Internet Bank Key Terms

Know the terminology associated with online banking accounts before opening an account

Like any business, Internet banks use a little bit of jargon that can sometimes make it hard to understand account specifics. Before you invest your money with an Internet banking institution, invest a little time to understand they language they use.

Many of the Internet bank key terms are the same as terms used by conventional banks. However, terms such as pending transactions and posted transactions, are common for online banks. Consider the following suggestions to help you understand the terminology:

1. Read the definition of online banking to determine if the service is appropriate for you needs.

2. Know the terms associated with deposits into an online banking account.

3. Get to know terms that are less common in the online banking industry.

 

Know the definition of online banking

In some cases, Internet banks only have services offered online. In other cases, the online banking account is simply an extension of an account with a conventional bank. Many online banks also offer telephone, email and text support for customers who need assistance that isn't regularly available online.
Try: Investor Glossary offers an easy to understand definition of online banking. This website also offers definitions of many other financial and investing terms. You can find a detailed definition of Internet banking, along with the benefits and drawbacks of online banking, at wiseGEEK.

Understand common deposit terms for online banking accounts

There are numerous types of deposits that can be made into an Internet banking account. Knowing the difference between the types can save you a considerable amount of hassle and a few headaches. An ACH deposit, or Automated Clearing House deposit, is an electronic deposit that posts to your account through the National Automated Clearing House Association, which services payroll services and online merchant accounts, such as PayPal.
Try: Investopedia.com offers information on common online banking terms, including deposit terms such as transaction deposit. Investor Words offers definitions about common deposit types, including deposit in transit, which is a deposit made to an account but hasn't yet entered the bank system.

Familiarize yourself with lesser known Internet bank account terms

Besides understanding what an online banking account is and the types of deposits, there are also some other terms with which you must familiarize yourself. For example, asset backed security is when a bank or lending institution uses your assets, such as your online banking accounts, as insurance that a debt or loan can be covered in the event you fail to pay it as scheduled.
Try: Bankrate.com offers detailed information about Internet checking accounts and Internet savings accounts, including explanations of some common online banking transaction terms. AllBusiness.com offers in depth definitions to help you fully understand the ins and outs of Internet banking terminology. American Banker offers a comprehensive banking glossary that includes easy to understand explanations of common online banking terms.

 

• When you are reading documents associated with your Internet bank accounts, make sure you fully understand the document prior to accepting the terms. If you don't understand something, contact the customer service department of the online banking institution.

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