If you’ve spent any time at a bank or on bank websites, you’ll notice they throw around a lot of words that they expect you to understand. But well, you just don’t. Here we break down some common words used in banking that will be helpful for you to know.
A BANK. This is the place where people store their money to keep it safe. A bank can also lend money to help you pay for school, or to buy things like a car or house.
A BANK ACCOUNT is where your money is held. The bank stores your money, and allows you to keep track of your account activity, or ‘transactions’.
A TRANSACTION happens when you put money in your account (deposit) or take money out (withdrawal). Paying a bill or transferring money is also considered a transaction.
An ACCOUNT BALANCE is the amount of money in your bank account at any given time.
SAVING means setting aside the money you have instead of spending it right away. Usually people save their money for big purchases or events – like college or university, a house, a big trip, a car, etc. Typically, you will put your money in a savings account or investments until you have enough to buy what you want.
INTEREST. There are two types of interest that you should be aware of. The first type is the interest that a bank pays you for keeping your money with them. Because interest is paid as a percentage of your bank balance, the more you have in your account, the more interest you get paid. The second type of interest is what the bank charges you for borrowing money.
A BUDGET. This is something that can help you keep track of money that’s coming in and the money that’s going out. A budget can help you identify what money you have available to save, spend and give.
A DEPOSIT is the money you put into your bank account. Your account balance goes up when you make a deposit.
A WITHDRAWAL is when you take money out of your bank account. Your account balance goes down when you make a withdrawal.
An AUTOMATED TELLER MACHINE (ATM) is a self-service machine where you can take care of your basic banking transactions. For example, you can deposit a cheque, pay a bill, transfer money from one account to another, or withdraw cash. You use your Client Card and PIN to access your account and make whatever transactions you need.
A PIN (or Personal Identification Number) is the special passcode you use whenever you want to use your bank card or otherwise access your bank account (like at the branch). To keep your money safe, it’s important to keep your PIN private – don’t share it with anyone!
A CLIENT CARD is also known as your bank card, and you get it when you open a bank account. It lets you access your accounts while in a branch, at an ATM or a store, or through online banking. Most of the time, you use it alongside your PIN or RBC Online Banking password.
A CREDIT CARD is a card that gives you access to a certain amount of money, known as a credit limit. When you use a credit card, the money doesn’t come out of your account right away. Rather, you have to pay off the credit card balance by a certain due date. If you don’t, you’ll get charged interest, which is a percentage of the amount you owe.
A DEBIT happens anytime money comes out of your account. For example, if you send someone an e-Transfer, or if your cell phone bill comes out of your account each month, that transaction will show up as a debit.
A CREDIT happens anytime money goes into your account. So if someone sends you an e-Transfer, or you deposit a cheque from your grandmother, that will show up as a credit.
A VIRTUL VISA DEBIT is a card used for online purchases when you don’t have a credit card. Purchases made with your virtual visa debit are taken from your chequing account.