Banking and Financial Terms

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Bank

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A financial institution licensed to receive deposits and provide financial services.

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Federal Deposit Insurance Corporation

(FDIC)

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Independent federal agency that insures deposits in bank accounts up to $250,000.

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National Credit Union Administration

( NCUA)

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Independent federal agency that insures deposits in credit unions up to $250,000.

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Unbanked

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People who don’t have bank accounts.

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Underbanked

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People who have savings or checking accounts but still use alternative financial products and services.

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Retail Banks

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For-profit financial institutions that accept deposits and offer a variety of deposit accounts and financial services.

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Credit Unions

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Nonprofit financial institutions that are owned and operated by their members; offer deposit accounts and lending services similar to a retail bank but at a lower cost.

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Online Banks

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Also known as internet banking; all transactions done online; no physical location.

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Overdraft Protection

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An option offered by banks to cover overspending an account and then charge a fee for it.

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Overdraft Fee

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A penalty charged if the account holder spends more than their account balance, causing the available balance to go below zero.