Types of Bank Accounts

• Savings account. This is the simplest bank account. The business deposits money in the bank for safekeeping. The account may have a minimum balance requirement to earn a minimal interest. Some

  savings accounts use a passbook for cash deposits and cash withdrawals. Withdrawal slips support cash withdrawals. A passbook is a booklet used to record bank transactions.
• Checking or current account. it is one where the depositor can issue bank checks, signing the same, and giving the check to the payee for encashment or for deposit within a bank. Bank check is also an acceptable form of payment and allows depositors to pay a large sum of cash using a sheet of paper instead of a cash on hand. Unlike savings account, checking accounts rarely earn interests because of the fast turnover of transactions.
• Time deposit. This type of bank deposit is evidenced by a formal agreement embodied in an instrument called certificate of deposit. Like savings account, this is interest-bearing. However, the depositor agrees not to withdraw the funds over the contracted period in exchange for foxed interest rates that are higher deposit rates. It may be preterminated or withdrawn on demand or after a certain period of time agreed upon.