Somebody I know told me they put money in the bank (for an Xmas fund idek) and they told me the bank is holding it until October 1st... And that it was originally supposed to be longer but it isn't. I feel like that's completely impossible, right? Like this person doesn't owe the bank any money/ Ect, so why are they holding it. Are there even bank accounts like that?

Thank you

It depends on the account type. A CD is a great example of this. You purchase the CD and the bank holds it for a set amount of time and then they give the money back plus interest. A very small amount of interest, mind you. It could also be a christmas club account or something similar. You pay into it whenever you can and the bank releases it to you just before christmas. With both of these accounts, you can withdraw money early; however, the bank will most likely charge you hefty penalty fees. The reason banks do this is to encourage you to leave your money in your account. The money from savings accounts, CDs, and the like is what banks use to issue loans. They use your money while you're not, and then pay you back when you ask for it. That is a very simplified version of the banking system.

Sounds like a CD.

A bank can hod a term deposit for the length of the term.

Yes banks can do that. See, that person you know signed a contract asking the bank to hold the money for them.

its called a 'savings account'.

bless your heart - its a wonder you even know how to breathe.