Deposit Account

The account holder retains rights to their deposit, although restrictons placed on access depend upon the terms and conditions of the account and the provider.

A ''deposit'' is a type of Asset .

Typically, an account provider will not hold the entire sum in reserve, but will loan the money out at interest to other clients, in a process known as Fractional-reserve Banking . It is this process which allows providers to pay out interest on deposits.

By transferring the ownership of deposits from one party to another, they can replace physical cash as a method of payment. In fact, deposits ''account'' for most of the " Money Supply " in use today.

REGULATORY PROTECTION

In the United States , all deposits up to $100,000 are insured by the Federal Deposit Insurance Corporation . In the United Kingdom all banks and building societies which are licensed by the Financial Services Authority are covered by a compensation scheme with a maximum pay out of £31,700 per person.

TYPES OF DEPOSIT ACCOUNT

There are different types of deposit account, varying by their conditions of withdrawal. Common types are:

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Deposit Account