Bank of First Deposit - BOFD
Say it fast: BOFD. Sounds like a noise prisoners make when the guard says, "Spread ‘em."
The bank of first deposit (BOFD) is the bank where someone first deposits a check to an account. What does this mean? Think of your paycheck. You deposit that check in your bank. If the check is from the bank in which it is deposited, it is moved locally (account to account in house). If it is from a different bank from where it is deposited, it is processed through a lengthier method...a private clearinghouse, for example.
Example: Tom's company banks at First Federal of New Hampshire. Tom's personal account is also with First Federal of New Hampshire. He deposits his paycheck into his personal account. Since the check is from and deposited into the same bank, the money moves from account A to account B, and doesn't leave the mothership, so to speak. If Tom banked at another bank, say, New Hampshire Savings and Loan, the check would go through a lengthier system to clear.
Is this the definition of "house money?"
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