Bank deposit accounts that offer the privilege of writing checks against the balance of funds in the account. These accounts are the primary type of demand deposits that are part of the M1 money supply.
A compensating balance is a sum of money deposited at a bank by a customer, which acts as a condition for the bank to lend money to the customer. It serves as a form of collateral or security for the loan.
Deposits in transit are checks or money that have been sent to a bank but have not yet been processed and recorded in the bank account or the monthly statement. These deposits need to be accounted for during bank reconciliation.
A Negotiable Certificate of Deposit (NCD) is a time deposit with a bank that can be sold in the secondary market. These large-denomination CDs are typically issued in amounts over $100,000 and pay interest either to the bearer or to the order of the depositor.
