1.2 Deposits

Money can also take the form of deposits held in bank accounts by people (households) and companies. There are different types of deposit with different maturities, but only those deposits that can be quickly converted into cash or transferred are considered to be money in central banking terms, as they are closely linked to the spending plans of the private sector.

Types of deposit

Short-term deposits that can be paid out or transferred without delay, restriction or penalty are called “overnight deposits”. They are typically held on current accounts and used for cashless payments.

Other, slightly less liquid (readily available), types of deposit that are also considered to be money are savings deposits that can be paid out within three months following advance notification, as well as time deposits that have an agreed maturity of up to two years.

Longer-term deposits with a maturity of over two years, or savings deposits redeemable at notice with a notice period of over three months, are not considered to be money because they are rather less liquid and cannot be quickly converted into cash or transferred.

Interest rates

Deposits normally earn interest, which the bank pays to depositors for holding their money. Typically, the longer the bank can hold a deposit before returning it to the depositor, the higher the interest rate on that deposit will be. This influences the investment and saving decisions of households and companies and interest rates are therefore relevant to the analysis of monetary developments.

1.2.1 Statistics on deposits and bank interest rates

The statistics on deposit stocks, transactions and annual growth rates, as well as interest rates, are collected by Eurosystem central banks. They are made available on a monthly basis for all euro area countries with various breakdowns.

In [Date 1] the euro area overall interest rate for new deposits from households with an agreed maturity was [Value 1]%. The overall interest rate for new deposits from companies was [Value 2]%.

Growth rates and volumes of deposits

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Bank interest rates on deposits

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