What is the Sources Bank of Funds

Transaction Deposit: A demand deposit account is offered to customers who desire to write cheque against their account. A conventional demand deposit account requires a small minimum balance and pays no interest. From the bank’s perspective, demand deposit accounts are classified as transaction account that provide a source of funds that can be used until withdrawn by customers through using cheque.   

Savings Deposit: The traditional savings account is the passbook savings account, which does not permit cheque writing for withdrawing money from banks. The idea was to prevent excessive competition that could cause bank failures. Passbook savings accounts continue to attract savers with a small amount of funds, for example, such accounts often have no required minimum balance. Although legally customers are required to provide a 30 day written notice to withdraw funds, most commercial banks will allow withdrawals from these accounts on a moment’s notice.

Time Deposits: Time deposits are deposits that cannot be withdrawn until a specified maturity date. Although savings deposits are sometimes classified as time deposits because of, the legal 30-day notice and they treated separately here because the 30-day notice normally is not enforced.