Explore the world of deposits, a cornerstone of banking and personal finance. This topic covers various deposit types, including savings, checking, and time...
A bank deposit is money placed by an individual or entity into a financial institution, typically a bank, for safekeeping or to earn interest. It creates a liability for the bank and an asset for the depositor.
Common types include checking accounts (demand deposits for daily transactions), savings accounts (for accumulating funds, often interest-bearing), and time deposits like Certificates of Deposit (CDs) that lock funds for a fixed period.
Yes, in many countries, bank deposits are insured by government agencies (e.g., FDIC in the US) up to a specific limit per depositor per institution, safeguarding funds against bank failure.
Higher interest rates generally lead to greater earnings on savings and time deposits, encouraging individuals to save more. Conversely, lower rates reduce potential returns and may deter saving.