturity date: This is the date of expiration for the contractual obligation of a financial instrument. For example, certificates of deposit have a maturity date that depends on the length of the CD term.
  • Minimum Balance: The minimum amount of money that you are required to keep in your bank account to avoid fees or to qualify for certain benefits, like a higher interest rate.
  • Principal: The original sum of money borrowed in a loan, or put into an investment, exclusive of any interest or dividends.
  • Money Market Account (MMA): An interest-bearing account that typically pays a higher interest rate than a savings account and provides the account holder with limited check-writing ability.
  • New Money: Funds brought to the credit union from another financial institution or that have not been on deposit prior to the account opening.

NCUA insurance refers to the protection provided by the National Credit Union Administration (NCUA) for deposits held in federally insured credit unions in the United States. Similar to the insurance provided by the Federal Deposit Insurance Corporation (FDIC) for banks, the NCUA insures the savings of depositors up to at least $250,000 per individual depositor, per insured credit union, for each account ownership category.