[Glossary](https://pecuvo.eu/en/glossary/) · Banking and payments # Deposit **In short:** a deposit is a sum you leave with a bank on agreed terms for duration and withdrawal, in return for interest, while the bank may use the money as it looks after it. **Simply put:** A deposit is on demand (withdraw any time, lower interest) or for a fixed term (money "locked"). Interest is paid at the end or added to the sum, so that it earns interest too — check how often. **Example:** A €10,000 deposit at 3% a year, interest added every quarter: 10,000 × (1 + 0.03/4)⁴ = €10,303.39. Without adding — €10,300. **Watch out:** the highest rate is not necessarily the best deposit. Compare the term, access to the money, fees, inflation and the guarantee. In the EU, deposits at licensed banks are covered by a deposit guarantee scheme up to €100,000 per depositor per bank (Directive 2014/49/EU). > **Example: Bulgaria** — a bank accepts deposits only on announced terms, the same for all customers (Credit Institutions Act, Article 57(1)). Interest on deposits at EU/EEA banks is not taxed for residents (Personal Income Tax Act, Article 13(1)(8); NRA). > > **Check in your country** — how interest on deposits is taxed (tax authority) and the bank's published deposit terms. **Source:** Directive 2014/49/EU: http://data.europa.eu/eli/dir/2014/49/oj · Credit Institutions Act, Article 57 — BNB (in Bulgarian): https://www.bnb.bg/bnbweb/groups/public/documents/bnb_law/laws_creditinstitutions_bg.pdf ## In depth in the modules - [Module 26](https://pecuvo.eu/en/modules/bank-and-financial-products/) - [Module 3](https://pecuvo.eu/en/modules/assets-and-cash-equivalents/) - [Module 4](https://pecuvo.eu/en/modules/the-mechanics-of-money/) ## Related terms - [Term deposit](https://pecuvo.eu/en/glossary/term-deposit/) - [Savings account](https://pecuvo.eu/en/glossary/savings-account/) - [Deposit guarantee](https://pecuvo.eu/en/glossary/deposit-guarantee/) - [Interest](https://pecuvo.eu/en/glossary/interest/) - [Compound interest (compounding and capitalisation)](https://pecuvo.eu/en/glossary/compound-interest/) - [Real and nominal interest rate](https://pecuvo.eu/en/glossary/real-interest-rate/)