A call deposit account is a bank account that functions like a hybrid of a savings and checking account since it lets you accrue interest and add or remove money as often as you want.
Learn more about how a call deposit account works, which pros and cons they come with, how you can get one, and how it compares to a time deposit account.
Definition and Examples of a Call Deposit Account
A call deposit account is a bank account that allows you to deposit money, earn interest, and still be able to freely withdraw your money when you need it.
In the United States, call deposit accounts tend to be checking accounts that earn interest and may require higher minimum balances to benefit from the best interest rates. Often, you’ll see these advertised as “advantage checking” accounts that may come with different tiers available depending on your balance.
Internationally, you’ll more often see call deposit accounts advertised as a way to invest your money in multiple currency options. For example, if you lived in South Africa, you might decide to open a call deposit account and convert your money into U.S. dollars. In some cases, you’ll need a minimum balance to earn interest. You could then withdraw your foreign currency when you need it, subject to any bank notice requirement, but a handling charge may apply for this kind of transaction.
How a Call Deposit Account Works
Call deposit accounts function much like other interest-bearing bank accounts in that the bank pays you interest in exchange for your depositing money they can use to extend credit to others. The interest you earn on these accounts may depend on what your balance is.
Some banks pay the same rate regardless of the balance and some pay a higher rate for balances up to, say, $10,000, then drop the rate for balances bigger than $10,000. Still, others may require a minimum balance to earn interest. The interest rates offered on these accounts can change based on market conditions and your bank’s decisions, so your actual returns can vary.
You can use many call deposit accounts as you would with a standard checking account: do online transfers, make mobile deposits, pay bills online, use ATMs, and get a debit card for purchases. You won’t be subject to any limits on how many withdrawals you can make each cycle or associated fees for excess withdrawals like you would with some savings accounts.
You also usually don’t have to wait a certain period of time to access your money or pay a penalty like you would with a certificate of deposit (CD).
After a regulation amendment in April 2020, banks are no longer required to cap savings account activity to six withdrawals a month.
Call deposit accounts can come with various requirements and fees. For example, you might have to:
- Deposit a minimum amount of money to open the account
- Maintain a certain balance to avoid paying for monthly maintenance or being dropped to a different tier.
Other fees are typical for other checking accounts and can apply to out-of-network ATM transactions, overdrafts and returned checks, or stopped payments.
Pros and Cons of a Call Deposit Account
Flexible access to your cash
Ability to earn interest
Minimum balances can apply
- Flexible access to your cash: Since it works much like a basic checking account, a call deposit account usually gives you the freedom to use your money whenever you need it. This helps if you need to make several transactions that might otherwise be limited and avoids hassles that come with CDs.
- Ability to earn interest: Call deposit accounts give you the flexibility of standard checking and the benefit of interest. Interest rates vary by bank, so make sure you shop around to find the best rate.
- Minimum deposit and balance requirements: Some banks set minimums for how much you first deposit and how much you need to keep in your account to earn interest. Not maintaining the minimum balance could mean a monthly maintenance fee, too.
- Account fees: Like other types of bank accounts, you can face fees for a variety of reasons such as using an out-of-network ATM, writing bounced checks, or not meeting minimum balance requirements.
Call Deposit Account vs. Time Deposit Account
Call deposit accounts contrast with time deposit accounts, also known as certificates of deposit (CDs). While call deposits don’t have a maturity date, CDs commonly have a maturity of anywhere from weeks to months or years. You usually need to invest a minimum amount in a CD and can’t add to it like you could with a call deposit account.
Both CDs and interest-earning checking accounts qualify for the $250,000 of coverage through the Federal Deposit Insurance Corporation.
A CD offers the benefit of interest that may be higher than with a call deposit account. The rate may also be either fixed or variable. Since the bank intends for you not to withdraw funds from your CD until the end date, you’ll usually pay a penalty in the form of forfeited interest for early withdrawals. These features mean that CDs offer less liquidity and flexibility than call deposit accounts.
|Call Deposit Account||Time Deposit Account|
|High liquidity||Less liquidity|
|Has no set maturity date||Usually has set maturity date|
|Variable interest rate||Fixed or variable interest rate|
|Can make additional deposits||Usually can’t make additional deposits|
How To Get a Call Deposit Account
You can usually find call deposit accounts such as advantage checking accounts through banks and credit unions. However, you may consult international banks if you’re interested in investing in foreign currencies.
Your chosen bank may allow you to apply for the call deposit account online, or you might need to visit a branch. You’ll have to provide identification and you may need to provide an initial deposit.
- Call deposit accounts—often available as interest-earning checking accounts in the U.S.—offer interest like with a savings account and convenient access like with a standard checking account.
- Some call deposit accounts feature the ability to invest money in different currencies.
- While you often don’t have to give your financial institution advance notice, international banks may require it for all or certain withdrawals from call deposit accounts.
- Call deposit accounts can have minimum deposit and balance requirements and fees, but they offer perks like high liquidity, interest, and multiple currency options.
- A time deposit account, or certificate of deposit, contrasts with call deposit accounts since they have a set term, less liquidity, early withdrawal penalties, and usually allow for just one deposit.
Board of Governors of the Federal Reserve System. "CA 21-6: Suspension of Regulation D Examination Procedures." Accessed Nov. 15, 2021.
Federal Reserve. "CA 21-6: Suspension of Regulation D Examination Procedures." Accessed Nov. 15, 2021