depositor

A depositor is a person or organization that places money or other assets with a financial institution for safekeeping and, in many cases, for earning interest. In banking, deposits create a liability for the institution: the bank owes the depositor a refund of the deposited funds on demand or at a stated maturity, depending on the type of account.

Depositors commonly use a range of account types. Demand or checking accounts provide immediate access to funds and typically carry little or no interest. Savings accounts offer modest interest with some limits on withdrawals. Time deposits, such as certificates of deposit, have fixed terms and often higher interest rates. Depositors may also place funds with other financial institutions, credit unions, or brokerages, each with its own terms and protections.

Deposit insurance is a key feature in many jurisdictions. Government-backed schemes guarantee a portion of depositor funds if an institution fails, up to specified limits. In the United States, for example, the Federal Deposit Insurance Corporation insures deposits at FDIC-member banks up to the insured limit per depositor, per bank. Similar protections exist in other countries, though the coverage amount and rules vary.

Depositors have rights and responsibilities defined by account agreements, including access to funds, periodic statements, disclosures of terms and fees, and compliance with regulatory requirements such as identity verification and anti-money laundering rules. They are typically creditors of the institution up to the amount of their insured and uninsured deposits, and their relationship is distinct from that of borrowers or guarantors.