REFERENCE / GLOSSARY

Banking terms in plain English

Quick explanations of common account, payment and interest terms, with questions to take back to your provider.

Editorial review: October 3, 2026 · Published by Oleksand Tsygan

Accounts and interest

Chequing account: An account generally used for routine payments and transactions. Ask which activities count toward a package’s allowance.
Savings account: An account used to hold savings and earn interest under its terms. Check rates, fees and withdrawal conditions.
Annual interest rate: A rate expressed for a year. Actual interest depends on the balance, time, calculation method and applicable conditions.
Compounding: Interest added to the balance can itself earn interest. How often this happens matters when comparing calculations.
Promotional rate: A temporary rate subject to stated eligibility and timing. Check the rate and conditions after the offer ends.
Minimum balance: A balance threshold specified in the terms, sometimes linked to a fee waiver. Ask how the threshold is measured.

Direct deposit: A payment credited directly to an account, such as payroll. The payer needs the correct instructions.
Pre-authorized debit: A payment collected from an account under an authorization. Changing account details may require contacting the payee.
Overdraft: An arrangement that may allow a negative account balance. Confirm whether it is available and what interest or fees apply.
Non-sufficient funds (NSF): A situation where available funds are not enough for a payment. Handling and charges depend on the payment and applicable terms.
Transaction allowance: The number or types of transactions included in a package. The provider’s definition determines what counts.
Fee schedule: A dated document listing charges and conditions. Read it together with the product terms.

Credit union: A financial institution organised around membership. Its structure and regulatory framework should be checked separately from those of a bank.
Merger: A combination of organisations. A legal completion date does not necessarily mark completion of every operational change.
Banking conversion: A change to the systems used to maintain or access accounts. Follow provider instructions for the affected account.
Deposit protection: A scheme covering eligible deposits under its rules. Verify the institution, product and scheme rather than assuming all accounts have identical coverage.

These are short educational explanations, not contractual definitions. The applicable documents control how a term is used for a particular account.