We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Checkable Deposits?

Mary McMahon
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Checkable deposits are funds deposited in accounts that people can quickly access without any restrictions or limitations. The funds can be rapidly and easily transferred to other people by a variety of means, and such accounts are highly liquid in nature, acting very much like cash for the account holder. When banks calculate their reserve requirements, they are required to count their checkable deposits. Reserve requirements are intended to ensure that banks have enough cash on hand to meet the need from their customers.

One example of this type of deposit is a checking or savings account. People can access the funds in the account on demand by walking into a bank and making a withdrawal or using an automatic teller machine with a bank card. Checks and drafts can be written against such accounts, and people can also transfer funds electronically. Negotiable order withdrawal (NOW) accounts that bear interest are another example, as are money market accounts.

In all cases, people have a variety of means for accessing the funds in the account and can access the account at any time. Drafts and checks written against it are honored as long as there are sufficient funds to cover them or the customer has an overdraft agreement. People can deposit funds as often as they want and can also receive deposits electronically from other sources. Online banking can allow people to schedule movements of funds to and from these accounts during the day or night.

This contrasts with time deposits that place limits on how and when people can withdraw money. Certificates of deposit are an example of this type, as people are only allowed to withdraw funds from such accounts if they pay a penalty. In addition, there are usually limits on the total number of transactions per month. These are not checkable deposits because there are limitations on the account and the contents cannot be easily transferred to another party with an instrument like a check or draft.

Banks keep meticulous records documenting the funds in their care, the types of accounts those funds are currently stored in, and how those funds are being used. This documentation is used while calculating reserve requirements to see if a bank needs more cash on hand or can send cash to another location. Banks tend to limit cash-on-hand because it provides no benefits like earning interest or being usable for investments while it sits in a bank vault.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By Monika — On Jun 28, 2011

Checking accounts are quite convenient. However I prefer to use cash. I'm so bad at keeping track of my purchases I always end up over drafting my account and those fees are killer!

By ceilingcat — On Jun 26, 2011

@JessicaLynn - That is why you should keep your money in both checkable deposits and time deposits. Ideally you should have money for bills and spending in the checking account and savings in some kind of time deposit account to earn interest.

By JessicaLynn — On Jun 25, 2011

Checking accounts are great because of the liquidity of the funds. However you definitely make a trade off on the interest rate. Most checking accounts have so low of an interest rate it barely makes any difference!

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.