Unit Four

Handling Withdrawals

Part A Background Information

In western commercial banks, deposits are usually classified as either demand deposit or time deposit.For the banking system as a whole, demand deposits form a much more significant part.Commonly called checking accounts, demand deposits are simply those funds left with the bank by firms or individuals for the convenience of making payment by the bank check process.They can be withdrawn at any time without notice the bank in advance.

Time deposit is usually called savings accounts.Theoretically speaking, the bank should be advised thirty days prior to the intended date of withdrawal, but in practice, however, withdrawals are almost always permitted without notice.An entry is normally made in a passbook at the time funds are deposited, and the passbook must be presented for withdrawal.However, there is another type of time deposit, known as a certificate of deposit or savings certificate.