Consolidated Reports of Condition and Income

FFIEC 031 and 041

RC-E - DEPOSITS

Definitions (cont.)
charged to the control accounts of the various deposit categories on the general ledger, should be
credited to (added back to) the appropriate deposit control totals and reported in Schedule RC-F, item 6,
"All other assets.”

T

The Monetary Control Act of 1980 and the resulting revision to Federal Reserve Regulation D, "Reserve
Requirements of Depository Institutions," established, for purposes of federal reserve requirements on
deposit liabilities, a category of deposits designated as "transaction accounts." The distinction between
transaction and nontransaction accounts is discussed in detail in the Glossary entry for "deposits.”
NOTE: Money market deposit accounts (MMDAs) are regarded as savings deposits and are specifically
excluded from the "transaction account" classification.
Summary of Transaction Account Classifications (See the Glossary entry for "deposits" for detailed
definitions and further information.)
A. Always regarded as transaction accounts:

AF

1. Demand deposits.
2. NOW accounts.
3. ATS accounts.

4. Accounts (other than savings deposits) from which payments may be made to third parties by
means of an automated teller machine (ATM), a remote service unit (RSU), or another electronic
device, including by debit card.
5. Accounts (other than savings deposits) that permit third party payments through use of checks,
drafts, negotiable instruments, or other similar instruments.
B. Deposits or accounts that are regarded as transaction accounts if the following specified conditions
exist:

R

1. Accounts that otherwise meet the definition of savings deposits but that authorize or permit the
depositor to exceed the transfer and withdrawal rules for a savings deposit.

D

2. Any deposit or account that otherwise meets the definition of a time deposit but that allows
withdrawals within the first six days after the date of deposit and that does not require an early
withdrawal penalty of at least seven days' simple interest on amounts withdrawn within those first
six days, unless the deposit or account meets the definition of a savings deposit. Any such
deposit or account that meets the definition of a savings deposit shall be reported as a savings
deposit, otherwise it shall be reported as a demand deposit, which is a transaction account.
3. The remaining balance of a time deposit from which a partial early withdrawal is made, unless the
remaining balance either (a) is subject to additional early withdrawal penalties of at least seven
days' simple interest on amounts withdrawn within six days after each partial withdrawal (in which
case the deposit or account continues to be reported as a time deposit) or (b) is placed in an
account that meets the definition of a savings deposit (in which case the deposit or account shall
be reported as a savings deposit). Otherwise, the deposit or account shall be reported as a
demand deposit, which is a transaction account.

FFIEC 031 and 041

RC-E-4
(12-18)

RC-E - DEPOSITS

FFIEC 031 and 041

RC-E - DEPOSITS

Summary of Transaction Account Classifications (cont.)
C. Not regarded as transaction accounts (unless specified above):
1. Savings deposits (including accounts commonly known as money market deposit accounts
(MMDAs)).
2. Accounts that permit telephone or preauthorized transfers or transfers by ATMs or RSUs to repay
loans made or serviced by the same depository institution.

T

3. Accounts that permit telephone or preauthorized withdrawals where the proceeds are to be
mailed to or picked up by the depositor.

D

R

AF

4. Accounts that permit transfers to other accounts of the depositor at the same institution through
ATMs or RSUs.

FFIEC 031 and 041

RC-E-4a
(9-09)

RC-E - DEPOSITS

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
(4) outstanding draft (including advice or authorization to charge a bank's or a savings
association's balance in another bank or savings association), cashier's check, money order,
or other officer's check issued in the usual course of business for any purpose, including
without being limited to those issued in payment for services, dividends, or purchases, and

T

(5) such other obligations of a bank or savings association as the Board of Directors [of the
Federal Deposit Insurance Corporation], after consultation with the Comptroller of the
Currency and the Board of Governors of the Federal Reserve System, shall find and
prescribe by regulation to be deposit liabilities by general usage, except that the following
shall not be a deposit for any of the purposes of this Act or be included as part of the total
deposits or of an insured deposit:
(A) any obligation of a depository institution which is carried on the books and records of an
office of such bank or savings association located outside of any State, unless –
(i) such obligation would be a deposit if it were carried on the books and records of the
depository institution, and would be payable at, an office located in any State; and

AF

(ii) the contract evidencing the obligation provides by express terms, and not by
implication, for payment at an office of the depository institution located in any State;
and

(B) any international banking facility deposit, including an international banking facility time
deposit, as such term is from time to time defined by the Board of Governors of the
Federal Reserve System in regulation D or any successor regulation issued by the
Board of Governors of the Federal Reserve System; and

(C) any liability of an insured depository institution that arises under an annuity contract, the
income of which is tax deferred under section 72 of title 26 [the Internal Revenue Code].

R

(II) Transaction-nontransaction deposit distinction – The Monetary Control Act of 1980 and the current
Federal Reserve Regulation D, "Reserve Requirements of Depository Institutions," establish, for
purposes of federal reserve requirements on deposit liabilities, a category of deposits designated
as "transaction accounts." All deposits that are not transaction accounts are "nontransaction
accounts."

D

(1) Transaction accounts – With the exceptions noted below, a "transaction account," as defined
in Regulation D and in these instructions, is a deposit or account from which the depositor or
account holder is permitted to make transfers or withdrawals by negotiable or transferable
instruments, payment orders of withdrawal, telephone transfers, or other similar devices for
the purpose of making payments or transfers to third persons or others or from which the
depositor may make third party payments at an automated teller machine (ATM), a remote
service unit (RSU), or another electronic device, including by debit card.
Excluded from transaction accounts are savings deposits (both money market deposit
accounts (MMDAs) and other savings deposits) as defined below in the nontransaction
account category, even though such deposits permit some third-party transfers. However, an
account that otherwise meets the definition of a savings deposit but that authorizes or permits
the depositor to exceed the transfer limitations specified for that account shall be reported as
a transaction account. (Please refer to the definition of savings deposits for further detail.)

FFIEC 031 and 041

A-18
(12-18)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
NOTE: Under the Federal Reserve's current Regulation D, no transaction account,
regardless of its other characteristics, is classified either as a savings deposit or as a time
deposit. Thus, those transaction accounts that are not demand deposits – NOW accounts,
ATS (Automatic Transfer Service) accounts, and telephone and preauthorized transfer
accounts – are excluded from Regulation D time and savings deposits. For all items in the
Consolidated Reports of Condition and Income involving time or savings deposits, a strict
distinction, based on Regulation D definitions, is to be maintained between transaction
accounts and time and savings accounts.

T

Transaction accounts consist of the following types of deposits: (a) demand deposits;
(b) NOW accounts; (c) ATS accounts; and (d) telephone and preauthorized transfer
accounts, all as defined below. Interest that is paid by the crediting of transaction accounts is
also included in transaction accounts.

AF

(a) Demand deposits are deposits that are payable immediately on demand, or that are
issued with an original maturity or required notice period of less than seven days, or that
represent funds for which the depository institution does not reserve the right to require
at least seven days' written notice of an intended withdrawal. Demand deposits include
any matured time deposits without automatic renewal provisions, unless the deposit
agreement provides for the funds to be transferred at maturity to another type of
account. Effective July 21, 2011, demand deposits may be interest-bearing or
noninterest-bearing. Demand deposits do not include: (i) money market deposit
accounts (MMDAs) or (ii) NOW accounts, as defined below in this entry.
(b) NOW accounts are interest-bearing deposits (i) on which the depository institution has
reserved the right to require at least seven days' written notice prior to withdrawal or
transfer of any funds in the account and (ii) that can be withdrawn or transferred to third
parties by issuance of a negotiable or transferable instrument.
NOW accounts, as authorized by federal law, are limited to accounts held by:
Individuals or sole proprietorships;

(ii)

Organizations that are operated primarily for religious, philanthropic, charitable,
educational, or other similar purposes and that are not operated for profit. These
include organizations, partnerships, corporations, or associations that are not
organized for profit and are described in section 501(c)(3) through (13) and (19)
and section 528 of the Internal Revenue Code, such as church organizations;
professional associations; trade associations; labor unions; fraternities, sororities
and similar social organizations; and nonprofit recreational clubs; or

R

(i)

D

(iii) Governmental units including the federal government and its agencies and
instrumentalities; state governments; county and municipal governments and their
political subdivisions; the District of Columbia; the Commonwealth of Puerto Rico,
American Samoa, Guam, and any territory or possession of the United States and
their political subdivisions.
Also included are the balances of all NOW accounts of certain other nonprofit
organizations that may not fall within the above description but that had established
NOW accounts with the reporting institution prior to September 1, 1981.

FFIEC 031 and 041

A-19
(12-18)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
NOTE: There are no regulatory requirements with respect to minimum balances to be
maintained in a NOW account or to the amount of interest that may be paid on a NOW
account.

T

(c) ATS accounts are deposits or accounts of individuals or sole proprietorships on which
the depository institution has reserved the right to require at least seven days' written
notice prior to withdrawal or transfer of any funds in the account and from which,
pursuant to written agreement arranged in advance between the reporting institution and
the depositor, withdrawals may be made automatically through payment to the
depository institution itself or through transfer of credit to a demand deposit or other
account in order to cover checks or drafts drawn upon the institution or to maintain a
specified balance in, or to make periodic transfers to, such other accounts.

AF

Some institutions may have entered into agreements with their customers providing that
in the event the customer should overdraw a demand deposit (checking) or
NOW account, the institution will transfer from that customer's savings account an
amount sufficient to cover the overdraft. The availability of the overdraft protection plan
would not in and of itself require that such a savings account be regarded as a
transaction account provided that the overall transfer and withdrawal restrictions of a
savings deposit are not exceeded. Please refer to the definition of savings deposit for
further detail.

R

(d) Telephone or preauthorized transfer accounts consist of deposits or accounts, other
than savings deposits, (1) in which the entire beneficial interest is held by a party eligible
and
to hold a NOW account, (2) on which the reporting institution has reserved the right to
require at least seven days' written notice prior to withdrawal or transfer of any funds in
the account, and (3) under the terms of which, or by practice of the reporting institution,
the depositor is permitted or authorized to make more than six withdrawals per month or
statement cycle (or similar period) of at least four weeks for purposes of transferring
funds to another account of the depositor at the same institution (including a transaction
account) or for making payment to a third party by means of preauthorized transfer, or
telephonic (including data transmission) agreement, order or instruction. An account
that permits or authorizes more than six such withdrawals in a "month" (a calendar
month or any period approximating a month that is at least four weeks long, such as a
statement cycle) is a transaction account whether or not more than six such withdrawals
actually are made in the "month."
A "preauthorized transfer" includes any arrangement by the reporting institution to pay a
third party from the account of a depositor (1) upon written or oral instruction (including
an order received through an automated clearing house (ACH)), or (2) at a
predetermined time or on a fixed schedule.

D

Telephone and preauthorized transfer accounts also include:
(i)

FFIEC 031 and 041

Deposits or accounts maintained in connection with an arrangement that permits
the depositor to obtain credit directly or indirectly through the drawing of a
negotiable or nonnegotiable check, draft, order or instruction or other similar
device (including telephone or electronic order or instruction) on the issuing
institution that can be used for the purpose of making payments or transfers to third
parties or others, or to another deposit account of the depositor.

A-20
(12-18)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
(ii)

The balance of deposits or accounts that otherwise meet the definition of time
deposits, but from which payments may be made to third parties by means of a
debit card, an automated teller machine, remote service unit or other electronic
device, regardless of the number of payments made.

However, an account is not a transaction account merely by virtue of arrangements that
permit the following types of transfers or withdrawals, regardless of the number:
Transfers for the purpose of repaying loans and associated expenses at the same
depository institution (as originator or servicer).

(ii)

Transfers of funds from this account to another account of the same depositor at
the same depository institution when made by mail, messenger, automated teller
machine, or in person.

T

(i)

AF

(iii) Withdrawals for payment directly to the depositor when made by mail, messenger,
automated teller machine, in person, or by telephone (via check mailed to the
depositor).

(2) Nontransaction accounts – All deposits that are not transaction accounts (as defined above)
are nontransaction accounts. Nontransaction accounts include: (a) savings deposits
((i) money market deposit accounts (MMDAs) and (ii) other savings deposits) and (b) time
deposits ((i) time certificates of deposit and (ii) time deposits, open account). Regulation D
no longer distinguishes between money market deposit accounts (MMDAs) and other
savings deposits. However, these two types of accounts are defined below for purposes of
these reports, which call for separate data on each in Schedule RC-E, (part I,) Memorandum
items 2.a.(1) and (2).
NOTE: Under the Federal Reserve's current Regulation D, no transaction accounts,
regardless of other characteristics, are defined as savings or time deposits. Thus, savings
deposits as defined here, under the heading nontransaction accounts, constitute the entire
savings deposit category. Likewise, time deposits, also defined here under nontransaction
accounts, constitute the entire time deposits category.

R

(a) Savings deposits are deposits with respect to which the depositor is not required by the
deposit contract but may at any time be required by the depository institution to give
written notice of an intended withdrawal not less than seven days before withdrawal is
made, and that is not payable on a specified date or at the expiration of a specified time
after the date of deposit.

D

The term savings deposit also means a deposit or account, such as an account
commonly known as a passbook savings account, a statement savings account, or a
money market deposit account (MMDA), that otherwise meets the requirements of the
preceding paragraph and from which, under the terms of the deposit contract or by
practice of the depository institution, the depositor is permitted or authorized to make no
more than six transfers and withdrawals, or a combination of such transfers and
withdrawals, per calendar month or statement cycle (or similar period) of at least four
weeks, to another account (including a transaction account) of the depositor at the same
institution or to a third party by means of a preauthorized or automatic transfer, or

FFIEC 031 and 041

A-21
(12-18)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
telephonic (including data transmission) agreement, order, or instruction; or by check,
draft, debit card, or similar order made by the depositor and payable to third parties.
Transfers from savings deposits for purposes of covering overdrafts (overdraft protection
plans) are included under the withdrawal limits specified for savings deposits.
There are no regulatory restrictions on the following types of transfers or withdrawals
from a savings deposit account, regardless of the number:

T

(1) Transfers for the purpose of repaying loans and associated expenses at the same
depository institution (as originator or servicer).
(2) Transfers of funds from this account to another account of the same depositor at
the same institution when made by mail, messenger, automated teller machine, or
in person.

AF

(3) Withdrawals for payment directly to the depositor when made by mail, messenger,
automated teller machine, in person, or by telephone (via check mailed to the
depositor).
Further, for a savings deposit account, no minimum balance is required by regulation,
there is no regulatory limitation on the amount of interest that may be paid, and no
minimum maturity is required (although depository institutions must reserve the right to
require at least seven days' written notice prior to withdrawal as stipulated above for a
savings deposit).

Insert 1

Any depository institution may place restrictions and requirements on savings deposits
in addition to those stipulated above. In the case of such further restrictions, the
account would still be reported as a savings deposit.
On the other hand, an account that otherwise meets the definition of a savings deposit
but that authorizes or permits the depositor to exceed the six-transfer/withdrawal rule
shall be reported as a transaction account, as follows:

R

(1) If the depositor is ineligible to hold a NOW account, such an account is considered
a demand deposit.
(2) If the depositor is eligible to hold a NOW account, the account will be considered
either a NOW account, a telephone or preauthorized transfer account, or an ATS
account:

D

(a) If withdrawals or transfers by check, draft, or similar instrument are permitted
or authorized, the account is considered a NOW account.

(b) If withdrawals or transfers by check, draft, or similar instrument are not
permitted or authorized, the account is considered either an ATS account or a
telephone or preauthorized transfer account.

Regulation D no longer distinguishes between money market deposit accounts
(MMDAs) and other savings deposits. However, these two types of accounts are
defined as follows for purposes of these reports, which call for separate data on each.

FFIEC 031 and 041

A-22
(12-18)

GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
(1) Money market deposit accounts (MMDAs) are deposits or accounts that meet the
above definition of a savings deposit and that permit up to (but no more than) six
allowable transfers to be made by check, draft, debit card or similar order made by
unlimited
the depositor and payable to third parties.
transfers
(2) Other savings deposits are deposits or accounts that meet the above definition of a
savings deposit but that permit no transfers by check, draft, debit card, or similar
order made by the depositor and payable to third parties. Other savings deposits
are commonly known as passbook savings or statement savings accounts.

T

Examples illustrating distinctions between MMDAs and other savings deposits for
purposes of these reports are provided at the end of this Glossary entry.

AF

(b) Time deposits are deposits that the depositor does not have a right, and is not
permitted, to make withdrawals from within six days after the date of deposit unless the
deposit is subject to an early withdrawal penalty of at least seven days' simple interest
on amounts withdrawn within the first six days after deposit. A time deposit from which
partial early withdrawals are permitted must impose additional early withdrawal penalties
of at least seven days' simple interest on amounts withdrawn within six days after each transaction
account
partial withdrawal. If such additional early withdrawal penalties are not imposed, the
account ceases to be a time deposit. The account may become a savings deposit if it
meets the requirements for a savings deposit; otherwise it becomes a demand deposit.
NOTE: The above prescribed penalties are the minimum required by Federal Reserve
Regulation D. Institutions may choose to require penalties for early withdrawal in
excess of the regulatory minimums.
Time deposits take two forms:

Time certificates of deposit (including rollover certificates of deposit) are deposits
evidenced by a negotiable or nonnegotiable instrument, or a deposit in book entry
form evidenced by a receipt or similar acknowledgement issued by the bank, that
provides, on its face, that the amount of such deposit is payable to the bearer, to
any specified person, or to the order of a specified person, as follows:

R

(i)

(1) on a certain date not less than seven days after the date of deposit,
(2) at the expiration of a specified period not less than seven days after the date
of the deposit, or

D

(3) upon written notice to the bank which is to be given not less than seven days
before the date of withdrawal.

(ii)

Time deposits, open account are deposits (other than time certificates of deposit)
for which there is in force a written contract with the depositor that neither the whole
nor any part of such deposit may be withdrawn prior to:
(1) the date of maturity which shall be not less than seven days after the date of
the deposit, or
(2) the expiration of a specified period of written notice of not less than seven
days.

FFIEC 031 and 041

A-23
(12-18)

GLOSSARY

Insert 1
Treatment of Accounts where Reporting Institutions Have Suspended Enforcement of the Six Transfer
Limit per Regulation D
Where the reporting institution has suspended the enforcement of the six transfer limit rule on an
account that meets the definition of a savings deposit, the reporting institution may continue to report
such deposits as a savings account, or may choose to report them as transaction accounts based on
an assessment of the characteristics of the account as indicated below:
1) If the reporting institution does not retain the reservation of right to require at least seven days'

written notice before an intended withdrawal, report the account as a demand deposit.

T

2) If the reporting institution does retain the reservation of right to require at least seven days' written

notice before an intended withdrawal and the depositor is eligible to hold a NOW account, report the
account as either an ATS account, NOW account, or a telephone and preauthorized transfer account.
3) If the reporting institution does retain the reservation of right to require at least seven days' written

D

R

AF

notice before an intended withdrawal and the depositor is ineligible to hold a NOW account, the
account should continue to be reported as a savings deposit.

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
These deposits include those club accounts, such as Christmas club and vacation
club accounts, that are made under written contracts that provide that no withdrawal
shall be made until a certain number of periodic deposits has been made during a
period of not less than three months, even though some of the deposits are made
within six days of the end of such period.
Time deposits do not include the following categories of liabilities even if they have an
original maturity of seven days or more:

T

(1) Any deposit or account that otherwise meets the definition of a time deposit but that
allows withdrawals within the first six days after deposit and that does not require an
early withdrawal penalty of at least seven days' simple interest on amounts
withdrawn within those first six days. Such deposits or accounts that meet the
definition of a savings deposit shall be reported as savings deposits; otherwise they
shall be reported as demand deposits.

AF

(2) The remaining balance of a time deposit if a partial early withdrawal is made and the
remaining balance is not subject to additional early withdrawal penalties of at least
seven days' simple interest on amounts withdrawn within six days after each partial
withdrawal. Such time deposits that meet the definition of a savings deposit shall be
reported as savings deposits; otherwise they shall be reported as demand deposits.

Reporting of Retail Sweep Arrangements Affecting Transaction and Nontransaction Accounts –
In an effort to reduce their reserve requirements, some banks have established “retail sweep
arrangements” or “retail sweep programs.” In a retail sweep arrangement, a depository
institution transfers funds between a customer’s transaction account(s) and that customer’s
nontransaction account(s) (usually savings deposit account(s)) by means of preauthorized or
automatic transfers, typically in order to reduce transaction account reserve requirements
while providing the customer with unlimited access to the funds.
two
There are three key criteria for retail sweep programs to comply with the Federal Reserve
Regulation D definitions of “transaction account” and “savings deposit:”

R

(1) A depository institution must establish by agreement with its transaction account
customer two legally separate accounts: a transaction account (a NOW account or
demand deposit account) and a savings deposit account, including those sometimes
called a “money market deposit account” or “MMDA”;

D

(2) The swept funds must actually be moved from the customer’s transaction account to the
customer’s savings deposit account on the official books and records of the depository
institution as of the close of the business on the day(s) on which the depository
institution intends to report the funds in question as savings deposits and not transaction
accounts, and vice versa. In addition to actually moving the customer’s funds between
accounts and reflecting this movement at the account level:
(a) If the depository institution’s general ledger is sufficiently disaggregated to
distinguish between transaction and savings deposit accounts, the aforementioned
movement of funds between the customer’s transaction account and savings
deposit account must be reflected on the general ledger.

FFIEC 031 and 041

A-24
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GLOSSARY

FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
(b) If the depository institution’s general ledger is not sufficiently disaggregated, the
distinction may be reflected in supplemental records or systems, but only if such
supplemental records or systems constitute official books and records of the
institution and are subject to the same prudent managerial oversight and controls as
the general ledger.

T

A retail sweep program may not exist solely in records or on systems that do not
constitute official books and records of the depository institution and that are not used
for any purpose other than generating its Report of Transaction Accounts, Other
Deposits and Vault Cash (FR 2900) for submission to the Federal Reserve; and
(3) The maximum number of preauthorized or automatic funds transfers (“sweeps”) out of a
savings deposit account and into a transaction account in a retail sweep program is
limited to not more than six per month. Transfers out of the transaction account and into
the savings deposit account may be unlimited in number.
either of these

AF

If any of the three criteria is not met, all swept funds must continue to be reported as
transaction accounts, both for purposes of these reports and of FR 2900 deposit reports.
All three criteria must be met in order to report the nontransaction account component of a
retail sweep program as a nonreservable savings deposit account.
both
Further, for purposes of the Consolidated Reports of Condition and Income, if all three of
the criteria above are met, a bank must report the transaction account and nontransaction
account components of a retail sweep program separately when it reports its quarter-end
deposit information in Schedules RC, RC-E, and RC-O; its quarterly averages in
Schedule RC-K; and its interest expense (if any) in Schedule RI. Thus, when reporting
quarterly averages in Schedule RC-K, a bank should include the amounts held in the
transaction account (if interest-bearing) and the nontransaction savings account components
of retail sweep arrangements each day or each week in the appropriate separate items for
average deposits. In addition, if the bank pays interest on accounts involved in retail sweep
arrangements, the interest expense reported in Schedule RI should be allocated between
the transaction account and the nontransaction (savings) account based on the balances in
these accounts during the reporting period.

R

For additional information, refer to the Federal Reserve Board staff guidance relating to the
requirements for a retail sweep program under Regulation D at
http://www.federalreserve.gov/boarddocs/legalint/FederalReserveAct/2007/20070501/200705
01.pdf.

(III) Interest-bearing-noninterest-bearing deposit distinction –

D

(a) Interest-bearing deposit accounts consist of deposit accounts on which the issuing depository
institution makes any payment to or for the account of any depositor as compensation for the
use of funds constituting a deposit. Such compensation may be in the form of cash,
merchandise, or property or as a credit to an account. An institution’s absorption of
expenses incident to providing a normal banking function or its forbearance from charging a
fee in connection with such a service is not considered a payment of interest.
Deposits with a zero percent interest rate that are issued on a discount basis are to be
treated as interest-bearing. Deposit accounts on which the interest rate is periodically
adjusted in response to changes in market interest rates and other factors should be reported
as interest-bearing even if the rate has been reduced to zero, provided the interest rate on
these accounts can be increased as market conditions change.

FFIEC 031 and 041

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(12-18)

GLOSSARY

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AF

D

R

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FFIEC 031 and 041

GLOSSARY

Deposits (cont.):
(b) Noninterest-bearing deposit accounts consist of deposit accounts on which the issuing
depository institution makes no payment to or for the account of any depositor as
compensation for the use of funds constituting a deposit. An institution’s absorption of
expenses incident to providing a normal banking function or its forbearance from charging a
fee in connection with such a service is not considered a payment of interest.

T

Noninterest-bearing deposit accounts include (i) matured time deposits that are not
automatically renewable (unless the deposit agreement provides for the funds to be
transferred at maturity to another type of account) and (ii) deposits with a zero percent stated
interest rate that are issued at face value.
See also "brokered deposits" and "hypothecated deposits."

Examples Illustrating Distinctions Between
MONEY MARKET DEPOSIT ACCOUNTS (MMDAs) and OTHER SAVINGS DEPOSITS

AF

Example 1

A savings deposit account permits no transfers of any type to other accounts or to third parties.
Report this account as an other savings deposit.
Example 2

unlimited

A savings deposit permits up to six, but no more than six, "preauthorized, automatic, or
telephonic" transfers to other accounts or to third parties. None of the third-party payments may be
made by check, draft, or similar order (including debit card).
Report this account as an other savings deposit.
Example 3

unlimited

R

A savings deposit permits no more than six "preauthorized, automatic, or telephonic" transfers to
other accounts or to third parties, any or all which may be by check, draft, debit card or similar order
made by the depositor and payable to third parties.
Report this account as an MMDA.

D

Derivative Contracts: Banks commonly use derivative instruments for managing (positioning or
hedging) their exposure to market risk (including interest rate risk and foreign exchange risk), cash flow
risk, and other risks in their operations and for trading. The accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in other contracts, and for
hedging activities are set forth in ASC Topic 815, Derivatives and Hedging (formerly FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended), which banks
must follow for purposes of these reports. ASC Topic 815 requires all derivatives to be recognized on
the balance sheet as either assets or liabilities at their fair value. A summary of the principal provisions
of ASC Topic 815 follows. For further information, see ASC Topic 815, which includes the
implementation guidance issued by the FASB's Derivatives Implementation Group.

FFIEC 031 and 041

A-25
(3-12)

GLOSSARY