Savings accounts are accounts maintained by retail
financial institutions that pay
interest but cannot be used directly as
money (for example, by writing a
cheque). These accounts let customers set aside a portion of their liquid assets while earning a monetary return. For the bank, money in a savings account may not be callable immediately and therefore often does not incur a
reserve requirement freeing up cash from the bank's vault to be lent out with interest.
The other major types of
deposit account are
transactional account,
money market account, and
time deposit.
Regulation
In the United States, under
Regulation D, 12 CFR 204.2(d)(2), the term "savings deposit" includes a deposit or an account that meets the requirements of Sec. 204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the
depository institution, the depositor is permitted or authorized to make up to six transfers or withdrawals per month or statement cycle of at least four weeks. The depository institution may authorize up to three of these six transfers to be made by check, draft, debit card, or similar order drawn by the
depositor and payable to third parties. There is no regulation limiting number of deposits, but some banks choose themselves to limit deposits.
Within most
European countries, interest paid on deposit accounts is taxed at source. The high rates of some countries has led to the development of a significant offshore savings industry. The...
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