What do Those Letters Mean?

Have you ever felt like there’s a secret school that teaches acronyms?  Maybe you think that you must have been absent that day in school when they covered what APR, APY, NCUA, EFT, SSN, ME, YTD and a hundred other acronyms stand for?  Well today is your lucky day!

Acronyms certainly make life easier and conversations shorter… for the people who know what they stand for!  At Truliant, we’ve put forth great effort to not use financial jargon or acronyms that may be confusing. 

Below you will find a few acronyms that are used commonly in conversations and what they mean. My goal is to not only help you understand what they stand for, but to also help you understand what they mean.  Here goes. . .

APR (Annual Percentage Rate):  This is the yearly cost of a loan.  This is different from interest rate in that it also includes any fees or costs (including interest) associated with a loan.  APR is important; it shows you the true cost of borrowing.

APY (Annual Percentage Yield):  This is the yearly rate of return on an investment (deposit).  This is the rate that your money earns when deposited into an interest bearing account. 

EFT (Electronic Funds Transfer):  This refers to the method by which funds move from institution to institution.  As opposed to a paper check, an EFT is a quicker and more secure method of payment.

NCUA (National Credit Union Administration):  This is an independent federal agency that charters and supervises federal credit unions.  A part of its function is administration of the NCUSIF which is backed with the full faith and credit of the United States government.

NCUSIF (National Credit Union Share Insurance Fund):  Working parallel to the FDIC this fund insures members deposits in all federally chartered and the majority of state chartered credit unions.

SSN (Social Security Number):  I think you know what your Social Security Number is.  Why is this important?  Many services, products and applications may ask for your SSN.  If this is a required field, find out why.  Your SSN should still be treated as private information.  A lot of identity theft still begins with people giving out information that opens the door for thieves.

YTD (Year to Date):  Okay, we gave you an easy one.  However, many people may not know that YTD is often used on statements and other communications to reflect earnings or cost for the year.  Naturally, YTD changes as each statement cycle is completed.

There are literally hundreds of these that we could go through.  If you have any specific requests, please contact us directly or simply post to the blog.

About the Author: Donnie Peaks is the director, deposit services for Truliant  and is responsible for all consumer and commercial deposit accounts and products (checking, saving, money market, certificates, etc.).