What is a bank deposit?

A bank balance consists of the money that is kept in a bank for safekeeping. These deposits are made into deposit accounts such as savings accounts, checking accounts and market accounts. The account holder has the right to withdraw deposited funds in accordance with the terms of the account contract.

This is how a bank deposit works

The deposit itself is an obligation which is the bank’s obligation to depositors. Bank balances relate to these liabilities and not to actual deposits. When an individual opens a checking account and makes a cash deposit, he transfers legal ownership of the money and it becomes the asset of the bank. The account in turn is an obligation to the bank.

Types of bank deposits

1. Current account (deposit on request)

A checking account, also called a daily cash account, is a basic checking account. Users can withdraw the deposited money at the request of the account holder. Using a bank card, check or over-the-counter payment slip, the account holder can easily withdraw funds. Banks also charge monthly checking account fees, but these can be waived if the cardholder meets all other bank requirements, such as setting up direct deposit or multiple monthly transfers to a savings account.

2. Savings account

Savings accounts give holders interest on their deposits. However, in some cases, account holders may receive monthly fees if they do not have a certain balance or deposit amount. Although savings accounts, like checking accounts, are not linked to checks or cards, their funds are relatively easily accessible to the account holder.

In contrast, market accounts offer slightly higher interest rates than savings accounts, but account holders are more limited in the number of checks or transfers they will make from money market accounts. .

3. Call deposit account

Financial institutions call these accounts interest-bearing checking accounts, registration plus accounts, or priority accounts. These accounts combine the features of chequing and savings accounts and allow consumers to easily access their money, but also interest on their deposits.

4. Certificate of deposit / deposit accounts

Unlike savings accounts, term accounts are an investment vehicle for consumers. Also called certificates of deposit (CDs), deposit accounts tend to offer higher returns than traditional savings accounts, but the money must stay in the account for a period of time. In other countries, term deposit accounts have alternative names such as term deposits, term deposit accounts, and savings bonds.

5. Special considerations

The Federal Deposit Guarantee Corporation (FDIC) offers deposit insurance that guarantees members bank deposits of at least $ 250,000 per deposit. Member banks are required to put up a publicly visible sign stating that “Deposits are guaranteed by the full confidence and creditworthiness of the United States government.”

Why is Darwinex a great platform for you?

The best forex trading app is a technology provider that helps marketers develop their skills and achieve proven results. Our technology connects to our exchange and gives traders regulatory coverage to charge a 15% success fee. Founded in 2012, we have over 40 employees in our head office in London and our development office in Spain. You can choose Darwinex for yourself if you want to get benefits just by depositing money.

Article published in partnership with Darwinex.