But if you are a casual investor or just an ordinary consumer, which ones should you know? We're just going to scratch the surface. But we think our selection of banking terms will set you out on the right track. As you get more familiar, you'll start to pick up even more of the jargon. Thus, we've taken a look at some of the most popular banking terms currently in use to find out. And the definitions below will probably give you a pretty firm grasp of the market and its lingo.

Banks have been a big part of human existence for thousands of years. Important for lending money and providing savings, these are vital institutions. There are several terms that are specifically tied to banking. But unlike some newer industries, many of these banking terms have been around a while. We'll make our best effort to touch on the phrases and acronyms that stick out the most. And these are also the ones that are most likely to impact your long term wealth. 

We'll start with one of the bad ones, at least from a consumer's point of view. And if you've ever been on the receiving end, you already know what overdraft fees are.  This is basically a financial penalty imposed on bank customers for spending more than they have. It occurs when you write a check or approve a debit transaction for more than your checking balance. That is why it is important to keep a close eye on your account. Balance your checkbook often to avoid these fees. They can vary by bank and really add up if several transactions have insufficient funds. Now, on to some more positive banking terms.

Interest rates could be heading up, which might make a savings account even more attractive. As it stands, they are typically just safe places to park money for a while.  Another benefit of savings accounts these days is the spread of online banks. Since they often save money otherwise spent on physical locations, they can pay more. And you'll typically find a higher interest rate at one of these banks. The good thing about this option is that you can do your homework ahead of time. After you research the rates available, pick the one that suits you best. Beware of associated fees and restrictions associated with withdrawals, though.

Now let's get to one of the potentially great banking terms to know. Compound interest is when the rate applies to all of your savings. This means that your initial investment plus whatever interest has already accrued would continue to grow. 

The alternative to this is non-compound interest. As you might imagine, this type of arrangement gives you the benefit of interest only on the initial investment. So if you're going for a long term savings plan, this is an important factor. Over time, an account with compound interest can earn a lot more for you.

You'll probably see APY pretty regularly among the most common banking terms. It stands for annual percentage yield. Basically, this is just referring to the percent of investment that will be added as interest. This includes all gained interest income, including when it is as a result of compound interest.

While we're here, we'll give you a two for one special. APR is probably as popular as APY among banking terms. It stands for annual percentage rate and is the income percent minus compound interest.

If overdraft fees weren't bad enough, it could get worse if you don't balance your checkbook. Businesses and other institutions might charge an extra fee on top of your bank's charge.

This can be a nominal fee to something that's even bigger than your overdraft fees. So pay special attention when you see banking terms like this one. It only serves as a warning to make sure you have enough money to cover your purchases.

Many banks offer some level of overdraft protection. Sometimes it is tied to the money available in your savings account. We suggest looking into such a program to avoid the pitfalls of these fees.

Here's another anagram that stands out among banking terms. You've probably seen FDIC stickers on the window of your local branch. It stands for the Federal Deposit Insurance Corporation.

We hope you never need its services. But in the case of a bank failure or some other catastrophe, it could save your money. The organization is controlled by the government. These days, it protects each investor up to $250,000.

Prefer a credit union to a bank? Don't worry, you're covered to. But instead of the FDIC, the National Credit Union Administration takes care of insuring deposits.

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