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A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts , current accounts or any of several other types of accounts explained below.
A certificate of deposit — or a CD — is a savings account that pays a fixed rate of interest on an initial deposit that you agree to lock away for an agreed-on period of time. CD terms can ...
In exchange for locking away your money, time deposit accounts often pay higher yields than demand deposit accounts. A certificate of deposit (CD) is an example of a time deposit account. CDs come ...
A demand deposit is a deposit that can be withdrawn or otherwise debited on short notice. Transaction accounts (known as "checking" or "current" accounts depending on the country) can be used to pay other parties, while savings accounts are typically payable only to the depositor or another bank account, and may have limits on the frequency of withdrawal.
A traditional or fixed-rate CD is a deposit account that provides a fixed interest rate for a specific term that can range from a few months to five years or more. Traditional CDs are the most ...
The deposit account is a liability of the bank and an asset of the depositor (the account holder). On the other hand, a bank can lend some or all of the money it has on deposit to third parties. Such accounts, generally called loan or credit accounts, are subject to similar but reverse principles of a deposit account.