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
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.