Banking Terms Glossary

Adjustable-Rate Mortgage (ARM)
Adjustable-Rate Mortgages (ARMs) feature interest rates that adjust with time and may be lower initially than fixed-rate mortgages. You can choose an initial adjustment period of 5, 7 or 10 years, and your down payment could be as low as 10%.

Advantage 50 Interest Checking
An account that is a great option for individuals 50 years old or older with a minimum requirement of $50 to open and a $0 minimum required balance and monthly service charge. This account provides free personalized checks for life, a debit card, free monthly eStatements, direct deposits and automatic payments, online bill pay and access to the Online and Mobile Banking app.

Amortization
The process of paying off a loan over time in equal installments.

Automated Clearing House Network (ACH Origination)
ACH Origination is the process of creating and initiating payment transactions through the ACH network. ACH electronically issues payments to or from an external account. This secure process takes away the guesswork of when a transaction is going to post to another account and can save you time from issuing checks.

AutoPay
AutoPay is a feature that automatically pays a bill on a scheduled date.

Annual Percentage Rate (APR)
Annual Percentage Rate (APR) is the yearly interest rate plus any fees charged by a lender when a loan is made and is a more complete measure of a loan’s cost compared to interest rate alone.

Annual Percentage Yield (APY)
Annual Percentage Yield (APY) is the actual rate of return that will be earned in one year if the interest is compounded, and the more interest is compounded, the higher the APY will be. The APY on checking, savings, or certificate of deposit holdings will vary across products and may have a variable or fixed rate.

Automated Teller Machine (ATM)
An ATM is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch teller.

Bill Pay
The fastest, easiest way to pay all your bills through Online and Mobile Banking.

Bridge Loan
The equity in your current residence helps finance your next residence, which helps reduce the stress of coordinating the home sale and the purchase date.

Cash Flow
Cash flow is the net cash and cash equivalents transferred in and out of a company. Cash received represents inflows, while money spent represents outflows. A company creates value for shareholders through its ability to generate positive cash flows and maximize long-term free cash flow.

CardSwap Subscription Services Management
This tool allows you to update or change the payment info of your favorite streaming and shopping services in one place at the same time within Online and Mobile Banking.

Certificate of Deposit (CD)
A CD is a high interest bank account that’s FDIC-insured up to $250,000 and has a predetermined period of time where funds must be left in the account to accumulate interest. The maturity period ranges from a few months to a few years.

ClickSWITCH
A quick, fully digital, automated direct deposit switching that allows you to decide how and which account your direct deposit lands in. This tool is available through Online and Mobile Banking.

Compound Interest
Compound Interest is a form of interest that applies not only to the initial principle of an investment or loan, but also to the accumulated interest from previous periods. Compound interest involves earning, or owing, interest on your interest. It also helps a sum of money grow faster than if just simple interest were calculated on the principle alone. For savings and investments, compound interest is beneficial as it multiplies your money at an accelerated rate, but if you have debt, compound interest on the amount you owe can make it increasingly difficult to pay off.

Credit Expert
Your credit score is an important piece of your financial wellness.  With Credit Expert powered by SavvyMoney™, you can check your credit anytime, anywhere, within Online and Mobile Banking.

Digital Wallet
A digital wallet is an app that stores payment information in the cloud so you can make purchases with your mobile device. You can use a digital wallet to store debit and credit cards, gift cards, digital tickets, e-vouchers, passports, hotel reservations, concert tickets, coupons, and loyalty rewards cards.

Direct Interest Checking
A digital wallet is an app that stores payment information in the cloud so you can make purchases with your mobile device. You can use a digital wallet to store debit and credit cards, gift cards, digital tickets, e-vouchers, passports, hotel reservations, concert tickets, coupons, and loyalty rewards cards.

Escrow
Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met – like the fulfillment of a purchase agreement.  It works as a way to protect both the buyer and the seller during the home buying process.

eStatements
An eStatement, or electronic statement, is a digital version of a bank statement that has been sent to your online banking account when it’s available. eStatements have the same information as traditional statements but without the paper waste, and can be viewed, downloaded, and printed at your convenience.

External Transfer
Easily and safely transfer funds between your accounts at Blue Grass Federal and your accounts at other financial institutions.

Fannie Mae HomeReady Mortgage Loan
With a Fannie Mae HomeReady Loan, your fixed-interest rate is designed to make home ownership more accessible for borrowers with low to moderate-low incomes. Includes features like more affordable financing, flexible terms, and 3% downpayment.

Fixed Rate Mortgage
With a Fixed Rate Mortgage, your interest rate stays the same for the life of the loan. Available with 30-, 20-, 15- and 10-year terms, these fully amortizing loans come with no pre-payment penalty, and down payments can be as low as 3%.

Foreclosure
Foreclosure is a legal process that allows lenders to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Usually, the default is triggered when a borrower misses a specific number of monthly payments, but it can also happen when the borrower fails to meet other terms in the mortgage document.

Freddie Mac Home Possible Mortgage Loan
The Freddie Mac loan program is designed to make home ownership a reality for very-low to low income borrowers with affordable financing and flexible terms. 

Health Savings Account
A Health Savings Account (HSA) is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. You may be able to lower your out-of-pocket healthcare costs by using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and other expenses. The money in the account bears interest, and you can withdrawal funds at any time for qualified medical expenses.

Home Equity
A Health Savings Account (HSA) is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. You may be able to lower your out-of-pocket healthcare costs by using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and other expenses. The money in the account bears interest, and you can withdrawal funds at any time for qualified medical expenses.

Home Equity Line of Credit (HELOC)
With a HELOC, the equity in your home that can be leveraged to give you an open line of credit.

Individual Retirement Plan
An Individual Retirement Account (IRA) is a tax-advantaged savings account that can help you save for retirement. IRAs offer a range of investment options and can help you accumulate more wealth than a traditional savings account, and can be a smart way to invest in your retirement.

Interest Rate
An interest rate is the cost of debt to the borrower and the rate of return to the lender. The money to be repaid is usually more than the borrowed amount since lenders require compensation for the loss of use of the money during the loan period.

Money Market Account (MMA)
A Money Market Account is a savings account that pays interest based on the current interest rates of the market.

Money Market Special
An account that often offers a high interest rate and requires a larger balance.

Mutual Bank
A mutual bank is an institution that is insured by the Federal Deposit Insurance Corporation (FDIC) and allows customers to maintain accounts with low balances while earning interest. Mutual banks do not have outside shareholders like traditional banks, so customers with accounts are considered “owners” in the bank. 

Online Banking
Online Banking is a method of banking in which someone can access and view their account via the internet as well as conduct transactions without having to visit a branch.

Ohio Housing Finance Agency (OFHA) Grants
The OHFA grants provide down payment assistance for qualified Ohio residents including first time homebuyers, recent grads, Ohio Heroes and others. OHFA Grants can also be used with conventional fixed-rate or FHA loan programs.

Positive Pay
Positive Pay is an easy way to make sure that you’re paying the right person the right amount by alerting your banker which companies, vendors or individuals need access and are allowed to take money from your account. If the information matches what you’ve provided, a withdrawal will be made.

Preferred Interest Account
A Preferred Interest Account is a type of checking account that offers interest on collected balances and competitive interest rates.

Prime
Prime refers to a prime rate that is the interest rate banks set for loans, credit cards, and lines of credit.  It is also known as the U.S. Prime Rate or Wall Street Journal Prime Rate. This rate is typically around 3% higher than the federal funds rate.

Remote Deposit
Remote deposit acts as your business assistant, allowing you to scan and deposit multiple checks at a time using a machine that’s connected to your computer.

Roth IRA
A Roth IRA is a type of Individual Retirement Account (IRA) that allows you to contribute after-tax dollars. These contributions and earnings can grow tax-free, and you can withdraw them tax-free and penalty free after age 59 ½ and once the account has been open for at least five years. Your Roth IRA account can earn interest, adding to your balance even in years when you aren’t able to contribute.

Simply Free Checking 
A free account ideal for people under 50 years old with less than $1,500 in the account. The minimum amount required to open this account is $50 with a $0 required balance and monthly service charge. This account also gives you a free first box of personalized checks, a debit card, monthly eStatements, online bill pay and access through the Online and Mobile Banking app.

Statement Savings Account
A savings account for everyone. The minimum amount required to open this account is $10 and the $1 monthly fee is waived if the account has more than $100 deposited.

Select Money Market Account
An account with a higher interest rate compared to other savings accounts. The minimum amount required to open this account is $10,000 and the $10 monthly fee is waived if the account has more than $10,000 deposited.

Sweeps
Sweeps simplify money transfers so you don’t have to move funds between accounts manually – sweeps do it automatically.

Treasury Management
Treasury Management is the act of managing a company’s daily cash flows and larger-scale decisions when it comes to finances. A streamlined cash flow is key for a successful business and Treasury Management services can help you manage yours easily and securely. This is also referred to as Cash Management.  

Variable Rate
A variable rate, also known as an adjustable or floating rate, is an interest rate that changes over time based on an underlying benchmark interest rate or index. These rates are common for credit cards, private student loans, home equity lines of credit, and personal loans.

Wire Transfer
A wire transfer is an electronic transfer of funds via a network that’s administered by bank and transfer service agencies around the world. Wire transfers are sent by one institution and received by another that require information from the party initiating the transfer, like the recipient’s name and account number.

Zero Balance Account
Zero balance accounts are primary accounts that are designed to prevent overdrafts and manual fund transfers while carrying a zero balance.

401k
A 401k is a retirement savings plan that allows employees to contribute a portion of their wages to individual accounts. These plans are tax-advantaged and offered by employers where employees can choose how much money to contribute based on a percentage of their income. The money in these accounts is invested and can potentially grow tax-free over time.

529 Savings Plan
A 529 Savings Plan is a tax-advantaged account that can be used to pay educational expenses from kindergarten through graduate school. These plans can help families pay for schooling through education savings plans and prepaid tuition plans, typically under the control of the donor.