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Sujai Adithya
Human Resource and Banking & Finance Expert
Asked a question 11 months ago

What does the term deposit mean? What are the types of deposits and how do we make deposits?

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Sujai Adithya
Human Resource and Banking & Finance Expert

The term deposit in banking refers to the money or any other valuable, such as jewelry, that you have put in the bank. Depositing money means to deposit cash, cheque or transferring money from one account to another. 

The types of  deposits are:

1.) Cash Deposit - This is the most common type of deposit. Depositing cash to a teller or ATM to transfer it to your savings or checking account comes under this type.

2.) Deposit Accounts - Bank accounts which allow the user to deposit and withdraw money are called deposit accounts.

3.) Demand Deposit - The deposits in a checking account is available "on-demand". This type of account is also known as demand deposit account or current account.

4.) Certificate of Deposit (CD) - These are also called as time deposit accounts. The deposit is made for a specific amount of time, at a particular interest rate. When the deposit matures, the deposit and the interest earned can be withdrawn.

5.) Security Deposit - Commonly known as the "advance amount", this is the deposit made as a security backup. In case of renting an apartment, an advance will be useful in case the tenant skips out on rent, or if any damages are caused to the house.

How to make deposits:

Any person can walk into their bank branch and deposit money (either as cash or cheque) to a teller, who will transfer it to your account. Generally, a deposit slip is needed to be filled while depositing, which tells where to transfer the money and makes a record of the transaction. While depositing a cheque, it has to be endorsed by signing the back of the cheque. 

While using an ATM, deposit slips are not required because of the advanced technology. Some ATMs still use deposit slips. In case of money orders or paper checks, it can be sent through mail.

The most convenient platform in this age is by depositing electronically. You can directly transfer money from one account to another in this way. Checks can be scanned through a mobile camera and can be deposited by using an app.