A deposit agreement is a legal contract between a financial institution and a customer that governs the terms and conditions under which deposits may be made to the account. The agreement sets forth the rights and responsibilities of both parties with respect to the deposits, including how and when they may be made, how they will be credited to the account, and any fees that may be charged for making deposits.
The deposit agreement is an important document that you should review carefully before opening an account. Here are some key things to look for:
- The types of deposits that are accepted by the financial institution.
- The minimum and maximum deposit amounts.
- The frequency with which deposits can be made.
- How long it will take for deposited funds to be credited to your account.
- Any fees that may be charged for making deposits.
It is important to understand the terms of your deposit agreement so that you can make good choices about how you manage your finances. For example, if you are looking for a short-term investment vehicle, you will want to choose an account with no minimum deposit requirement and no fees for making deposits. On the other hand, if you are looking for a long-term savings vehicle, you will want to choose an account that offers a higher interest rate in exchange for a commitment to maintain a minimum balance.
What is a Deposit Agreement?
A deposit agreement is a contract between a bank and a customer that sets forth the terms and conditions of the relationship. This agreement governs how the bank can use the customer’s deposits, how the customer can make withdrawals, and any fees that may be charged.
The Federal Deposit Insurance Corporation (FDIC) requires that all banks provide their customers with a deposit agreement at the time an account is opened. The FDIC also requires that banks make their deposit agreements available to existing customers upon request.
What Does a Deposit Agreement Cover?
A deposit agreement will typically cover four main topics: (1) accounts and services, (2) funds availability, (3) electronic fund transfers, and (4)Error Resolution. We will briefly review each topic below.
Accounts and Services – This section outlines what types of accounts the bank offers and what services are associated with each account. For example, if you open a savings account, this section will tell you how often you are allowed to make withdrawals from the account. This section may also outline any fees associated with certain account activities, such as making withdrawals or transferring funds to another account.
Funds Availability – This section explains when deposited funds will be available for withdrawal. For example, if you deposit a check into your checking account on Monday morning, this section will tell you when the funds from that check will be available for withdrawal. In general, deposited checks will be available for withdrawal on the next business day after they are deposited. However, there may be circumstances in which funds are not available for withdrawal until later. For example, if you deposit a check that is drawn on a bank located in another state, the funds may not be available for withdrawal until 2-5 business days after the check is deposited. This section will also explain any holds that may be placed on deposited funds, such as a hold forchecks over $5,000 or for deposits made through an ATM machine.
Electronic Fund Transfers – This section covers transactions that are initiated by electronic means, such as ATM withdrawals or online bill payments. This section explains your rights and responsibilities with respect to these types of transactions and outlines any applicable fees.
Error Resolution – This section explains what steps you need to take if you think there has been an error in an electronic fund transfer covered by this agreement. For example, if you are supposed to receive direct deposit but do not see the funds in your account on payday, this section will tell you how to notify the bank so that they can investigate the error and take corrective action if necessary.
The deposit agreement is an important document that sets forth the terms and conditions under which deposits may be made to your account. Be sure to review it carefully before opening an account so that you can make good choices about how you manage your finances.