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Transaction Account

Overview#

Transaction Account is a deposit account held at a bank or other Financial Institution which is often referred to as a Account Servicing Payment Service Provider

Transaction Account is available to the account owner "on demand" and is available for frequent and immediate access by the Account owner or to others as the Account owner may direct.

Access may be in a variety of ways, such as cash withdrawals, use of cheques (checks) and debit by electronic transfer.

In economic terms, the funds held in a Transaction Account are regarded as liquid funds and in accounting terms they are considered as cash.

Some common terms used for Transaction Account

  • Demand Deposit Account - checking account
  • Savings Account - Transaction Account which that pays interest but cannot be used directly as Currency-exchange in the narrow sense of as a medium of exchange (for example, by writing a cheque).
    These accounts let customers set aside a portion of their liquid assets while earning a monetary return. This account is followed by another account known as Fixed deposit account.

More Information#

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