What Is a Call Deposit Account Definition and How It Works
A call deposit account is a bank account that combines the advantages of a savings and checking account. It offers instant access to funds and allows unlimited withdrawals and deposits, just like a checking account. Additionally, it accrues interest like a savings account.
Key Takeaways:
– Call deposit accounts offer the benefits of a savings and checking account.
– They offer higher interest rates and guaranteed liquidity.
– There are no limits on withdrawals, and multiple currencies can be used.
Understanding a Call Deposit Account:
Call deposit accounts provide interest-bearing benefits without withdrawal penalties. The interest rate depends on the account balance, known as banded interest rates.
These accounts can be accessed at any time through online, mobile, phone banking, or ATMs. They may require a minimum balance to earn interest, and different currencies may have different interest rates.
Most withdrawals from call deposit accounts do not require notice, unless they exceed a certain amount. Institutions may have daily withdrawal limits to prevent losses due to identity theft.
Special Considerations:
As of April 24, 2020, Regulation D restrictions on withdrawals from interest-bearing accounts were retired, but some banks may still impose limits.
Call deposit accounts have the advantage of higher liquidity. However, traditional high yield savings accounts with transaction limits can offer higher interest rates.
These accounts also allow deposits and withdrawals in multiple currencies, reducing foreign exchange expenses and currency risk.
They may have minimum deposit and daily balance requirements.
How Does a Call Deposit Work?
A call deposit account is an interest-earning account with unrestricted access to funds, unlike savings accounts with withdrawal limits.
Difference Between Call Deposit and Current Account:
A call deposit earns interest and allows access to funds, while a current account does not earn interest and is used for regular payments.
What Type of Account Is a Call Account?
A call deposit account combines the benefits of a demand deposit and term deposit account. It earns interest, unlike a regular demand deposit account.