Definition of a Passbook

When you open a savings account with a bank, the institution will give you a passbook, which contains the records of your transactions. A passbook helps keep track of your deposits into and withdrawals from your savings account.

Facts

A savings institution will issue you a passbook when you open a savings account. A savings account is a deposit account on which you earn interest. It differs from a checking account in that you cannot withdraw money with a check. Whenever you withdraw money from your savings account, a bank employee records the details of the withdrawal in your passbook. These include the amount you withdrew, what you have left in your account and the date of your withdrawal.

Significance

A passbook documents that you have a savings account with the institution. It contains, among other things, your name and your savings account number. If you lose your passbook, you must go to the savings institution to request a new copy, for which you might have to pay a fee.

Benefits

A passbook helps you keep track of your transactions, in terms of amounts and dates. It serves like a diary to record your savings amounts and withdrawals. From a passbook, you can readily note how much money you have in your savings account after making a withdrawal. Using this amount and your knowledge of how much interest the savings institution pays you, you can calculate how much money you currently have in your savings account.

References

• Investor Words: Passbook definition
• Business Dictionary: Depository institution definition
• Investopedia: Savings Account Definition