What is a bank deposit?

Bank deposits are funds put into a person or company’s bank account by a cash or check deposit or an electronic transfer. Individuals can make deposits into checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs). The account holder can withdraw deposited funds as soon as they’re available (deposited) in the account, which can take 1-2 business days.

Business banking—also called corporate or commercial banking—allows for deposits and withdrawals as with personal accounts but has different limits. Often, account holders must deposit a certain amount of money, called the “minimum deposit,” to open a new bank account. Depositing money into a checking account qualifies as a transaction deposit, meaning the funds are immediately available.

Another definition of deposit is when a portion of funds is used as a security or collateral for the delivery of goods. Some contracts require businesses to pay a percentage of funds before the delivery as an act of good faith.

How does a bank deposit work?

To deposit money at a bank branch, the individual must present cash or endorsed checks and a deposit slip to the teller. It’s also possible to deposit money through the bank’s online portal by following the institution’s prompts once the individual signs into their personal account.

Types of bank deposits

Current (Demand Deposit) Account

A current account or demand deposit account is a basic checking account. Consumers deposit money, and the account holder can withdraw money as soon as it lands in their account. These accounts may allow the account holder to withdraw funds using bank cards, checks, or withdrawal slips. Banks may charge monthly fees for current accounts, but they waive the fee if the account holder sets up direct deposit or makes a certain number of monthly transfers to a savings account.

Savings Accounts

Savings accounts accumulate interest on deposits; however, account holders may incur a monthly fee if they do not maintain a certain balance or number of deposits. Although savings accounts are not linked to checks or cards, their funds are relatively easy for account holders to access.

Call Deposit Accounts

Financial institutions call these accounts interest-bearing checking accounts, Checking Plus, or Advantage Accounts. They combine the features of checking and savings accounts, enabling consumers to access their money and earn interest on their deposits.

Certificates of Deposit/Time Deposit Accounts

A time deposit account is an investment mechanism for consumers. Also known as certificates of deposit (CD), time deposit accounts offer a higher rate of return than most savings accounts, but the money must remain in the account for a certain period. In other countries, time deposit accounts are called term deposits, fixed-term accounts, and savings bonds.

Does every deposit made to a bank earn interest?

Not all bank deposits earn interest. The terms of the account determine whether interest is earned. Many checking accounts do not provide interest, but most savings accounts and certificates of deposit (CDs) do.

Can I make a deposit using a check from another bank?

Anyone can make a deposit with a check from one bank to another. Most banks take deposits using cash, checks, money orders, or cashier’s checks. When using a check to open an account, there may be a holding period while the bank waits for the check to clear.