Deposit Definition & Meaning

Examples of deposit in a Sentence

Verb Your paycheck will be automatically deposited into your account. I deposited over $3,000 this afternoon. Please deposit your things in your room and return to the hotel lobby. The taxi deposited us at the train station. Noun Our records show that she made a large deposit to her account earlier in the month. If you return that empty soda can, you’ll get back the five-cent deposit you paid when you bought the soda. The rental car company requires a deposit for drivers under the age of 25. a deposit of mud left by the flood He had surgery to remove calcium deposits from his knee. the buildup of fat deposits in the arteries Their company has discovered new oil deposits below the ocean floor. See More Recent Examples on the Web: Verb Enormous machines project designs for chips across each wafer, and then deposit and etch away layers of materials to create their transistors and connect them. New York Times, 8 Apr. 2022 Sky Mavis also struck an agreement with Binance which allows gamers to deposit and withdraw crypto even as the Ronin Bridge remains suspended. Kristine Servando, Bloomberg.com, 8 Apr. 2022 New players who use Barstool Sportsbook promo code FOREST1000 will be able to deposit anywhere between $10 and $1,000 to bet risk-free. Xl Media, cleveland, 1 Apr. 2022 Travelers were starting to deposit their bags in the bus hold. CNN, 31 Mar. 2022 For now, though, legitimate users are unable to withdraw or deposit funds to or from the Ronin network on either Katana or Binance. Kyle Orland, Ars Technica, 30 Mar. 2022 The hack has affected users of the online game, who are now unable to withdraw or deposit funds to the Ronin service. NBC News, 29 Mar. 2022 Then, they’d be asked to run solely over the PJ1-stained portion of the track, which at high enough speeds would deposit rubber onto that section that would then, in turn give it more grip. Nathan Brown, The Indianapolis Star, 17 Mar. 2022 Polis said the state, which was also the earliest to use blockchain technology for government infrastructure, will take the digital coin payments and deposit the equivalent value in dollars into the state’s treasury. Eric Fayeulle, ABC News, 23 Feb. 2022 Recent Examples on the Web: Noun People without bank direct-deposit services also could face delays in receiving their Arizona refunds. Russ Wiles, The Arizona Republic, 25 Jan. 2022 The remaining direct-deposit payments are scheduled for Oct. 15, Nov. 15 and Dec. 15. Washington Post, 10 Sep. 2021 For instance, filling out a direct-deposit bank form after one interview isn’t the norm. Heidi Mitchell, WSJ, 8 Sep. 2021 Direct-deposit payments will go out starting July 28, while paper checks will be mailed out starting Friday, July 30, according to the agency. Irina Ivanova, CBS News, 30 July 2021 Those who have given the IRS their bank information will get a direct-deposit payment while others will get either a debit card or paper check in the mail. Chris Perkins, sun-sentinel.com, 15 Mar. 2021 Without a second thought, a renter will disclose all their personal information — social security number, bank accounts, driver’s license, date of birth, employment, income — on an application and may pay a deposit to a stranger. Christopher Elliott, Forbes, 9 Apr. 2022 Emergency rental assistance funds can be used to pay the security deposit for a new home and moving costs. USA Today, 4 Apr. 2022 De la Cruz is trying to sell all her plants and decor to raise $2,500 to pay the deposit and the first month’s rent. Imelda García, Dallas News, 26 Aug. 2021 See More

These example sentences are selected automatically from various online news sources to reflect current usage of the word ‘deposit.’ Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Expedited Funds Availability Act

The Expedited Funds Availability Act (EFAA) was passed in 1987 to address concerns over the length of time banks were holding customer deposits. The EFAA, implemented by Regulation CC, established maximum permissible hold times for checks and other deposits. With checks, the EFAA requires that:

  • No more than one business day passes between the day funds are deposited and the day they’re made available for local checks.
  • No more than four business days may pass between the day funds are deposited and the day they’re made available for nonlocal checks.
  • Not more than $400 (or the maximum amount allowable in the case of a withdrawal from an automated teller machine but not more than $400) of funds deposited by one or more checks shall be available for cash withdrawal not later than 5 p.m. of the business day on which funds become available.

The Expedited Funds Availability Act aims to ensure that customers aren’t waiting on hold indefinitely to access their deposits. The Act also requires banks and other financial institutions to inform customers about their funds availability policies and how they work. This information is provided through a funds availability disclosure.

Money Market Accounts

A money market account is a deposit account that can be used as a savings account with limited check writing and debit card privileges. A money market account’s main advantage is that it features a higher interest rate than a typical savings account. Although your bank might limit you to six withdrawals or checks per month, ATM, in-person and phone transactions are usually exempt.

A money market account is different from a money market fund, which is an investment and could lose money.

Good To Know

There’s no limit on how much money you can deposit into your deposit accounts. However, anti-money-laundering laws require banks to report deposits larger than $10,000 — or multiple deposits totaling over $10,000 in a single day. Also, keep in mind that FDIC insurance (NCUA insurance in the case of credit unions) only covers up to $250,000 per person, per financial institution.

How do deposits work?

Bank deposits work through a system of agreements and regulations. When a customer makes a bank deposit, the bank agrees to hold the money for the customer. The bank or credit union sets guidelines for deposit amounts and time limits. For example, a bank may set a money market account limit. Customers must deposit an initial amount before they can open this type of account. They can also state how and when a customer can withdraw funds.

While holding the deposit, the funds become the bank's asset. This means the bank can use the funds while they have the asset. For example, they use funds to pay for other customer withdrawals. The customer's deposit account is part of a bank's liability. This means the bank is responsible for the funds in the customer's account. At a set date, they need to be able to return the funds and pay any interest.

Depending on the bank or financial institution, customers may deposit funds in several ways, including:

  • In-person: Customers may visit a bank branch and deposit cash or check directly into their account.

  • Through an automated teller machine (ATM): For some accounts, customers can deposit funds through an ATM.

  • By mail: Some banks accept paper checks through the mail. They deposit the funds from the check into the customer's account.

  • Electronically: Customers may deposit funds online. This includes direct deposits and e-payments. For example, when a customer uses direct deposits, their employer sends paychecks directly to the bank. The bank takes the electronic funds from the employer and places them into the customer's account.

When a customer withdraws some or all of their funds, the bank may pay them interest depending on the account type. Banks can set an interest rate for different account types. For example, your financial institution might offer several levels of savings accounts with different interest rates. Often, higher interest accounts require more money in an initial deposit.

Read more: Simple Interest and How To Calculate It in Your Savings Account

How Does a Deposit Work?

When you deposit your money in a bank, you are safeguarding it. The bank promises to pay this money back to you as and when you need it. The deposit is your asset, and the bank owes you the amount you save and pays interest on it. The interest rate differs based on the type of deposit you make. While there are no restrictions on demand deposits, banks may levy penalties for withdrawing a time deposit prematurely.

Checking Accounts

A checking account — also known as a current account in some parts of the world — is a demand deposit account. Some, but not all, checking accounts pay interest.

You can withdraw money from this type of account in a number of different ways:

  • Go to the bank to make a withdrawal using a withdrawal slip.
  • Write a check to yourself or to someone else. When the bank receives the check, it provides the funds to the person whose name is on the check.
  • Use your debit card at an ATM.
  • Make a purchase with your debit card at a point-of-sale terminal. The cost will be deducted from your account by the merchant.

Note that checking accounts aren’t the only accounts that let you write checks. You can also write checks on money market accounts, home equity lines of credit and other credit line accounts.

When you deposit a check, the bank might hold the check for several days before the funds can be withdrawn, but the first $225 of the deposit is usually available by the next business day and the rest of the deposit the day after that. Each bank has its own rules, so check with your bank for its requirements.

A Better Way to Bank

Credit unions sometimes refer to their checking accounts as share draft accounts. These accounts are a form of ownership, as credit unions are owned by their members. By contrast, at banks, checking account holders are customers, not owners.

What are Wells Fargo’s responsibilities to me regarding a deposit hold?

Wells Fargo is responsible for giving you prompt notice when there is a delay in the availability of your deposited funds. Additionally, if you did not receive a notice of the deposit hold at the time you made the deposit and the check you deposited is paid, we will refund any fees that were charged due to the deposit hold. To obtain a refund of such fees, call the appropriate number below:

Consumer Accounts 1-800-869-3557

Business Accounts 1-800-225-5935

Deeper definition

The term “deposit” is typically used in financial transactions, but it can be used in other situations. There are two ways to use this term, as a noun and a verb.

  • As a noun, banks refer to deposits as a customer’s money held at the bank or other financial institutions.
  • As a verb, banks refer to the term “deposit” as the act a person or depositor, adding money to his or her bank account.

In the banking world, there are two general types of deposits. These include demand deposits and time deposits.

  • Demand deposit refers to the placement of funds into an account that allows a person, also known as a depositor, to withdraw his or her funds without notice. One common example of a demand deposit is the checking account.

Checking accounts allow depositors to withdraw their funds at any time, and there’s no limit to the number of transactions that depositors can make on their accounts. Even so, this doesn’t mean that the bank can’t charge a fee for every transaction.

  • Time deposit is an interest-bearing deposit held by a bank for a fixed term. This time period usually varies from 30 days to about 5 years. In most cases, depositors must give notice prior to withdrawing the funds before the time limit ends.

Banks may charge a penalty if a depositor asks to withdraw before a specified date. Time deposits generally refer to certificates of deposit (CDs) or savings accounts. They may pay higher interest rates compared to demand deposits.

When money is deposited into a bank account, it typically accrues interest. This means that a small percentage of the account’s total is added to the amount of funds already deposited in the account. Interest can be compounded at different rates and intervals, depending on the bank or institution.

Thus, depositors should shop around to find a bank that offers the best interest rates before opening an account. CDs, time deposits and other bank accounts that restrict withdrawals usually offer higher interest rates, which allow depositors to save more money in a short period of time.

When does a deposit begin accruing interest?

Cash deposits begin accruing interest the same business day a deposit is credited to your account. If you deposit an item such as a check, interest begins accruing on the business day we receive credit for the item.

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