Financial Terms

Automated Clearing House (ACH)
A computer-based interchange for clearing deposits and payments electronically.


ATM
Automated Teller Machine. An unmanned electronic device that performs basic teller functions, such as accepting deposits, cash withdrawals, and account balance inquiries.


Annual Percentage Rate
The cost of credit for personal loans, expressed as a percentage per year.


Annual Percentage Yield
The amount of interest earned on a deposit account (checking, savings, CDs, IRAs), including the effect of interest compounding, assuming funds remain in the account for one year.


Annual Report
Companies send their shareholders an annual report at the end of a fiscal year. The magazine or brochure sizes up company operations and displays earnings, sales, balance sheets and financial footnotes.


Annuity
A contract between an insurance company and the annuity purchaser. Annuities are designed to provide payments to the annuity purchaser at specified intervals and are tax deferred until distribution begins or a withdrawal is made.


Available Balance
The balance of an account including deposits or withdrawals presented today.


Average Balance
The average amount in a deposit account that equals the sum of the daily balances during an accounting period, usually a month, divided by the number of days in the period. Can sometimes be used to avoid service charges or to qualify for special services. See also, minimum daily balance.


A2A Transfer
Money that is withdrawn or deposited from a Hancock account and transferred into or from a different account at another bank. This feature is only available through Online Banking.


Capital Gain
The profit earned from the sale of a capital asset, such as real estate or stocks. A capital gain is not "realized" until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on the owner's income tax return for the year in which the asset was sold.


Canceled Check
A check that has been paid and charged to the depositor's account.


Card Activation
A security process developed to prevent losses from fraudulent use of new and reissued bankcards stolen from the mail. The process requires the cardholder to take steps to confirm their identity upon receipt of credit card.


Cashier's Check
A check drawn by a bank on itself, signed by the cashier or other authorized officer.


Check Card
A plastic card issued by a bank which customers can use to pay for purchases anywhere VISA® is accepted; money is deducted from a designated checking account. Can also be used at ATMs. Sometimes referred to as a debit card.


Certificate Of Deposit (CD)
A certificate issued by a bank or other financial institution that pays interest at a specified rate and that matures within a specified time frame. A CD typically pays a higher rate of interest than a standard savings account. Certain deposits are FDIC-insured up to applicable limits.


Compounding
Interest added to interest previously earned on a principal balance. The more frequently interest is compounded, the higher the effective yield.


Credit
A financial term that refers to an increase in a deposit account (such as a deposit made to the account).


Credit Card
A card that enables the user to purchase goods and services and obtain cash against a line of credit established by the credit card issuer.


Current Balance
The balance of an account after last night's processing has occurred. This balance does not fluctuate during the day.


Debit
A financial term that refers to a decrease in a deposit account, such as writing a check against the account.


Direct Deposit
Electronic deposit of wages or benefits, such as payroll or social security, into a personal bank account; deposits are handled through the ACH.


Equity
The difference between the fair market value and the amount owed on your mortgage loan, also referred to as "owner's interest."


Equity Line
A revolving line of credit secured by your home and based on the available equity in your home. Also known as a home equity line or HELOC.


Equity Loan
A fixed-term loan secured by your home and based on the available equity in your home. Also known as a home equity loan.


Funds Transfer
Money that is withdrawn from one Hancock account and transferred into a different Hancock account.


Guardian
An individual or a trust institution appointed by a court to care for the property or the person (or both) of a minor or a person who is adjudged incapable of handling his or her own affairs. In some states the term committee, conservator, curator, or tutor is used to designate one who performs substantially the same duties as a guardian.


Individual Retirement Account (IRA)
A retirement account to which you can contribute up to $5,500 (or 100% of your compensation, whichever is less) in 2014. Individuals age 50 and older may also be eligible to make an additional $1,000 catch-up contribution for 2014. IRAs give your money the potential to grow tax deferred and, depending on your personal circumstances, contributions may be tax deductible (withdrawals prior to age 59 1/2 may be assessed a 10% IRS penalty). Withdrawals from IRAs are taxed at then-current rates and are subject to the bank's early withdrawal penalty.


Interest Rate
The rate paid on an interest-bearing account, such as savings, CDs and some checking accounts; also, the rate charged on a loan or line of credit. Different types of accounts and loans pay or charge different rates of interest.


Ledger Balance
The balance in an account at the beginning of each day, also known as the current balance; includes all deposits and withdrawals that were posted from the previous night, whether or not funds have been collected.


Lien
A legal claim against a property that must be paid before the property is transferred.


Mortgage
A legal document that pledges real property to the lender as security for repayment of a debt.


Mobile Banking
The ability to easily and securely use your mobile phone to do financial transactions such as check balances, view transaction history, transfer funds, and search for an ATM/branch.


Money Order
An official check of the bank sold for a fee to a person who wishes to send money by this medium.


NSF (Non-Sufficient or Insufficient Funds)
A situation in which a check (or other type of withdrawal) may not be paid because the balance in the account is less than the amount of the withdrawal.


Online Banking/e-Banking
Access account information and perform various transactions between eligible Hancock accounts online.


Online Bill Pay/e-Pay
Pay bills online using the Internet via Hancock's Bill Pay service.


Overdraft
When the amount of a paid check or other withdrawal exceeds the available balance in a checking account.


Point of Sale (POS)
A purchase made with your debit card in which you enter a personal identification number (PIN).


Roth IRA
An individual retirement account to which you may be able to contribute up to $5,500 in 2014. Individuals age 50 and older may also be eligible to make an additional $1,000 catch-up contribution for 2014. Contributions are not tax deductible, but any growth is tax free and qualified withdrawals may be tax free; however, withdrawals are subject to the bank's early withdrawal penalty. Certain income restrictions apply.


Savings Bond
Bonds issued by the U.S. Treasury, typically in amounts ranging from $50 to $10,000. Savings bonds are non-callable—which means the government cannot retire them before the maturity date—and are also nontransferable—which means that bondholders cannot transfer them to someone else. Because savings bonds are backed by the full faith and credit of the federal government, many investors consider them to have relatively low investment risk.


Service Charge
A fee charged by the bank for a service rendered to the depositor, usually refers to maintaining an account.


Time Deposits
A type of relatively low-risk savings vehicle, such as a certificate of deposit, with maturities typically ranging from seven days to several years. Time deposits often pay a higher interest rate than traditional savings accounts, but you may face penalties for withdrawing money before maturity.


Traditional IRA
A retirement account to which you can contribute up to $5,500 (or 100% of your compensation, whichever is less) in 2014. Individuals age 50 and older may also be eligible to make an additional $1,000 catch-up contribution for 2014. IRAs give your money the potential to grow tax deferred and, depending on your personal circumstances, contributions may be tax deductible (withdrawals prior to age 59½ may be assessed a 10% IRS penalty). Withdrawals from IRAs are taxed as ordinary income and are subject to the bank's early withdrawal penalty. Certain income restrictions apply.


Trust
A legal entity wherein one or more persons manage properties or funds for the best interest of someone else.


Trustee
The person who manages a trust property or fund.


Wire Transfer
An electronic payment service for transferring funds by wire (for example, through the Federal Reserve Wire Network or the Clearing House Interbank Payments System).


401(k) Plan
An employer-sponsored investment plan for retirement. Employees contribute to the plan, and all contributions and any earnings grow tax deferred until withdrawal. Withdrawals prior to age 59½ may be subject to a 10% penalty. Employers may match a portion of employees' contributions.