A bank is a financial institution that offers its clients services that enable them to manage their money. In order to cater for the uniqueness of each client, they have categorized their services into different sections so as to better address the needs of each client. One of those categories is Personal Banking.
Personal banking is a type of banking service offered by banks that is specific to retail clients. A retail client is an individual customer. Personal banking products include:
- Current account transaction facilities such as a direct transfers, debit cards and over-the-counter services
- A savings account
- A fixed interest deposit account
- Debt facilities such as loans, mortgages and credit cards
- Remittances and foreign currency services
The clients of personal banking products are commonly the general public, that includes, adult individuals, retirees, students and children. According to the requirements of the bank, they may be citizens, residents and non-residents. If one is an affluent individual, they may also be offered private personal banking services which can include more sophisticated services and investments, but at a higher cost.
The list below aims at expounding on some personal banking jargon:
- Bank Statement: A periodic account of a customer’s deposit account showing all the transactions within the period as well as the current balance.
- Beneficiary: A person who is entitled to receive certain benefits.
- Bankers Cheque: A cheque provided to a customer of a bank that is drawn by the bank and payable through or at a bank.
- Cheque: An instruction of a transfer of money from that drawers account to the payee’s account.
- Credit Card: A card with a magnetic strip that allows consumers to take small loans upon usage to buy goods and services. The bank or financial institution pays the merchant and the customer gets a bill at the end of the month.
- Deposit: Money placed into the bank for safe keeping.
- Debit: When money is drawn out of your account
- Debit Card: A card with a magnetic strip that allows the consumer electronic access to their bank account at all times.
- Drawer: The person who writes a cheque instructing the drawee bank to pay someone else
- EFT: Electronic Funds Transfer is the transfer of money between accounts by a consumer electronic system.
- Inactive Account: An account that has little or no activity, neither deposits nor withdrawals that have been posted for a long time.
- Individual Account: An account in the name of one individual.
- Insufficient Funds: When a depositor’s checking account is inadequate to pay a cheque presented for payment.
- Interest Rate: the cost of borrowing money expressed as a percentage usually for over a period of one year. The rate may be fixed (unchanging) or variable (based upon an index or market condition).
- Joint Account: An account owned by two or more persons.
- Minimum Balance: The amount of money required to be on deposit in an account to qualify the depositor for certain services or to waive a service charge.
- Overdraft: When the amount of money withdrawn from a bank account is greater than the amount actually available in the account.
- Truncation: A cheque truncation system is an image based clearing system that converts the physical cheque into electronic form for transmission to the paying bank and thus enables the faster clearing of cheques. In Kenya it takes two working days to clear a cheque.