The deposit

The deposit the contribution of money resources to banks and savings banks by physical and legal bodies, for a certain term and at interest.

Kinds of deposit contributions are individual for each bank, but basically it is possible to allocate following kinds of deposits: urgent, on demand and deposit in escrow.

The urgent deposit can be withdrawn only after termination of a certain term or after preliminary notification, and consequently the rate on it is higher, than on deposit on demand. Usually prescheduled withdrawal of money leads to loss of interests that are charged on the contribution.

Deposits on demand (with no fix term, and savings deposits), as a rule, have no period of storage as the deposit comes back under the first requirement of the client. Usually percent on demand deposits are considerably lower than interest that is charged on urgent deposits.

Deposit in escrow can be either cash deposit, brought by one person addressed to other person which has the right to dispose of deposit only on the certain, in advance stipulated conditions or at approach of the circumstances specified at opening of the account by the investor or the urgent or term less deposit which return is made at approach of the certain condition in advance stipulated by the investor in the contract.

Some banks give an opportunity of replenishment of deposit throughout a period of storage. Usually the quantity of replenishments throughout contract period of validity is not limited, though banks can establish the minimum amount of one such replenishment. If the bank establishes the fixed amounts of replenishment which the investor should bring through certain time intervals, in that case annuity is used.

Interest on deposits can be paid in the end of period of validity of the deposit contract or through the certain periods (monthly, quarterly, annually) throughout a deposit storage period. The interest rate, depending on conditions of placing of the contribution of deposit, can be fixed or floating. As to charge of interest there are some variants:

• charge of simple interest at the end of period of validity of the deposit contract (the percent is charged on the principle (initial) amount of deposit with the subsequent payment at the end of a deposit storage period);
• charge and payment of simple interest through the certain periods of time (usually monthly or quarterly, sometimes annually; interest is charged only for the principle amount of deposit);
• interest charge through the certain periods of time (monthly, quarterly, annually) with the subsequent capitalization (addition of interest incomes to the principle deposit with the further charge of interest for the increased deposit amount).

Income of deposit will also depend on the choice of calculation method. In order to show the difference of profitableness of deposits, we will consider three examples:


The following are also considered a deposit:

1. Records in the bankbooks, confirming certain liabilities of clients to bank;

2. Securities transferred to storage to credit institutions (actions and bonds);

3. Payments in customs offices in maintenance of payment of the customs duties and fees;

4. Payments of monetary means in judicial and administrative agencies in maintenance of the claim, an appearance in court.