Credits And Debits

• Banking industry insiders talk in terms of debits and credits, rather than deposits or withdrawals. At the end of every business day, your account and all other accounts at the bank are balanced by tellers who ensure the total credits are offset by matching debits. When you make a deposit into your account, the deposit slip serves as a credit, and the cash or check you deposit serves as the debit. Many people believe cash and checks should count as credits rather than debits, but the bank regards checks and cash as debits because the funds are being debited from someone else prior to going into your account. Banks use various terminology, including the word "deposit," to list credits on your bank statement.
  
  

ACH

• Many of the credits on your bank account are described as ACH credits rather than deposits. ACH stands for automated clearing house, and bankers use this term to refer to various types of electronic deposits. Banks can transmit funds electronically by using your bank's routing number and your account number to direct money into your account. Transactions involving paper checks and cash are sorted in offices known as clearinghouses, so bankers use the term "automated clearing house" to describe the computer-based systems that electronic transfers pass through.
  
  

Credits

• While all deposits are technically credits, bankers tend to use the term "credit" to describe transactions in which your own bank deposits money into your account. This often happens if you incur a service charge a banker later reverses. If you have an interest-bearing checking or savings account, your monthly interest payment may appear on your statement as a "credit." When you receive a refund for a transaction involving your debit card, it also normally appears as a "credit" rather than an ACH or a deposit.
  
  

Deposits

• In many instances, the only transactions that appear on your bank statement as actual deposits are in-person deposits you made at your bank. These transactions generally involve you handing your deposit slip to a teller, and many banks allow you to view copies of your deposit slips online.
  
  Many people get confused when they see overdraft charges on their account because they appear to have made a deposit on the same day that a withdrawal posted. However, ACH deposits and bank credits normally become immediately available for use, whereas in-person deposits often do not post to your account until after the bank business day ends. Therefore, at many banks you cannot withdraw funds from an in-person deposit until the following business day. Otherwise you incur an overdraft fee.