Redeosit

Redeosit is a term used in banking and finance to describe the act of depositing funds again after an initial withdrawal or after the funds have been moved into another instrument. The concept is commonly employed to manage liquidity, funding, and interest earnings, and it applies to individuals, businesses, and financial institutions.

Etymology: the word combines re- (again) with deposit.

In retail banking, redeposits occur when customers withdraw funds but later place them back into a savings account, certificate of deposit, or another deposit product. Banks often encourage redeposits through promotional rates or automatic renewal features, helping to stabilize the funds base and allow for more predictable interest accrual.

In wholesale funding and monetary operations, redeposits describe the practice of re-entering funds into a deposit facility after maturity, or rolling over deposits to extend the term. Such redeposits can be used to maintain liquidity, satisfy reserve requirements, or manage funding costs. In many markets, redeposits are structured as automatic renewals or rolling deposits that transition from maturing accounts to new terms.

Impact and considerations: Redeosit activity affects liquidity, funding costs, and the term structure of deposits. For consumers, redeposits can improve savings discipline; for institutions, they can stabilize funding but may expose the institution to interest rate risk if rates change between terms.

See also: deposit, term deposit, rollover, automatic renewal.