Deposit & banking
glossary.

Aggregation

The FDIC rule that adds together all deposits a person or entity holds at the same insured bank in the same ownership category when applying the $250,000 insurance limit.

Brokered deposit

A deposit placed at a bank by or through a third party (a deposit broker). Regulators classify and track brokered deposits separately from deposits gathered directly by the bank.

CD (certificate of deposit)

A time deposit that pays a fixed rate for a set term — from one month to several years. Withdrawing before maturity may trigger an early withdrawal penalty. CDs at insured banks are FDIC-insured up to the limit.

CD ladder

A strategy that splits cash across CDs with staggered maturities so part of the balance becomes available at regular intervals while longer terms can lock in rates.

Concentration risk

The risk of holding a large share of cash at a single institution. If that institution fails or restricts access, a larger portion of funds is affected.

Deposit administrator

A firm that places and manages deposits across multiple insured institutions on behalf of clients, maintaining records that support pass-through insurance. Ampersand acts as a deposit administrator.

Deposit Insurance Fund (DIF)

The fund the FDIC uses to protect insured depositors when a bank fails. It is financed by assessments paid by insured banks.

EDIE

The FDIC’s Electronic Deposit Insurance Estimator (edie.fdic.gov), an official online tool for estimating your deposit insurance coverage.

Excess (extended) deposit insurance

Coverage for balances above $250,000 achieved by spreading deposits across multiple insured institutions — not a larger FDIC limit.

FDIC

The Federal Deposit Insurance Corporation, an independent U.S. government agency that insures deposits at member banks up to $250,000 per depositor, per bank, per ownership category.

FDIC insurance limit

The standard maximum deposit insurance amount: $250,000 per depositor, per insured bank, for each account ownership category.

IBDDA

Interest-bearing demand deposit account — a checking-type deposit account that pays interest and allows withdrawals on demand.

IOLTA

Interest on Lawyers’ Trust Accounts — pooled accounts lawyers use to hold client funds, with interest typically directed to state legal aid programs.

Liquidity

How quickly cash can be accessed without loss. Savings and money market deposits are generally liquid; CDs are committed until maturity.

MMDA (money market deposit account)

An interest-bearing bank deposit account that typically pays more than standard savings and allows limited transactions. MMDAs are FDIC-insured; money market funds are not.

Money market fund

A mutual fund that invests in short-term securities. It is an investment, not a bank deposit, and is not FDIC-insured.

NCUA

The National Credit Union Administration, the U.S. agency that insures deposits (shares) at federally insured credit unions on the same basis as the FDIC.

Operating account

The account a business uses for day-to-day transactions such as payroll, payables and receivables. With Ampersand, your operating account stays at your current bank.

Ownership category

The FDIC classification of how a deposit is owned — such as single, joint, certain retirement, trust, or corporation/partnership — each insured separately up to the limit at the same bank.

Pass-through insurance

FDIC coverage that “passes through” an agent or administrator to each beneficial owner, so deposits placed on a client’s behalf are insured as if the client held them directly — when titling and recordkeeping requirements are met.

Qualified settlement fund (QSF)

A fund established to resolve legal claims, such as class action settlements, which often holds large balances before distribution.

Receivership certificate

A claim certificate given to uninsured depositors when a bank fails, entitling them to a share of any amounts the FDIC recovers from the failed bank’s assets.

Reciprocal deposit

A deposit a bank places at other banks through a network in exchange for an equal amount of deposits, used to extend insurance coverage for its customers.

Reserve funds

Cash set aside for future needs — capital projects, contingencies or operating reserves — and typically not needed for daily transactions.

SOC 2 Type II

An independent audit under AICPA Trust Services Criteria that evaluates the design and operating effectiveness of a company’s controls over a period of time.

Sweep account

An arrangement that automatically moves balances above a set threshold from an operating account into another vehicle, such as insured deposits at other banks or a money market fund.

Treasury management

The practices and services organizations use to manage cash, liquidity, payments and risk.

Uninsured deposits

Balances above the applicable insurance limit at a single institution. They are not covered by deposit insurance and may not be fully recovered if the bank fails.

Definitions are general information, not legal, tax or investment advice. Ampersand, Inc. is not a bank. For official deposit insurance information, visit fdic.gov or ncua.gov.