The following is a useful guest post providing the definition of bank account terms used on bank statements. I find it to be useful for quickly identifying “strange” looking charges on my bank statement while reconciling my account.
You guys do reconcile your accounts, right? Anyway, on to the guest post:
Definition of Bank Account Terms
Have you ever looked at your bank account and seen a transaction type or a payment you didn’t recognize? Even if it’s money coming in rather than going out, it can still be alarming if you don’t know exactly what’s happening with your bank account if you don’t know the definition of bank account terms.
Common Abbreviations On Bank Statements:
The following are a few of the common abbreviations used on statements for most current accounts and details of what they mean. These definitions of bank account terms should help you to make some sense of your statement.
- BAC – this is a form of automated credit. For most people, this is the method through which their wages or salary will be paid into their bank accounts.
- CHP/CHQ – these are both abbreviations for another form of electronic credit transfer called CHAPS, one which isn’t free like BACs but which takes place the same day
- CHQ – this abbreviation stands for check, which you will have paid into your account
- D/D – this is a Direct Debit, which is a regular payment taken from your account by a third party with your agreement. Most people use Direct Debits to pay bills and make other regular payments.
- ATM – this stands for Automated Teller Machine and refers to a transaction in which you withdraw cash from your current account from a cash machine or cash dispenser
- INT – this is an abbreviation referring to interest, which is either earned or incurred on your bank account balance
- ITL – this stands for International and refers to a money transfer from your current account to one outside of the UK
- OTR – this refers to an Online Banking Transaction. If you open a bank account online and have signed up to Internet banking, you can make transactions between accounts or to third parties.
- POS – this stands for Point of Sale and means that you have made a purchase and payment with your debit card within a shop or other business.
Fat Guy here: So now you have don’t have an excuse for not reconciling your bank account. You can use this glossary of bank terms to help you match up any entry that you don’t recognize to the proper expense. Of course, if you notice a charge that you didn’t make, you need to contact your bank and the merchant as soon as possible (except Wells Fargo, since they don’t care about identity theft)!
photo credit: Freedigitalphotos.net
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