Canadian Financial, Real Estate and Mortgage Glossary

Account Agreement

Definition of account agreement

Related Terms and Acronyms:

• automatic payment   An arrangement that authorizes periodic withdrawals to be made from a chequing or savings account to pay bills, usually regular monthly payments such as for rent or mortgages.
• card holder agreement   A written agreement or contract between a credit card holder and the credit issuer that details the terms and conditions of a credit card account. This agreement must include the Annual Percentage Rate, the monthly minimum payment formula, the annual fee if applicable, and the cardholder's rights in billing disputes. Changes to the agreement can be made at any time by the issuer with prior written notice.
• combination account   An account that is part savings and part chequing. You may write cheques and you will be paid interest if you have enough money in the account.
• joint account (J/A)   A bank account owned by two or more persons who share equally in the rights and liabilities of the account.
• minimum balance to open an account   The minimum initial deposit required to open a bank account.
• number of free transactions per month   The number of transactions an account holder is allowed to make before being charged a fee. If the limit is exceeded, a per-item charge is applied. Some accounts offer an unlimited number of free transactions or no free transactions per month.
• overdraft (DR)   The amount that a cheque exceeds the available balance in the payor's account; also insufficient funds.
    ➥  Bank account transaction code.
• per item charge   A fee charged to account holders who exceed the allowable number of free transactions for their accounts. Or, the balance in an account does not meet the average monthly balance required to waive the fee.
• pre-authorized payments   A way to set up a monthly payment to be automatically paid from a bank account.
• service charge (SC)   Fees charged to customers for specific services or as a penalty for not meeting certain requirements such as insufficient funds in a chequing account.