Demand deposit account (DDA)
A bank account, such as a checking account, that lets the holder withdraw or move funds at any time without advance notice.
What a demand deposit account is
A demand deposit account (DDA) is a bank deposit the holder can withdraw at any time, without notice or penalty. A checking account is the typical example. Under the Federal Reserve's Regulation D, demand deposits are payable on demand. They support everyday payments such as debit cards, checks and transfers.
How it works
The bank holds the funds and keeps the account ledger. Money moves in and out through payment rails linked to the account, such as ACH, wires, instant payments, card networks and checks. Fintech programs often open DDAs at a partner bank through APIs.
- 01 · OPEN The bank verifies the customer's identity and opens the account.
- 02 · FUND Money arrives by direct deposit, ACH, wire, instant payment or check.
- 03 · USE The holder spends or moves funds at any time by card, transfer or check.
| Account | Access to funds | Typical use |
|---|---|---|
| Checking (usually a demand deposit) | At any time, without notice | Everyday payments and payroll |
| Savings | On request; banks can require seven days' notice and limit withdrawals | Holding balances and earning interest |
| Certificate of deposit | At maturity; early withdrawal can cost a penalty | Fixed-term savings |
The federal six-per-month limit on convenient savings transfers ended in 2020, but banks can still set their own limits.
When businesses use it
- Operating accounts for receiving revenue and paying bills
- Payroll and payout accounts that fund ACH and card payments
- Consumer checking held at a partner bank and offered through a neobank app
- Custodial accounts that hold customer funds, such as an FBO account
Cross River offers checking, savings and custodial account programs through APIs, so partners can offer demand deposit accounts held at the bank. Programs include unlimited subledgers and multi-rail money movement. See accounts at Cross River.