Banking Terms

ACH Processing (Automated Clearing House) - ACH processing occurs between a nationwide network of financial institutions that send electronic messages, via telecommunication lines instead of paper (checks), to transfer money between two parties. The most common ACH transactions are direct deposits and automatic debits.

Automated Teller Machine (ATM) - A machine that allows the customer to perform common teller transactions, such as cash withdrawals, deposits, and transfers. ATM's are usually accessible 24 hours a day, 7 days a week.  A worldwide network of ATM's gives the customer access to their account around the world.

Certificate of Deposit (CD) - A deposit account with a fixed minimum term, minimum initial deposit ($500 at First National), and fixed interest rate. Generally, CD's offer a higher interest rate than other deposit accounts. Our current rate for CD's are now available on our rates table.

Compound Interest - Interest that accrues when earnings for a specific period are added to principal; thus interest for the following period is computed on the principal plus accumulated interest.

Credit Cards - A plastic card that can be used by the card holder to make purchases or obtain cash advances using a line of credit made available by the card issuing financial institution.

Daily Compounding - A frequency of calculating interest whereby interest is added to the principal each day.

Direct Deposit - A pre-authorized system in which customer's payroll, governmental benefits, or other payments are automatically deposited to their checking or savings accounts. Some types of Direct Deposits are social security, SSI, VA benefits, annuities, payroll checks and dividend checks.

Education IRA - An investment tool created for the purpose of paying for the future cost of a child's post secondary education. Contributions and their earnings are tax free when withdrawn to pay for qualifying education expenses.

Individual Retirement Accounts (IRA) - Two types to choose from for eligible individuals, the Traditional IRA and Roth IRA.

Money Market - A deposit account offered by financial institutions that is designed to be directly equivalent to, and competitive with money market mutual funds. These accounts, unlike mutual funds, are FDIC insured.

Money Order - Equivalent to a Cashier's Check.

NOW Account - A deposit account, similar to a checking account, from which the account holder can withdraw funds by writing a negotiable order of withdrawal (NOW) payable to a third party and which can earn interest.

Online Banking - Personal and business account information accessible through a personal computer connected to the internet in a secure environment.

Overdraft Protection - A service that helps prevent the customer from overdrawing their checking account by transferring funs from their savings to checking as needed for a fee.

Personal Identification Number (PIN) - A secret number or code used by the account holder to authorize a transaction or obtain information regarding an account. Your First National Bank & Trust Visa Debit Card requires a PIN for ATM transactions and a PIN is required to access the FNB INFO Line. First National does not know your Visa Card PIN and if you have ever changed you PIN for the FNB INFO Line, we do not know your new PIN.

Regular Savings Account - A form of deposit account with no legal limits or requirement as to amount, duration, or times of additions or withdrawals.

Roth IRA - Contributions are not deductible but distributions can generally be withdrawn tax free.

Signature Card - A form, executed by an account holder, establishing account ownership and setting forth some of the basic terms of the account and provisions of the deposit contract.

Tax Identification Number (TIN) - The number used to identify an individual or entity for federal income tax purposes.

Traditional IRA - Contributions may be partially or fully deductible, but distributions are generally taxable.

Uncollected Funds - Funds that have been deposited in an account or cashed against an account by a check that has not yet been cleared through the check collections process and paid by the drawee bank. Financial institutions typically place a temporary hold on their customers' uncollected funds, making those funds unavailable for withdrawal until the time period of the hold expires.

Uniform Transfer to Minors Act - An act that sets forth provisions for giving a minor an intangible gift (e.g., bank accounts, stocks, or bonds) that results in income shifting with an adult serving as custodian. The custodian has direct control over the gift and can sell and reinvest proceeds from the gift for the minor with the minor recognizing any gain and/or annual income that results.

Wire Transfer - An electronic transfer of funds from one financial institution to another.