Automated Clearing House (ACH)

An Automated Clearing House (ACH) authorization is a payment authorization that gives the lender permission to electronically take money from your bank, credit union, or prepaid card account when your payment is due. You can revoke this authorization.




Automatic debit payment

With automatic debits, you give your permission to the company to take the payments directly from your bank account. This is different than the recurring bill-pay feature offered by your bank. In recurring bill-pay, you give permission to your bank or credit union to send the payments to the company.




Deposit hold

The amount of time a bank or credit union holds funds you deposit by check is sometimes referred to as a “deposit hold” or “check hold”. Some banks or credit unions may make funds available more quickly than the law requires, and some may expedite funds availability for a fee.




Fiduciary

A fiduciary is someone who manages money or property for someone else. When you are named a fiduciary, you are required by law to manage the person’s money and property for his or her benefit, not yours.




Individual taxpayer identification number (ITIN)

An ITIN is an identification number that you get from the Internal Revenue Service. An ITIN is only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security Number.




Joint account

If you would like to enable a friend or family member to write checks and make deposits on your behalf, you might consider opening a joint account. Generally, everyone whose name is on a joint account can write checks, withdraw money, make transactions, move funds, or close the account. If one of the account holders owes money, the creditor can try to collect from money in the joint bank account.




Non-sufficient funds (NSF) fees

An NSF or non-sufficient funds fee may occur when your check or electronic authorization is not paid due to a lack of funds in your account.  This is commonly referred to as a “returned” or “bounced” check. 




Overdraft

An overdraft occurs when you don’t have enough money in your account to cover a transaction, but the bank pays the transaction anyway. You can overdraw your account through checks, ATM transactions, debit card purchases, automatic bill payments, and electronic or in-person withdrawals.

Many banks and credit unions offer overdraft protection programs in which the bank or credit union generally pays the transaction and charges you a fee (in addition to requiring repayment of the overdraft amount). Overdrafts can also be covered through a transfer of funds from a linked account, credit card, or line of credit.




Personal line of credit

A Personal line of credit is a loan that you access from time to time. You write special checks or request a transfer to your checking account by phone or online.

Like a credit card account, you have a credit limit, receive a monthly bill, make at least a minimum payment, pay interest based on your outstanding balance, and possibly pay a fee each time you use the account.

Personal lines of credit are unsecured, unlike Home Equity Lines Of Credit (HELOCs), which are backed by a mortgage on your home. Personal lines of credit are offered by banks and credit unions and usually require that you also have a checking account with the same institution.




Power of attorney

A power of attorney (POA) is a legal document that allows someone else to act on your behalf. Creating a POA is a way to appoint a substitute decision-maker and is relatively inexpensive, although it may involve help from a lawyer. 

A financial POA can be used as a tool for planning for future incapacity – the inability to make financial decisions due, for example, to dementia, traumatic brain injury, or some other impairment that affects mental function. When used for advance planning, a POA generally is “durable,” meaning it continues to be effective even if the person creating it becomes incapacitated. Continue reading to learn more about power of attorney (POA)




Representative payee

The Social Security Administration (SSA) appoints a person to be a representative payee for another person who needs help managing his or her Social Security or Supplemental Security Income (SSI) benefit payments. A representative payee can only manage the benefit checks paid by SSA. If the person receiving the benefits has other money or property that he or she cannot manage, a representative payee must have legal authority from another source to manage other funds. For example, a representative payee also could be appointed guardian of property by a court. As a Social Security representative payee, you are a fiduciary.

For more information on representative payees, read this guide on managing someone else’s money.