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LSDefine
Simple English definitions for legal terms
bank account
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A quick definition of bank account:
A bank account is a place where you can keep your money safe. It's like a special box that only you can open with a key. You can put money in and take money out whenever you need it. Sometimes, you can earn extra money by keeping your money in the account for a long time. It's important to keep track of how much money you have in your account so you don't spend more than you have.A more thorough explanation:
A bank account is a type of account that a person or business holds with a bank. It can be a demand account, time account, savings account, or passbook account. The account holder can deposit or withdraw money from the account, and the bank may pay interest on the balance.
Examples:
- John has a savings account with Bank A. He deposits $1000 into the account and earns 2% interest per year. After one year, he has $1020 in the account.
- Sarah has a checking account with Bank B. She writes a check for $50 to pay her phone bill. The bank deducts $50 from her account balance.
The examples illustrate how a bank account works. In the first example, John deposits money into his savings account and earns interest on the balance. In the second example, Sarah uses her checking account to pay a bill, and the bank deducts the amount from her account balance.