Bank Accounts, Deposits and Account Types

Definition: Checking Account

A checking account (current account) is an irregular deposit contract for money, with additional service agreements provided by the cash custodian. Under the current account contract, the bank, savings bank, or credit union receives funds on behalf of the owner of the account, provides custody, and agrees to make payments according to instructions for amounts up to the balance.

Irregular (Deposit Ownership) Contracts

An irregular deposit is one in which the depositary (receiver) acquires ownership of the thing deposited and agrees to return to the depositor (person who delivered it) at the expiration of the contract, otherwise the same nature and value. In irregular deposits the depositary becomes owner of the funds during the term of the contract and must return an equivalent amount at maturity.

Regular (Specific-Item) Deposits

In a regular deposit the depositary returns at the end of the contract the same thing he received. Regular deposits therefore preserve the specific asset deposited and return that same asset when the contract ends.

Classes of Accounts

Common classes of accounts include:

• Individual accounts — accounts held by a single owner.
• "A headline" accounts — (term preserved from source text).
• Omnibus accounts — accounts that pool funds on behalf of multiple clients.

Joint and Solidarity Accounts

In a joint account, holders act in common. Typically the signature of more than one person is required for withdrawals, or all custodians of the funds must sign; thus all the holders, or at least two of them, will be simultaneous drawers of cheques.

In solidarity or indistinct accounts there are several owners and each of them can deal with the cash custodian, including withdrawing the entire balance.

Savings and Demand Accounts

Savings accounts in sight (demand deposits) are irregular contracts: cash deposits refundable at any time. They are often associated with a safe or deposit box arrangement whereby the depository institution makes payments and collections according to the instructions of its clients.

Fixed-Term Deposits

Fixed (time) deposits are deposits of money immobilized in a credit for such time as is agreed between the institution and the client when the client provides the money. Time deposits often take the form of certificates of deposit, which are negotiable documents that can be endorsed to others.

Housing Savings Account

A housing savings account is a type of deposit. It can be structured as a checking account, savings account, or other account, with the balance being allocated to the first acquisition or renovation of a residence. If the funds in the account are used for other purposes, you lose the tax advantages; if you have already benefited from those advantages, you must return the money that was released improperly.

No more than €9,015.18 per year may be deposited (amount preserved from source text).

Term Deposits with Benchmark Returns

The deposits mentioned, also known as suspects (term preserved from source text), establish a specified period, usually more than two years. After this period the client retrieves the agreed amount — for example, 100% or 101% of the original investment — plus a percentage of appreciation that is linked to a benchmark index, for example the Ibex 35.