Sometimes we mistakenly assume everyone talks like bankers talk. Like any industry, banking falls prey to the technical gobbledygook of jargon. We don’t realize we’re doing it until we answer a customer’s question by saying, “Your ACH item is showing in the memo as ‘Waiting to Post,’ which means the money is available but it hasn’t actually posted to your account yet.” We don’t even realize what we’ve done until it’s too late!
And here’s the rub: all of us, every single one, has been there.
It takes time to fully grasp the conceptual world of transactional retail banking. Even after a few years, we sometimes balk when our colleagues spiral off into the sprawling wheat fields of bank jargon. It takes time.
We promise we don’t mean to confuse you. We just get to talking and thinking like bankers instead of customers. Today we want to lift the veil on some of our technical jargon, with the hope of helping you better manage your finances.
Here are some of the most commonly used—and misunderstood—words along with our definitions. We’ve tried to make them clear and concise. The source of our definitions is Office of the Comptroller of the Currency’s online dictionary. (Sometimes, however, we thought even these definitions were full of jargon, too, so we tried to clarify them.)
Let’s get to it.
ACH ITEM: This acronymy stands for “Automated Clearing House,” which is a computer-based clearing system that processes electronic transactions between banks and financial institutions. Your paycheck is likely deposited to your account through an “ACH transaction.”
AVAILABLE BALANCE: Your available balance is your ending balance from the previous business day–plus or minus any credits or debits coming into or out of your account. We specify “business day” because your balance doesn’t update on non-business days, which are Saturdays, Sundays, and federal holidays.
BALANCE: The amount of money you have after the previous day’s business cuts off. We cut off at 5 p.m. Monday through Friday.
HOLD AMOUNT: The amount of money we’re holding—we may place a hold on a large check for a few days while we ensure the money is collectible.
LAST DEPOSIT: This refers to the last deposit put into an account from ACH deposits or negotiable instruments. We don’t count interest or returned items for last deposits.
LAST DEPOSIT TOTAL: The total amount of your last deposit(s) on that specific business day.
MEMO ACTIVITY: All items (checks, debit cards, automatic withdrawals, ACH payments and/or deposits) that are in-process for the business day. Items processed through Memo Activity haven’t been placed directly into the account yet. But the “Memo Activity” estimates what your account balance would be if they were placed into your account after the day’s transactions are debited.
*One further point about MEMO ACTIVITY: imagine you had a jar of 100 pennies. If your cousin told you she was going to give you 50 pennies to add to your jar, you would from that point on think you have 150 pennies even though you only have 100 pennies in your jar. When your cousin gives you her 50 pennies, and you physically place those 50 pennies inside your jar, then you know for sure you have 150 pennies. That’s how MEMO ACTIVITY works.
MEMO POST: This refers to all items under Memo Activity that process for that day’s business.
POSTED ACTIVITY: This shows the activity in your account for a period of days in the past. Anything in Posted Activity happened in the past. Never does it indicate current business day items.
P.O.S.: *Point of Sale—machines used to accept credit/ debit card transactions.
*Transaction made at P.O.S. machines instantly move to the account’s memo activity. They do not, however, move to posted activity until the owner of the P.O.S. machine settles all of their transactions. Most do it at the end of the day; others do it a few times per week. If the machine’s owner waits a few days to settle their P.O.S. machine, the transaction amount might be added back into the account until the machine owner settles their machine.
WAITING TO POST: See Memo Post.
Hopefully these definitions help “crack the code” that comes with our online banking services. If you think of any other words that you’d like us to define, send us a message and we’ll update our list!