Deposit

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Not a little pot of cash with your name on it sitting in a vault in a wood-paneled office in Pall Mall, however much this figment of the popular imagination rides on, even in the minds of those — senior credit officers at investment banks, for example — who really should know better. As is neatly explained in the explanatory notes to the Dormant Bank and Building Society Accounts Act 2008:

A deposit in a bank or building society account constitutes a debt owed by the bank or building society to its customer. Although banks and building societies are free to make use of money received from customers (subject to prudential rules which aim to ensure the institution always retains an adequate capital base) the institution remains liable to repay the debt to its customer indefinitely.

That is right: bank deposit is basically a loan to the bank, repayable on demand (if an ordinary deposit account) or at the end of the agreed term (if a term deposit).

This gives a (demand) bank deposit special status under the Limitation Act 1980, since it is not payable at any time, unless it is asked for, so the limitation period never begins to run.

See also

• Cash
• Limitation Act 1980
• Dormant Bank and Building Society Accounts Act 2008
• Client money