Savings Account

Interest bearing Deposit account without a stated maturity, as opposed to a Time Deposit. Funds can be deposited or withdrawn at will, and most savings accounts pay interest from day of deposit to day of withdrawal. The account holding financial institution may require up to seven days' notice before approving withdrawals; most, however, have waived this right.

There are two broad types of savings accounts: a Money Market Deposit Account (MMDA), allowing the depositor up to six transfers a month (including three by check, draft, or debit card); and an ordinary savings account, such as a Statement Savings Account or Passbook account. In both an MMDA and passbook or statement savings, the depositor can make unlimited number of transfers for loan payments and transfers to another account owned by the same depositor, or make account withdrawals by mail, at a teller window, or at an automated teller machine. A deposit account having more than three transfers to third parties, by check, draft, and so on, is a Transaction Account in the eyes of bank regulators, and is reportable as part of a bank's deposits subject to reserve requirements. MMDA accounts and other savings accounts are exempt from this requirement.

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