Audit and Accounting Guide - Depository and Lending Institutions

Chapter 13 Deposits

Gray shaded text in this chapter reflects guidance issued but not yet effective as of the date of this guide, July 1, 2018, but becoming effective on or prior to December 31, 2018, exclusive of any option to early adopt ahead of the mandatory effective date. Unless otherwise indicated, all unshaded text reflects guidance that was already effective as of the date of this guide.

Introduction

13.01 Deposits are an important source of funds for banks, credit unions, and savings institutions. Finance and mortgage companies do not take insured deposits. Because a credit union’s members are also its owners, credit unions often refer to deposits as share accounts and related interest paid as dividends. Some credit unions permit nonmembers to deposit funds subject to certain restrictions.

13.02 Deposits are often an institution's most significant liability and interest expense on deposits an institution's most significant expense.

13.03 Deposits are generally classified by whether they bear interest, by their ownership (for example, public, private, interbank, or foreign), and by their type (for example, demand, time, and savings; or transaction and nontransaction). A description of various deposit products follows. These descriptions may not correspond to regulatory designations under the Board of Governors of the Federal Reserve System (Federal Reserve) Regulation D.

Demand Deposits¹

13.04 Demand deposits (often called transaction accounts or DDAs) are accounts ...