interest bearing deposit account without a stated maturity, as opposed to a time deposit. Funds can be deposited or withdrawn at will, and most savings accounts pay interest from day of deposit to day of withdrawal. The account holding financial institution may require up to seven days' notice before approving withdrawals; most, however, have waived this right.
There are two broad types of savings accounts: a Money Market Deposit Account (MMDA), allowing the depositor up to six transfers a month (including three by check, draft, or debit card); and an ordinary savings account, such as a statement savings account or passbook account. In both an MMDA and passbook or statement savings, the depositor can make unlimited number of transfers for loan payments and transfers to another account owned by the same depositor, or make account withdrawals by mail, at a teller window, or at an automated teller machine. A deposit account having more than three transfers to third parties, by check, draft, and so on, is a transaction account in the eyes of bank regulators, and is reportable as part of a bank's deposits subject to reserve requirements. MMDA accounts and other savings accounts are exempt from this requirement.
deposit account at a commercial bank, savings bank, or Savings And Loan Association that pays interest, usually from day of deposit to day of withdrawal. Savings deposits are insured up to $100,000 per account if they are on deposit at a bank insured by the Federal Deposit Insurance Corporation (FDIC) or a savings and loan insured by the savings association insurance fund (SAIF). SAIF is administered by the FDIC.
deposit account at a commercial bank, savings bank, or savings and loan that pays interest, usually on a day-of-deposit to day-of-withdrawal basis. Financial institutions can pay whatever rate they like on savings accounts, but this rate tends to be in relation to the actions of the money center banks in repricing their prime rate. Traditionally, savings accounts offered pass books, but in recent years alternatives such as ATMs, monthly account statements, and telephone banking services have been added to credit deposits and interest earned. Savings deposits are insured up to $100,000 per account if they are on deposit at banks insured by the Bank Insurance Fund (BIF) or a savings and loan insured by the Savings Association Insurance Fund (SAIF). In 2005, Congress passed legislation merging the SAIF and BIF into one insurance fund administered by the Federal Deposit Insurance Corporation. The same law also raised the federal deposit insurance level from $100,000 to $250,000 on retirement accounts and gave the FDIC the option to increase insurance ceilings on regular bank accounts from $100,000 by $10,000 a year, based on inflation, every five years thereafter starting April 1, 2010.
