What are cash deposits?
A cash deposit refers to the act of placing money into a bank or savings account. Once deposited, the bank assumes the responsibility of safeguarding the funds and is obligated to repay the amount, based on the terms and conditions agreed upon for the account.
Where could you hear about cash deposits?
When you visit a physical bank location or ATM, you may come across a cash deposit machine that allows you to deposit money into your account. This option is available in addition to depositing cash through a the bank counter.
What you should know about a cash deposit?
Cash deposits are not limited to cash, as they can also include cheques or money transfers. When you make a deposit, the bank adds the money to its assets but creates a liability for the account. As a result, the deposited money is no longer considered your asset, but rather a right to withdraw the funds based on the agreed-upon terms of the account.
Banks offer different types of accounts for depositing money, such as current accounts used for wages and bill payments, and savings accounts that accrue interest on deposits. Depending on the type of account, you may have varying levels of access to your money. For instance, term accounts may require you to forfeit the right to withdraw your money for several years.
If you plan to make a large cash deposit, your bank may ask you questions about the source of the funds due to anti-money laundering regulations.