Money deposited in a bank is a bank deposit. Bank deposit creates a contractual relationship between a banker and a depositor. The depositor or the account holder retains a right to get repayment on demand. The bank owes a liability to the depositor. In a bank’s financial statement, a deposit is shown as the asset of a bank. Some banks charge fees on maintaining depositor’s fund. A bank deposit is recorded on bank’s book.
Major types of bank deposits are:
- Demand deposit; and
- Time deposit.
In demand deposit, a depositor can withdraw the deposited amount any time. In time deposit, money is deposited for a specific time. A deposit is subject to notice before withdrawal in time deposit.
Bank depositor is a person delivering certain sum of money subject to his/her order.