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Bank Deposits

Definition
A bank deposit is money that’s placed in a bank account such as a saving or checking account.

What Are Bank Deposits?

Bank deposits consist of money placed into banking institutions for safekeeping. These deposits are made to deposit accounts such as saꦍvings accounts, checking accounts, and money market accounts at financial institutions. The account holder has the right to withdraw deposited funds, as set forth in the terms and conditions governing ꦓthe account agreement.

Key Takeaways

  • Saving and checking accounts accept bank deposits.
  • Most bank deposits are insured up to $250,000 by the FDIC. 
  • Bank deposits are considered either demand (the bank is required to return your funds on demand) or time deposits (banks ask for a specified time frame for accessing your funds).
Bank Deposits

Investopedia / Mira Norian

How Bank Deposits Work

The 澳洲幸运5开奖号码历史查询:deposit itself is a liability owed by the bank to the depositor. Bank deposits refer to this liability rather than to the actual funds that have been deposited. When someone opens a bank account and 澳洲幸运5开奖号码历史查询:makes a cash deposit, they surrender the legal title to the cash, and it becomes an asset of the bank♎. Inᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚ turn, the account is a liability to the bank.

Types of Bank Deposits

Current (Demand Deposit) Account

A current account, also called a 澳洲幸运5开奖号码历史查询:demand deposit account, is a basic checking account. 澳洲幸运5开奖号码历史查询:Consumers deposit money, and the deposited money can be withdrawn as the account holder desires on demand. These accounts often allow the account holder to withdraw funds using bank cards, check෴s, or over-the-counter withdrawal slips. In some cases, banks charge monthly fees for current accounts, but th🦋ey may waive the fee if the account holder meets other requirements, such as setting up direct deposit or making a certain number of monthly transfers to a savings account.

Important

There are several different types o🍌f deposit accounts including current accounts, savings accounts, call deposit accounts, mon🙈ey market accounts, and certificates of deposit (CDs).

Frequently, banks will have after-hours or night depository lock boxes that allo꧑w businesses to deposit cash and check receipts outside of normal banking hours.

Savings Accounts

Savings accounts offer account holders interest on their deposits; however, in some cases, account holders may incur a monthly fee if they do not maintain a set balance or a certain number of deposits. Although 澳洲幸运5开奖号码历史查询:savings accounts are not linked to paper checks or cards like current acc♔ounts, their funds are relatively easy for account holders to access.

In contrast, a money market account offers slightly higher inter🎃est rates than a savings account, but account holders face more limitations on the number of checks or transfers they can make from money market accounts.

Call Deposit Accounts

Financial insti🃏tutions refer to these accounts as interest-bearing checking accounts, Checking Plus, or Advantage Accounts. These accounts combine the features of checking and savings accounts, allowing consumers to easily access their money but also earn interest on their deposits.

Certificates of Deposit/Time Deposit Accounts

Like a savings account, a 澳洲幸运5开奖号码历史查询:time deposit account is an investment vehicle for consumers. Also known as certificates of deposit (CD), time deposit accounts tend to offer a higher rate of return than traditional savings accounts, but the money must stay in the account for a set period of time. In other countries, time deposit accounts feature alternative names such as term deposits, fixed-term accounts, and savings b𝕴onds.

Deposit Insurance

The Federal Deposit Insurance Corporation (FDIC) provides deposit 澳洲幸运5开奖号码历史查询:insurance that 澳洲幸运5开奖号码历史查询:guarantees the deposits of member banks for at least $250,000 per depositor, per bank. Member banks are required to place signs visible to the public stating that "deposits are backed by the full faith and credit of the United States Government." 澳洲幸运5开奖号码历史查询:Credit unions are insured by the National Credit Union Association (NCUA) for up to $250,000 as well.

How Much Cash Can You Deposit Without Being Questioned?

A person in a trade or a business can de♕posit only up to $10,000 in a single transaction or multiple transactions without any issue. Some businesses may allow employees to deposit funds into their accounts using a 澳洲幸运5开奖号码历史查询:warm card. If depositing more than $10,000, IRS Form 8300 will need to be completed.

Do Banks Report Check Deposits to the IRS?

Banks report check deposits to the IRS if the amount is over $10,000. This doesn't matter if it is a check or cash, a bank is legally required to report this to the IRS.

Are My Bank Deposits Insured?

Yes, bank 澳洲幸运5开奖号码历史查询:deposits of up to $250,000 are insured by the Federal Deposit Insurance Commission (FDIC). The National Credit Union Association (NCUA) insures accounts of up to $250,000 for credit unions.

The Bottom Line

Bank deposits are the primary means by which people store their money, mainly in savꦗings accounts, checking accounts, and money market accounts. Bank deposits are a way to safely keep money with the ability to access it at any time in a conveniently.

Article Sources
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  1. National Credit Union Administration. "."

  2. Federal Deposit Insurance Corporation. "."

  3. Internal Revenue Service. "."

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