Deposit Rate


Deposit Rate Meaning:
In deposit terminology, a term Deposit Rate refers to the amount of money paid out in interest by a bank or financial institution on cash deposits. Banks pay deposit rates on savings and other investment accounts.

Deposit Rate Example:
For example, a deposit interest rate will often be paid for cash deposited into savings and Money Market accounts. Savings accounts earn a rather low rate of interest, but cash deposited in certain other account types are also paid a deposit rate by banks and financial institutions. In essence, the Deposit Rate is the interest rate that a bank pays the depositor for the use of their money for the time period that the money is on deposit. Deposit interest rates can be either fixed for a certain period of time with a minimum amount of money on deposit, or it can be variable, which fluctuates and is not usually subject to early withdrawal penalties.