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?"
Related or Semi-related Video
Finance: What is a CUSIP Number?119 Views
Finance, a la shmoop. What is a CUSIP number? Close that's a Cusack number
867-53-09, yeah we know there. So yeah you know when you go to the grocery
store and the cashier swipes your apples eight times across that little bar code [Apple being scanned]
reader thingy and it doesn't work again and again and again and then she finally [Error coming up on the screen]
pulls back the plastic from where the Apple was tagged hunts for her glasses [Cashier putting on her glasses]
and then visually finds the number associated with that Apple and then just
manually types it in. Well that's the fruit equivalent of a CUSIP number [Guy talking in a supermarket]
A CUSIP number is well just that only applied to securities, stocks, bonds even
muni bonds. CUSIP stands for committee on uniforms security identification [The meaning of each letter is shown]
procedures, and is basically just the serial number system of securities, but [CUSIP definition written on a 100 dollar bill]
has nine digits, the first six represent the original issuer of the security like
coca-cola shares when it went public a gazillion years ago. Then the next two [The fix 6 digits are highlighted]
characters refer to that type of security at hand like is it a basic
equity bond, muni bond and the ninth digit is riboflavin yeah it's just there
to be sure the other digits are all accurate and assures that there's no [The 3 digits meaning are shown]
replication in any of the other CUSIP index number sets. So yeah CUSIP numbers
make the securities easier to track because it's awfully hard to get a
microchip into one of them. [Microchip pulled out of a bond certificate]
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