Westpac has launched a new deposit product that may serve as a prototype for a major change in this market, as banks adjust to the new liquidity coverage ratio rules.Westpac Institutional Bank is offering its corporate customers a highly flexible deposit for managing their working capital. Depositors nominate a "notice period", of 31, 60, 90 or 180 days, and funds are put on hold for that period. Once the notice period has passed, the depositor can request a full or partial redemption of funds by submitting a new notice period. And, once the notice period has expired, the funds are at call.There is no minimum investment amount and customers can add funds to their account at any time. The account can be maintained indefinitely, so there is no need to roll funds into new accounts or renegotiate rates. The account can also be managed online.Westpac's head of corporate cash management, Daniel Moses, said: "We have replaced the maturity date [of a traditional term deposit] with a notice period."While the funds are on hold, Westpac will pay an interest rate that may be higher than the equivalent term deposit rate. Funds on notice receive a lower rate, and no interest is paid on funds at call.The product has been designed with an eye to the Basel III liquidity coverage ratio requirements, which will take effect in 2015.The LCR is intended to make sure banks can deal with a short-term liquidity crisis. Approved deposit-taking institutions will have to maintain an adequate level of high-quality liquid assets that can be converted into cash to meet liquidity needs for 30 days.To determine the appropriate LCR, banks must estimate their net cash outflow over 30 days under stressed conditions, with higher run-off rates applying to less stable deposits. It is this condition that is pushing banks to offer deposits that can't be withdrawn before 31 days.Westpac has come up with a kind of revolving term deposit - giving the bank access to stable deposits and customers more flexibility.