Definition Of Deposits In A Bank Account

2019/02/25

Bank account is used to receive and transfer money from one account to another. Bank statements provide information on all the deposits and withdrawals made by account holder. Information on various transactions can also be checked by using the online banking facility provided by many banks to their account holders.

It is very important for an individual to check his/her bank account in order to validate all the receipts and transfer of funds appearing in the account.Any receipt of fund by an individual in a bank account can be called as a deposit. Deposits can be made by the individual himself/herself or by any other person in favor of the account holder.

Meaning and Impact Of Deposits In A Bank Account

Deposits generally represent credit entries in the bank account. Any kind of deposit in a bank account results in an increase in the account balance. For Instance, an individual may have an account balance of $ 2,000 in his account at the beginning of August 2011.

In case this individual deposits an amount of $ 200 on cash, his/her account balance would increase to $ 2,200.It is important to note that only those deposits which have been credited to the bank account will be available for use by the account holder. Funds deposited in the account which are yet to be cleared by the bank will not be available for use by the account holder.

Types Of Deposits In A Bank Account

Following Are some of the common types of Deposits made in a Bank Account.

a) Any cash directly deposited by the account holder.
b) A check of any other bank drawn in favor of the account holder. Check can be issued by the account holder (in case he/she holds another account in a different bank) or by any third party.
c) A check of same bank with a different account number drawn in favor of the account holder. Check can be issued by the account holder (in case he/she holds multiple accounts in the same bank) or by any third party.
d) Deposit made through an electronic fund transfer by the account holder or by any third party.
e) Any kind of interest or dividend received by the account holder.
f) Any salary received by the account holder.
g) Any kind of tax refund received by the account holder.
h) Any kind of reversal of bank charges or cash back received from a credit card company.

It is important to note that some deposits (like salary) are regular in nature while other deposits like any payment received from a  third party may not be regular in nature. Hence, it is not very difficult to identify deposit transactions in a bank statement. However, impact of all the deposits would the same, that is, increase in account balance with the amount of deposit made.

How To Make Deposits?

Deposits can be made directly at the bank or through an online transfer or by using the bank’s ATM machine. However it is important to note that there may be restrictions on the maximum amount of cash that can be deposited in single day in a bank account.

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