Archive for the ‘ Banking ’ Category

Banking Acronyms 101

Ever received a text you didn’t understand? For example; Ur my BFF! LOL! IDK, where r u? They assume you understand all the little acronyms in the message. Well, don’t assume anything. The same goes with banking. Because I have been in banking for several years I assume everyone knows the banking acronyms as well as I do. I see them everyday, you don’t. So, here’s a small lesson in banking acronyms: 

ACH – Automated Clearing House
A computer-based clearing and settlement facility for interchange of electronic debits and credits among financial institutions.

APR – Annual Percentage Rate
The amount of interest the borrower actually pays, including loan interest points, and origination fees.

APY – Annual Percentage Yield
The amount of interest expressed as a percentage rate, a deposit account (or a share draft account) would earn in a year at a stated interest rate. The APY disclosure, showing the effect of interest compounding, assumes that funds remain on deposit for a full 365-day year at the advertised rate, and no additional deposits or withdrawals are made.

ATM – Automated Teller Machine
A computer terminal activated by a magnetically encoded bank card, allowing consumers to make deposits, obtain cash from checking or savings accounts, pay bills, transfer money between accounts, and does other routine transactions as they would at a bank teller window.

CD – Certificate of Deposit
A receipt for a time deposit  issued for a stated time period and normally paying a fixed rate of interest.

DBA – Doing Business As
A name used for business purposes that is not the legal name of the individual or organization actually conducting the business. A proprietorship commonly operates under a DBA, as in John Smith DBA John’s Auto Body.

DDL – Daily Dollar Limit
Refers to the maximum dollar amount you can withdrawal from your ATM card at an ATM within a 24-hour period.

EFT – Electronic Funds Transfer
A transfer of funds between accounts by electronic means rather than conventional paper-based payment methods, such as check writing.

EIN – Employer Identification Number
A Taxpayer Identification Number  for entities other than individuals, such as partnerships, corporations, estates and trusts.

FRB – Federal Reserve Bank
One of the 12 banks that, with their branches, make up the Federal Reserve System.

FHA – Fair Housing Act
A law enacted as part of civil rights legislation that prohibits discrimination of home sales, rentals and financing based on race, color, national origin, religion, sex, familial status or those with disabilities.

IRA – Individual Retirement Account
A tax-deferred retirement account allowing an individual to contribute a pre-set amount annually from personal income.

IRS – Internal Revenue Service
An agency of the federal government that is responsible for the administration and collection of federal income taxes.

PIN – Personal Identification Number
A numeric identification code used by bank customers when making transactions at a self-service electronic banking terminal, such as an automated teller machine.

POA – Power of Attorney
An instrument by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal.

POD – Payable on Death
A regular bank account that names a specific person as the beneficiary of all funds once the bank account holder dies.

POS – Point of Sale
A system that uses a computer terminal located at the point of sales transaction so that the data can be captured immediately by the computer system.

PR – Personal Representative
The generic term for an executor for the estate of a deceased person who left a will or the administrator of an intestate estate.

RTN – Routing Number
A numeric coding facilitating check clearing among banks. The ABA numbering system, managed by the American Bankers Association, assigns a unique identifier to each U.S. financial institution.

SBA – Small Business Administration
A United States government agency that provides support to small businesses.

TIN – Tax Identification Number
An identifying number used for tax purposes in the United States. It is also known as a Tax Identification Number or Federal Taxpayer Identification Number. It may be assigned by the Social Security Administration or by the IRS (Internal Revenue Service.)

UGMA – Uniform Gift to Minors Act
A UGMA provides a child under the age of 18 (a minor) with a way to own investments. The money is in the minor’s name, but the custodian (usually the parent) has the responsibility to handle the money in a prudent manner for the minor’s benefit. The parent cannot withdraw the money to use for his or her own needs.

UTMA – Uniform Transfers to Minors Act
The Act allows the donor of the gift to transfer title to a custodian who will manage and invest the property until the minor reaches a certain age. The age is generally 21, but is different in some states (usually 18 in those cases). In the interim, the custodian can also make payments for the benefit of the minor out of the corpus of the gift.

By Cindy Lewis, Customer Service Director

Equal Housing Lender - larger

An Interesting Alternative to Student Loans

http://www.npr.org/templates/story/story.php?storyId=129727074

I found this interview, which ran on NPR on September 8, 2010, quite interesting.  The interview is with Neoga Leviner, General Manager, Lumni Inc., a company that has created an interesting alternative to traditional student loans.

Traditionally, students borrow the money they need for college and are able to defer interest from accumulating until after their graduation.  Once they graduate, students may have thousands or dollars worth of debt to pay off – a sizeable hole that students are forced to climb out of before they can even dream about saving for a car, a house, or – gulp! – retirement.

Lumni offers students an alternative.  They will loan students up to $6,000 a year for college – not enough to completely fund a college education, but an amount meant to help bridge the gap between the amount available to the student and the amount needed by the student.  In exchange, students sign a contract to pay Lumni a percentage of their salary (the actual percent is not mentioned in the interview) for a fixed period of time, usually 10 years, after they graduate.

Lumni was started in Latin America, and this year will be making their first loans to students in the United States.  If you are going to start college soon and are forced with the dilemma of financing your education, you may wish to check with Lumni. Would this type of loan interest you?

By: Joe Geistfeld, Marketing Intern

Equal Housing Lender - larger

Tips for Saving on Bank Fees

These 3 simple tips are very basic, but worthy of a reminder and a monthly check-up.

1. Read the information you receive from your bank. Remember to check your monthly account statements for new deposits or withdrawals that you did not know about.

2. Protect yourself from overdraft fees. Keep up-to-date records of your transactions, and make sure you have enough money in your account to cover checks you have written or other types of withdrawals.  If your funds are running low, consider a cheaper alternative to overdraft protection, such as, a checking account linked to a savings account or a small dollar loan.

3. Protect yourself from ATM fees. Only withdraw cash from your own bank’s machines.  If you have to use another bank’s ATM in an emergency situation, be aware of the fees you may be charged. Also consider checking with your bank to see if any products are offered that may refund ATM fees.

By Linda Kretsch, Cashier

Equal Housing Lender - larger

FDIC Insurance Coverage

Do you feel your money is safe and protected when you walk through the doors of your bank, much safer than if you kept it under your mattress?  You should, especially if you are a customer of Citizens Bank Minnesota.  By being FDIC insured, Citizens Bank Minnesota is committed to keeping its customers money safe and protected. 

What does being FDIC insured mean?

The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your deposits if a FDIC insured bank or savings association fails. The FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s.  FDIC insurance is backed by the full faith and credit of the United States government. 

FDIC insurance covers all deposit accounts at insured banks and savings associations, including checking, NOW, savings, money market deposit accounts and certificates of deposit (CDs) up to the insurance limit.  The FDIC does not insure non-deposit products such as securities, bonds, safe deposit box contents, mutual funds or other similar types of investments that banks may offer.  The standard insurance limit is generally $250,000 per depositor, per insured bank, for each account ownership category.  The FDIC’s online Electronic Deposit Insurance Estimator (EDIE) located at:  www.fdic.gov/edie can help you determine if you have adequate deposit insurance for your accounts. 

Citizens Bank Minnesota is also participating in the FDIC’s Transaction Account Guarantee (TAG) Program.  Under that program, through December 31, 2010, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account.  Also included in this coverage are NOW accounts with interest rates no higher than .25% and Interest on Lawyers Trust Accounts (IOLTA).  This coverage is in addition to and separate from the standard FDIC insurance coverage. 

No worries when you bank with Citizens Bank Minnesota, we have you covered!

By: Stacy Merkel, Auditor

Welcome to Citizens Bank Minnesota’s Blog

Citizens Bank Minnesota is a community-owned and operated bank, with its main office located in New Ulm and branch offices in Lafayette, La Salle, and Lakeville, Minnesota. In June of 2009 we opened our newest online branch, eWorld. Chartered in 1876, Citizens Bank Minnesota is one of the oldest banks in Minnesota with over 130 years of strength and stability. We take pride in the fact that not only are we a community bank, as demonstrated by our aggressive participation and assistance in the growth and prosperity of the communities that we serve, but also that we are community-owned, with our stock widely held by residents of this area. Community ownership requires us to be sensitive to the needs of our customers and to provide our services at reasonable costs. It also allows us to be flexible to meet your unique financial needs.

Bauer Financial, an independent bank rating company, consistently awards Citizens Bank Minnesota their highest 5-Star rating. This rating is based on liquidity and several measurements or safety and security. For more information on the ratings and what they mean, click here to visit Bauer Financial.

This blog is Citizens’ newest way to keep in touch with our customers.  Each week, one of our officers will post an entry that they feel will be of value to you.  It is our hope that you will find it to be both informational and user friendly.

Your feedback is important to us. After you have toured our blog, website, and Facebook page, we would appreciate any comments you may have as to how we can make our Internet service the best possible.

We are confident that we are able to provide you with the best online banking experience available.

Sincerely,

Lou Geistfeld
President

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