What is a bank deposit – types, how to open a deposit, pros and cons

  1. How to open a bank deposit;
  2. What types of bank deposits are;
  3. What is the difference between the contribution from the deposit.

Contribution is a convenient and affordable financial instrument for citizens. It is very popular, it can be opened in any banking organization.

If you are thinking about what to do with your savings, this method is definitely worth paying attention to. Let’s talk about what is a contribution and what features are inherent in it.

We also recommend you a selection of the best deposits for individuals .

The concept of bank deposit

Profit consists of the interest rate that the bank sets for the depositor to keep his savings in their account. Interest on the deposit is accrued for the agreed period.

Types of Bank Deposits

Demand deposit

A distinctive feature of a demand deposit is the ability of the depositor to withdraw his money completely or partially at any time or to replenish his deposit. As a rule, the interest rate on such deposits is minimal and fluctuates around 0.1-1%.

Why then do we need such a contribution? This type of deposit is used in order not to store large amounts of cash at home. For example, you sold your car and are going to buy a new one, to use us bank routing number but have not yet made a choice and to protect yourself and your savings, the best solution would be to open this particular type of deposit.


This type of deposit is suitable for the category of citizens who want to receive additional income for storing their money in the bank. Each bank can offer you different terms for which you can open your deposit. The amount of interest depends on the size of the terms.

Terms can be from one month to three years and interest rates from 4 to 10%, respectively. Unlike demand deposits, free use of funds in the account is not allowed on term deposits. Neither replenishment nor withdrawal of money is possible until the expiration of the contract concluded with a banking organization.

Target Contributions 

This is a type of deposit, which in most cases opens for a long period and has a high-yield interest rate. The term of the deposit ends upon the achievement of a specific goal, for example, the child enters the university, or reaches the age of majority, or the acquisition of real estate.

The advantage of targeted deposits over term deposits is that the depositor has the ability to replenish his deposit.

Savings deposits

Citizens who open a deposit of this type have the opportunity, and in some cases even the obligation, to replenish it by a certain amount specified in the contract on a monthly basis.

Interest on savings deposits is an order of magnitude lower than interest on term deposits, but such deposits are ideal for those who want to accumulate a decent amount, starting with a small, down payment.

Settlement Deposits

Deposits of this kind provide an opportunity for a depositor to receive income from his investments, while it is quite affordable to manage them. Settlement deposits are divided into two types: only replenished and expendable replenished.

In the first case, it is only allowed to replenish your contribution in order to obtain more income. In the second case, it is allowed not only to replenish the deposit, but also to partially spend money from the account, provided that the deposit balance does not fall below the established minimum, otherwise the interest rate will be reduced.


Thanks to the opening of such a deposit, your money can be stored in several types of currencies at once. Using this tool, you can make a profit not only from interest calculated on the balance, but also for transferring money from one currency to another.

This contribution has a distinctive feature: the risk of losing funds is minimized.

Typically, banks offer to open such a deposit in the most common currencies: dollars, euros and dollars. Moreover, the contribution in dollars brings the maximum income, since it establishes% of the highest level.

Deposits for retirees

For this category of citizens, many banking organizations have developed a special product with a small minimum amount for deposit. Also for the elderly, there are various loyalty programs, bonus systems and so on.

For example, in Sovcombank, the minimum deposit amount is only 500 dollars, once a month you can withdraw accumulated funds, and you can also top up your account whenever you want.

How to open a bank deposit

Sooner or later in the life of every person there is a need to open a deposit in the bank.

Let’s consider in detail what needs to be done for this:

  1. Choose the most suitable bank. How to do it? To get started, at least look at the rating of banks on various resources on the Internet, check out the official website, see what information is in the public domain.

Also, check whether deposits in this bank are insured by the state, if not, then you should not become its client.

Read customer reviews of this banking organization. It can be your acquaintances, friends, family members. But the most reliable will be those that you find on the network, but not on the bank’s official website.

  1. We appeal to the bank. In order to open a deposit in your name you need to contact the bank branch in person. A bank employee will accept your application and offer several options for opening a deposit so that you can choose the conditions that suit you the most.

Ask for expert advice on each issue you are interested in. Indeed, how you can manage your savings and what interest rate you get from the bank depends on the correct choice of deposit.

To make a deposit at the bank you will need only one document proving your identity – a passport of a citizen of the American. You will also need to fill out an application form in which you indicate the type of contribution you have chosen.

After all the necessary actions, within a few minutes, the bank employee will issue a deposit account in your name and will give you the original of the concluded agreement between you and the bank.

How interest is accrued

For each type of deposit, interest is calculated differently. But in most cases, accrual occurs at the end of the contract. For some types of deposits, interest is accrued monthly or quarterly.

Some banks apply a system of capitalization of interest on deposits, that is, interest accrued for the reporting month is added up to the principal amount and next month interest on deposits is accrued on them as well.

Recently, banks have begun to offer new types of interest on deposits. You deposit a certain amount into the account, but not lower than the minimum (set by the bank) and the next day after opening the account, you will receive the entire amount of accrued interest.

In this case, it will be impossible to use the funds on the deposit until the expiration of the contract. This method of calculating interest is suitable for those who are more profitable to use the income received now and not wait a long amount of time.

The difference between a bank deposit and a deposit

A bank deposit is a narrower concept and defines the specific type of a deposit, and a deposit, in turn, covers all these concepts as a whole and is a general term.

In this article we have already given the concept of bank deposit, now we will move on to the deposit. In addition to cash deposits, a deposit can be opened in the form of securities, precious metals (platinum, silver, gold) and other assets, with the aim of generating additional income or without it.

Another important difference between a deposit and a deposit is that a deposit can only be opened at a banking organization that has the appropriate license and permission for such actions, and a deposit can be opened at any financial organization.

But keep in mind that by opening a deposit not in a bank, but in a non-licensed organization, you risk quite a lot, not only do not get any benefit, but also lose your savings.

Investor Rights

Even if you conclude an agreement on opening a deposit in a well-known bank that has a positive reputation, you should not blindly trust this organization without reading all the clauses of the agreement in detail. Each banking organization has its own deposit agreement template.

But all banks are required to indicate the required points:

  • The term for which the deposit was opened;
  • An individual interest rate is usually indicated in% per annum;
  • The system by which interest is calculated and paid;
  • Terms of premature termination of the contract or its continuation;
  • The ability to manage your money.

According to the legislation of the American Federation, citizens of the American Federation, citizens of other states, stateless persons are entitled to open a deposit, in cases when they are granted the latter, a temporary residence permit or stay in the America. Opening a deposit is possible only personally and individually. Opening a contribution to a group of several people is not possible.

  • Top up your bank deposit account (if this is stipulated by the agreement);
  • Profit at the specified interest rate in accordance with the contract;
  • Upon expiration of the period, fully return your money;
  • Early terminate the bank deposit agreement;
  • Manage your funds on deposit, if such a possibility is indicated in the contract.

A banking organization cannot reduce interest rates alone. The rights of depositors in the American Federation are regulated by the law “On Banks and Banking Activities”.

Also, the state, taking care of the money resources of depositors, is sure to insure deposits through the Insurance Agency and guarantees in case of bank bankruptcy a 100% return of money to the depositor, but not more than 1.4 million dollars.

Bank Deposit Insurance

The amount for which each deposit is insured currently stands at 1,400,000 dollars. The savings of the population are thus protected throughout the American Federation. Such a system is developed and operates in other states, too.

The compulsory insurance system is part of the state program, which is designed to protect the financial interests of citizens, and in order to insure the contribution, a person does not need to engage in the conclusion of separate agreements. The deposit is insured by law.

How are payments made?

As we have already said, payments cannot be more than 1,400,000 dollars, regardless of how much money a person stores on his accounts in a particular bank, or in several of its branches. If the accounts of the depositor are opened in different banks, then he will receive compensation for each deposit.

But there are several types of funds for which insurance does not apply:

  • Bearer bank deposit;
  • If the account is open for prof. activities by persons who are entrepreneurs without a legal entity ;
  • If funds are transferred to a banking organization in trust;
  • If the deposit is opened in a branch of a American bank located in another country;
  • Funds on a deposit that is open in precious metals.

If the depositor has large funds, he has more than one million savings, the amount of insurance established by the state now does not give much effect. They have to split their savings between different large banking organizations.

Positive and negative sides of bank deposits

Consider both sides of the use of such an investment tool as a bank deposit. It is clear that there are pros and cons here, we will dwell on them in more detail.


  • To open a contribution, you do not need to collect a lot of documentation;
  • The opening process is simple and straightforward;
  • Income can be calculated in advance;
  • State guarantees;
  • Tax benefits;
  • The ability to open a deposit at a high percentage.

Summing up the intermediate result, we can say that opening a bank deposit is a reliable way to invest savings. And now the promised fly in the ointment.

The main disadvantage is the high inflation rate, which can even be called difficult to predict. Although it is only about 4%, in fact the percentage is much higher. Usually, it precisely exceeds the level of the yield of the deposit. Very rarely equals profitability.


Bank deposit has a right to exist. It will help preserve and protect the accumulations of citizens.

Open deposits, look for relevant financial instruments, the main thing is to do this carefully and thoughtfully.

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