In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, transaction deposit is a term used by the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

for

checkable deposit A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account held at a bank or other financial institution. It is available to the ...

s and other accounts that can be used directly as cash without withdrawal limits or restrictions. Such

demand deposit Demand deposits or checkbook money are funds held in demand accounts in commercial banks. These account balances are usually considered money and form the greater part of the narrowly defined money supply of a country. Simply put, these are depo ...

s are subject to

reserve requirement Reserve requirements are central bank regulations that set the minimum amount that a commercial bank must hold in liquid assets. This minimum amount, commonly referred to as the commercial bank's reserve, is generally determined by the centra ...

s imposed by the central bank that require the bank to keep reserves at the central bank. This is in contrast to " time deposits" ( term deposits), which are not subject to reserve requirements.

Regulations

Transaction accounts include all deposits against which the account holder is permitted to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or by

telephone A telephone is a telecommunications device that permits two or more users to conduct a conversation when they are too far apart to be easily heard directly. A telephone converts sound, typically and most efficiently the human voice, into e ...

or preauthorized transfers for the purpose of making payments to third persons or others. However, accounts subject to the rules that permit no more than six preauthorized, automatic, or other transfers per month (of which no more than three may be by

check Check or cheque, may refer to: Places * Check, Virginia Arts, entertainment, and media * ''Check'' (film), a 2021 Indian Telugu-language film * ''The Checks'' (episode), a 1996 TV episode of ''Seinfeld'' Games and sports * Check (chess), a thr ...

draft Draft, The Draft, or Draught may refer to: Watercraft dimensions * Draft (hull), the distance from waterline to keel of a vessel * Draft (sail), degree of curvature in a sail * Air draft, distance from waterline to the highest point on a vesse ...

, debit card, or similar order payable directly to third parties) are savings deposits, not transaction accounts.

External links

Federal Reserve Bank of Minneapolis - About the Fed - Reserve Requirements of Depository Institutions
{{DEFAULTSORT:Transaction Deposit Economy of the United States Banking

Regulations

See also

External links