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Understanding Bank Deposits

Bank deposits refer to money placed into savings accounts, checking accounts, or money market accounts at a banking institution for safekeeping. The account holder has rights to withdraw deposited funds according to the account terms. The deposit is a liability owed by the bank to the depositor, not the actual funds deposited. Bank accounts are generally classified as current accounts, which are demand deposits; savings accounts; recurring deposit accounts; or fixed deposit accounts.

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292 views2 pages

Understanding Bank Deposits

Bank deposits refer to money placed into savings accounts, checking accounts, or money market accounts at a banking institution for safekeeping. The account holder has rights to withdraw deposited funds according to the account terms. The deposit is a liability owed by the bank to the depositor, not the actual funds deposited. Bank accounts are generally classified as current accounts, which are demand deposits; savings accounts; recurring deposit accounts; or fixed deposit accounts.

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DEFINITION of 'Bank Deposits'

Money placed into a banking institution for safekeeping. Bank deposits are made to
deposit accounts at a banking institution, such as savings accounts, checking accounts
and money market accounts. The account holder has the right to withdraw any deposited
funds, as set forth in the terms and conditions of the account. The "deposit" itself is a
liability owed by the bank to the depositor (the person or entity that made the deposit),
and refers to this liability rather than to the actual funds that are deposited.

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Contents

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Time Deposits
Fixed deposits
Re-investment deposits
Recurring deposits
Demand deposits
Current Account
Saving Accounts
Difference Between Current Accounts and Savings Accounts
CASA Deposits
NRO, NE(E)RA and FCNA(A) Accounts
Non Resident Ordinary Accounts: (NRO):
Non-Resident (External) Rupee Account: (NR(E)RA
Foreign Currency Non-Resident Account: (FCNR)
Deposit Insurance in India

Bank Accounts are classified into four different types. They are,
1) Current Account
2) Savings Account
3) Recurring Deposit Account
4) Fixed Deposit Account
n conclusion
The bank deposit primarily serves us to preserve capital. Banks now-a-days have
added a lot of additional benefits to the traditionally benign service. Retired people
could make the best use of this avenue for securing a fixed and steady income.

The caution is not to use the fixed deposit as a long-term investment avenue. The
reason is that the real return is very less when adjusted for inflation. The tax
treatment of the interest also eats into the returns.

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