Income
Recurring Deposits: Definition & Example
What Is Recurring Deposits?
Recurring deposits are payments that land in a bank account on a regular, repeating pattern, such as a paycheck every two weeks or a monthly benefit, and are commonly treated as signs of ongoing income.
What does recurring deposits mean?
When income is analyzed from bank data, deposits are grouped by source and timing. A deposit from the same payer arriving on a predictable schedule, such as weekly, biweekly, semimonthly, or monthly, is flagged as recurring.
Recurring deposits are the backbone of transaction-based income estimates because they suggest income that is likely to continue. Examples include payroll, Social Security, pensions, disability benefits, rental income, and regular client retainers.
In a bank-based context, "recurring deposit" means a repeating incoming payment. In some countries, it also names a savings product where you deposit a fixed amount each month. That is a different meaning.
Recurring deposits example
An applicant’s connected account shows a $1,842 deposit from "ACME CORP PAYROLL" every other Friday for the past 11 months and a $950 monthly deposit from the Social Security Administration. Both are identified as recurring income. A one-time $3,000 transfer from another account is not.
Related terms
- Non-Recurring DepositsNon-recurring deposits are one-time or irregular deposits, such as tax refunds, transfers between accounts, loan proceeds, or gifts, that are usually excluded from ongoing income estimates.
- Payroll DepositA payroll deposit is an employee’s net paycheck sent electronically by an employer or payroll provider into the employee’s bank account, usually through the ACH network.
- Direct DepositDirect deposit is an electronic payment sent straight into a recipient’s bank account, most commonly used for paychecks, government benefits, and tax refunds.
- Income ContinuityIncome continuity is the likelihood that a source of income will keep being received in the future, often judged by its history and any known end date.
- Transaction CategorizationTransaction categorization is labeling each bank or card transaction by type, such as payroll, rent, groceries, transfer, or loan payment, so the data can be summarized and analyzed.
