Demand Deposit Account
DDA is a term usually used in finance that is an abbreviation for “Demand Deposit Account”. This is a type of a checking account where the account holder can withdraw their funds “on demand”, or anytime. Oftentimes, employers like to use these types of accounts to deposit their employees’ salary.
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- A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account held at a bank or other financial institution.
- Print Slips Business on demand on any standard letter size white paper. OnlineCheckWriter.Com is a cloud-based deposit slip software. We have added the slip templates for you. When you add a Bank Account to create Checks, the corresponding slips template will be loaded into the system automatically.
DDA Debit Charge
In this case, DDA means “Direct Debit Authorization“. This term is usually used in USAA bank accounts.
The DDA Debit Charge is sometimes referred to as DDA Purchase or DDA Pur. It is the status of a charge that is still “pending” on your account. Once the transaction fully goes through, the name will be updated to reflect the actual charge.
It is best to check if you have any automatic payments set for that specific amount, because in most cases, it is a pre-approved transaction that is still processing.
How Demand Deposit Account Differs from Other Bank Account Types
Some individuals would go to the bank and open up a Money Market Account. This other type of bank account cannot be withdrawn whenever you want. A DDA, on the other hand, is always available for withdrawal at any time.
- A Demand Deposit Account has lesser interest compared to other types of bank accounts.
- If you are depositing to a bank and you think you might need it in the near future, tell your bank to open a DDA.
- DDAs can be accessed using checks, debit cards, and other electronic methods.
What is DDA Credit?
Sometimes, accounts would have a negative balance or a lot of overdraft transactions. This occurrence is called DDA credit and often results to the account being closed. Most banks would automatically close accounts with DDA Credits when the negative balance is not settled within 30 days.
Some terms to take note of:
- Overdraft – When an account has greater amount of withdrawals than what was actually deposited
- Charge off – When the bank assumes that the debt or overdraft cannot be collected or paid
Foreign Currency Accounts
The same concepts as above apply if you withdraw or deposit money with a forex broker. The charge is initially displayed as a DDA charge, and then it should be updated to include the appropriate broker name.
Demand Deposit Account Examples
Now Account Definition
Source:Board of Governors of the Federal Reserve System (US)
Release:H.6 Money Stock Measures
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Notes:
The demand deposits component of M1 is defined as total demand deposits at commercial banks and foreign related institutions other than those due to the U.S. government, U.S. and foreign depository institutions, and foreign official institutions. In order to avoid double counting those deposits that are simultaneously on the books of two depository institutions, the demand deposit component of M1 excludes cash items in the process of collection (CIPC) and Federal Reserve float. Demand deposits due to depository institutions in the United States and the U.S. government, as well as other demand deposits and CIPC are reported on the FR 2900 and, for institutions that do not file the FR 2900, are estimated using data reported on the Call Reports. Demand deposits held by foreign banks and foreign official institutions are estimated using data reported on the Call Reports. Federal Reserve float is obtained from the consolidated balance sheet of the Federal Reserve Banks, which is published each week in the Federal Reserve Board's H.4.1 statistical release.
Suggested Citation:
Board of Governors of the Federal Reserve System (US), Demand Deposits: Total [DEMDEPSL], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/DEMDEPSL, March 5, 2021.
H.6 Money Stock Measures
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