Types of deposit accounts

1. Savings deposit account (thrift deposit)

A savings account is an interest-bearing deposit account held at a bank or other financial
institution. Though these accounts typically pay a modest interest rate, their safety and
reliability make them a great option for parking cash you want available for short-term needs.
2. Transaction deposit account
A transaction deposit is a bank deposit which has complete and unconditional availability,
without gaps or waiting periods. Transaction deposits may be used on request by the
account manager for certain purchases. For instance, a checking account is a typical bank
account for deposits and the account manager is entitled to withdraw the balance at any
time.
3. Current deposit (NOW) account
According to Peter S. Rose, Sylvia C. Hudgins (2007) “Now accounts are interest-bearing
savings deposits that give the offering depository institution the right to insist on prior notice
before the customer withdraws funds.”
4. Time (fixed) deposit account
A time deposit is an interest-bearing bank account that has a pre-set maturity date. The best-
known form is a Deposit Certificate (CD). For the specified period the money will stay in the
account to receive the mentioned interest rate.
Term deposits typically offer an interest rate much higher than a daily savings account. The
longer the maturity period, the larger would be the interest rate.
5. Money market deposit account
A money market account is an interest-bearing account at a bank or credit union not to be
confused with a money market mutual fund. Sometimes referred to as money market deposit
accounts (MMDA), money market accounts (MMA) have some features not found in other
types of accounts. Most money market accounts pay a higher interest rate than regular
passbook savings accounts and often include check writing and debit card privileges. They
also come with restrictions that make them less flexible than a regular checking account.
They are important for calculating tangible net worth.
References:
· https://www.investopedia.com/
· Peter S. Rose, Sylvia C. Hudgins (2007). Bank management and financial services.
7th edition.