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Common Bank Statement Terms and their Definitions

Common Bank Statement Terms and their Definitions

Understanding Common Terms in Bank Statements

Bank statements are filled with financial terms and acronyms. Here's a detailed guide to help you navigate these terms:

Account Information

  • Account Balance
    • Current Balance: Total amount in your account at statement closing.
    • Available Balance: Funds available for use, accounting for pending transactions.

Types of Transactions

  • Deposit: Funds added to your account.
  • Withdrawal: Funds removed from your account.
  • Transfer: Moving funds between accounts or individuals.
  • Direct Deposit: Automated deposit of funds, such as salaries.
  • ACH (Automated Clearing House): U.S. network for electronic financial transactions.
  • Wire Transfer: Electronic transfer via networks like SWIFT or Fedwire.

Fees and Charges

  • Overdraft Fee: Charged when expenditures exceed account balance.
  • Monthly Maintenance Fee: Regular charge for account services.
  • ATM Fee: Fee for using non-affiliated ATMs.
  • NSF Fee (Non-Sufficient Funds): Charged for bounced checks due to inadequate funds.
  • Foreign Transaction Fee: Fee for transactions in a foreign currency.

Interest and Rates

  • Interest Earned: Amount gained in interest-bearing accounts.
  • APY (Annual Percentage Yield): Yearly earned return rate on deposit accounts.
  • APR (Annual Percentage Rate): Yearly interest rate for borrowing.

Other Common Terms

  • Statement Date: Date when the statement was generated.
  • Closing Balance: Account balance at the end of the statement period.
  • Minimum Balance Requirement: Minimum amount to avoid fees or qualify for interest.
  • Routing Number: Nine-digit code identifying your bank in transactions.
  • Ledger Balance: Balance including all posted transactions, excluding pending ones.
  • Overdraft Protection: Service to cover overdrafts, usually with a fee.


  • CD (Certificate of Deposit): Savings certificate with a fixed maturity date.
  • IRA (Individual Retirement Account): Retirement savings account with tax advantages.
  • FIFO (First In, First Out): Accounting method for assets and inventory valuation.
  • LIFO (Last In, First Out): Alternative accounting method for valuing inventory.

Understanding these terms can significantly enhance your ability to manage your finances and interpret your bank statements accurately.

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