What is a deposit account and could it be right for you?
A deposit account is a bank account designed to hold savings and pay interest on the money deposited. Depending on the account, you may be able to access your money straight away, after giving notice or only when an agreed fixed term ends. People commonly use deposit accounts to separate savings from everyday spending and earn a return while keeping their money with a bank.
There is no single type of deposit account that is right for everyone. The most suitable option will depend on factors such as when you may need the money, whether you are comfortable leaving it untouched for a period and whether the interest rate is fixed or variable. This guide explains the main account types, how they work and what to compare before making a decision.
Deposit account explained
In simple terms, a deposit account is a type of savings account. You place money with a bank and may earn interest in return. The way interest is calculated, when it is paid and how easily you can withdraw your money will depend on the account terms.
Deposit accounts are different from current accounts, which are mainly designed for day-to-day transactions such as receiving income, paying bills and making card payments. If money is being kept for a future goal rather than everyday spending, it can be useful to compare dedicated savings options. Our guide on reasons to move your savings from a current account explains this distinction in more detail.
What types of deposit accounts are available?
There are a few types of deposit accounts:
- Fixed-term deposit accounts: You lock in your money for a set time and get a guaranteed interest rate at the end of the period.
- Notice deposit accounts: You give notice before withdrawing. These usually pay more than instant access accounts but less than fixed term deposits.
- Instant access savings: You can dip in anytime, but the interest rate is usually lower than notice or fixed-term deposit accounts.
- Demand deposit accounts: These are also known as instant access accounts where you can access your savings immediately. The interest rate is typically lower than fixed term deposit accounts and notice accounts.
The difference between these options is mainly the level of access they provide and the interest rate available. Accounts with fewer access restrictions may offer lower rates, while committing money for a set period may provide greater certainty about the return. If you are still deciding where to put your savings, it can help to begin with your goal and the timeframe in which you may need the money.
Deposit account types at a glance
How do deposit accounts work?
Although the details vary by product, most deposit accounts follow the same basic process:
You deposit money: You transfer money into the account. Some accounts accept regular lodgements, while others are designed for a single lump sum.
Interest accrues: Interest is calculated on the eligible balance in line with the account terms. Check whether the rate is fixed or variable, how often interest is calculated and when it is paid.
Access rules apply: An instant access or demand account normally allows withdrawals without notice. A notice account requires advance notice, while a fixed term account may restrict withdrawals until maturity.
The account may reach maturity: A fixed term deposit has an agreed end date. At maturity, the funds and interest due are dealt with in accordance with the account terms.
Tax may be deducted from interest: Deposit Interest Retention Tax, known as DIRT, is generally deducted by Irish financial institutions from deposit interest paid or credited to Irish residents. The tax treatment can depend on individual circumstances, so check current Revenue guidance.
If you are saving towards a particular target, it may also help to read our guide on how to manage savings and the benefits of saving. It covers ways to build a savings habit and keep your plan connected to your goals.
Here are some facts: 90% of Irish household savings1 are in on-demand accounts earning just 0.13% interest 2. That’s less than ideal and we think you deserve better.
These figures show why the account used to hold savings can matter. However, rates, access conditions and product features differ, so it is important to compare the full terms rather than looking at one feature in isolation.
Advantages and disadvantages of deposit accounts
Deposit accounts can provide a straightforward way to hold savings and earn interest, but they also involve trade-offs. The points below are general and the exact position will depend on the product terms.
Deposit account vs savings account: what is the difference?
A savings account is generally a type of deposit account. “Deposit account” is a broad term that can cover instant access, demand, notice and fixed term accounts. “Savings account” is often used for accounts intended to help customers put money aside, particularly accounts that allow ongoing deposits or easier access.
The labels used by providers can differ, so the name alone may not tell you how the account works. Compare the interest rate, access conditions, minimum or maximum balance, term, withdrawal rules and what happens at maturity. If you are looking for practical ways to make more of the money you have already set aside, our guide on how to grow your savings explores further considerations.
What should you consider when comparing deposit accounts?
Before choosing an account, consider the following questions:
- When might you need access to the money?
- Is the interest rate fixed or variable?
- When is interest calculated and paid?
- Is there a minimum or maximum deposit?
- Are withdrawals restricted, and what happens if you need money early?
- What happens when a fixed term reaches maturity?
- Which deposit protection scheme applies, and what are its limits and conditions?
If you have received a one-off amount and are reviewing your options, our article on the best ways to invest a lump sum provides a broader educational overview. Investing and depositing money involves different risks, access conditions and potential returns, so they should not be treated as the same decision.
How Bankinter Deposit Plus works
Bankinter Deposit Plus is one example of a fixed term deposit account available to Irish savers. The product information below has been retained so you can see how its features compare with the general points covered in this guide.
We’re here to offer real value. Deposit Plus is built for people who want more from their savings - great rates and more flexibility.
Here’s what makes Bankinter’s Deposit Plus account stand out:
- Competitive interest rates, because your money should work as hard as you do.
- Simple, transparent terms - no jargon, no hidden fees.
- Deposit any amount from €2,000 to €2 million.
- Access to 25% of your funds after the initial 8 weeks - giving you flexibility without compromising your savings goals.
- Digital-first experience with full control from our mobile app. Trustworthy and secure - backed by one of Europe’s most respected banks. The Deposit Guarantee Scheme (DGS) protects customer deposits to a maximum value of €100,000 per customer.
How to open a Deposit Account with Bankinter
Opening a Deposit Plus account is refreshingly simple. Here’s how:
1. Visit our website. Everything you need is right there - clear, honest, and easy to understand.
2. Pick your deposit type: Choose the term and rate that works best for you.
3. Apply online: Fill out a form online, verify your identity, and you’re good to go.
4. Start saving: Transfer your funds and watch your savings grow.
5. Stay in control: Manage everything from your phone or laptop - no queues, no paperwork.
Frequently asked questions about deposit accounts
What is a demand deposit account?
A demand deposit account allows you to access your money without giving advance notice. It is commonly used for savings that may be needed at short notice. Interest rates and other conditions vary by provider.
What is a fixed term deposit account?
A fixed term deposit account holds money for an agreed period at a rate set out in the account terms. Access is normally restricted during the term, and the account reaches maturity on an agreed date.
How does a fixed term deposit account work?
You place money into the account for a set term. Interest accrues in line with the agreed rate and product terms. When the term ends, the account matures and the funds and interest due are handled according to those terms.
Is a deposit account a savings account?
A savings account is generally a type of deposit account. Deposit accounts are a wider category that can include instant access, demand, notice and fixed term products.
What is the difference between a demand savings account and a term deposit?
A demand savings account normally gives immediate access to money. A term deposit asks you to leave money in place for an agreed period and may restrict withdrawals until maturity.
What is an instant access demand account?
An instant access demand account is an account that normally lets you withdraw savings without notice. This flexibility may be reflected in the interest rate offered.
Is a deposit account safe?
Deposit accounts are generally considered lower risk than investments whose values can rise and fall. Protection also depends on the institution and the applicable scheme. Check which deposit guarantee scheme applies and its eligibility rules, limits and conditions.
Do I pay tax on deposit account interest?
Deposit interest paid or credited to Irish residents is generally subject to Deposit Interest Retention Tax, or DIRT, which is deducted by Irish financial institutions. Exemptions or other obligations may apply in some circumstances, so check the latest Revenue guidance for your position.
Is a deposit account better than a savings account?
A savings account is usually a type of deposit account, so one is not automatically better than the other. The more useful comparison is between the specific accounts, including their rates, access rules, terms and deposit requirements.