Payday Loan Canada
- The term deposit refers to funds transferred to a client’s account at a bank or another financial establishment. Deposit accounts come in different varieties such as savings accounts, current accounts, or other kinds of bank accounts opened at banking institutions. Deposit accounts allow account holders to deposit and withdraw money from the account. Banks’ books keep these transactions recorded and the balance represents liability for the financial institution. This is the money banks owe to their clients. Some banking establishments pay interest on deposits while with others, a fee may apply to the service.
The main types of deposit accounts are savings accounts, checking accounts, time deposits, and money market deposits. Checking accounts, also referred to as transactional deposit accounts, are held at financial establishments which allow clients to withdraw their deposits. Money deposited in checking accounts is liquid, and accountholders can withdraw it in various ways. This can be done by using electronic debits, automated teller machines, checks, and other means. Checking accounts allow bank clients to make an unlimited number of deposits and many withdrawals. On the other hand, banks often place a limit on the deposits and withdrawals with savings accounts. Checking accounts may be in the form of personal, business, student, and other accounts.
Savings accounts are another type of deposit account held in retail banks. Account holders are not allowed to use the money by way of withdrawals, but savings accounts pay interest. While savings accounts are not featured with the same easy access checking accounts offer, they earn monetary return. In addition, savings accounts are a good way of keeping your money safe. Credit unions and banks keep deposits in fireproof, locked safes. In addition, deposits are insured with the Federal Deposit Insurance Corporation.
Savings accounts also pay interest on deposits, i.e. money that is deposited in the account. Banks give these deposits to other people in the form of loans, charging borrowers a higher interest rate compared to what they pay depositors.
The money market account is a third type of deposit account, featured with a high interest rate. In general, money market accounts are a variation of the savings account. However, they come with higher minimum balance requirements and hence offer a higher interest rate. In addition, withdrawals are limited to 3 to 6 every month, and checks may be limited to 3 a month. Interest is typically compounded on a daily basis and paid monthly. With compound interest, banks pay interest on top of the money they have already paid interest on. It is important to note that interest rates may differ substantially from one bank to another. The reason is that some banks try to attract customers to open accounts with them and offer high interest rates. In the USA, money market accounts are intended as instant access deposits, which are subject to federal-level regulations applicable to savings accounts. One such regulation applies to the monthly transaction limit.
Finally, time deposit is a fourth type of deposit account, with money being deposited at a banking establishment. Deposits can be withdrawn only after a fixed term or they can be rolled over for one more term after the first is over. The yield is higher when the term is longer. Depositors are allowed to withdraw their money but only after giving written notice. The term of time deposits is a minimum of 30 days. This deposit account allows holders to earn guaranteed interest within a pre-set period and is a good option for bank customers who do not need to access their savings immediately.