...Index Deposit Banking - Introduction 3 Origins 4 Demand deposits 6 Time deposits 7 Fractional-reserve Banking 8 Full-reserve Banking 10 Bibliography 13 Deposit Banking - Introduction Having money is not always as easy as it seems. Why keeping it at home when there are much safer institutions out there? But, bringing the money to a bank requires knowledge of how to deposit it and of what the bank is actually doing with it. Deciding between the possibility of withdrawing everything or even generating money by investing it for a longer period of time should be a crucial question for every investor. Moreover, the process of depositing it raises disputed questions on who is proprietor and on the possessor’s privilege to handle it. Bank deposits developed and changed throughout history. Farmers, looking for a place to protect their grains from theft, stored their harvest in warehouses in exchange for a receipt and the possibility to get it all back after redeeming it. Later on, owners of gold and silver used the same idea to store their more fungible goods at banks. At the beginning, those deposit banks obtained gain by demanding a fee for the time the good was deposed there. The depositor’s assets remained untouched. It is not difficult to imagine that those institutions succumbed to the temptation of taking them and loaning them away in order to expand their sources of income. This kind of activity is called embezzlement. It means to use entrusted...
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...Types of Bank Deposit Accounts a. Demand deposit/current deposit/Checking Account Funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution. Demand deposits can be "demanded" by an account holder at any time. Many checking and savings accounts today are demand deposits and are accessible by the account holder through a variety of banking options, including teller, ATM and online banking. there is no limit to the number of transactions a depositor can conduct with these accounts (although a bank may charge a fee for each transaction) A demand deposit is money that you deposit into a bank account from which you can withdraw 'on demand' - at any time without any advance notice to the bank. Common examples of accounts that are often demand deposit accounts include many checking and savings accounts. Keep in mind, however, that not all checking accounts and savings accounts are demand deposit accounts. b. Saving Deposits (local/foreign currency) An account at a bank in which the customer deposits money for any non-immediate use. For example, one may utilize a savings account to save funds for an expensive purchase, such as a house or a car. Because most customers keep money in a savings account for a longer period than a checking account, a savings account pays a slightly higher interest rate. However, the interest rate is not as high as a bond or another low-risk investment. Generally speaking...
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...Deposit Management Practices Of Bank Deposit Mangement: Deposit management consists of acquisitions of stable and low cost deposit for the banking business. Banks are not only dealers in money but also manufacturers of credit money. It is in the sense of manufacturing that the concept of credit creation is used. Similarly deposit creation is an important function of commercial banks. Without deposit they cannot lend at all. When the banks receive cash from customers, deposit are created . These deposits may be current, saving or fixed. Depositors choose the types on the basis of their needs and requirements like; safety, convenience or earning. People deposit their income in commercial banks because bank vault are safer that home coffers. The bank attracts deposits from the people either by means of offering interests or facilities. Business people want seek for facilities rather than interest. Non business people generally select deposits having interests. The type and characteristics of deposits are constantly changing as banks are offering new product to attract new consumers. unlike the past, people are nowadays more aware and have confidence on banks on such the banking habit growing gradually. Deposit management involves the collection of adequate bank deposits required for the efficient and effective operation of banking business. Deposit management doesn’t merely concern with the high volume but also with low cost as well and its stability so as to produce competitive...
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...Managing Personal Finances with Demand Deposit Accounts Summary: Demand deposit accounts offer individuals many different options and benefits when managing their personal finances. Deposit accounts can be used to manage everyday expenses, keep track of personal cash flow and save for the future while earning a return. There are many different types of deposit accounts, each offering a means to achieve specific goals. In the following pages, I will break down some different types of accounts, discuss their purpose and show how each one can make achieving personal financial goals a simpler, more attainable task. Demand Deposit Accounts, or DDAs, are accounts offered by financial institutions such as banks and credit unions that allow account holders to deposit and withdraw funds and perform many other types of transactions. These accounts are called demand accounts because they give the client access to funds upon demand, either limited or unlimited depending on the type of account. The main purpose of these accounts are to offer clients, personal or business, a secure means of storing, transferring, spending, or saving money. The first and most common type of DDA is a checking account. A checking account offers the convenience of being able to deposit and withdraw funds and issue checks, or drafts, to transfer money to any individual or business. This is a much safer way to keep money that is used for everyday expenses because it is insured by the federal government...
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...Deposit insurance tends to increase the likelihood of banking crises, the more so where bank interest rates are deregulated and the organized environment is weak. Also, the adverse impact of deposit insurance on bank stability tends to be stronger the more extensive the coverage offered to depositors, where the system is funded, and where it is run by the government rather than the private sector. The oldest system of national bank deposit insurance is the U.S. system, which was established in 1934 to avoid the extensive bank runs that subsidized to the Great Depression. It was not until the Post-War period, nonetheless, that deposit insurance initiated to spread around the world. Despite its increased service among policy makers, the desirability of deposit insurance remains a matter of some debate amongst economists. Whether or not deposit insurance is the best strategy to prevent depositor runs, all authors acknowledge that it is a source of moral hazard: as their ability to appeal deposits no longer imitates the risk of their asset collection, banks are encouraged to finance high-risk, high-return projects. As a result, deposit insurance may lead to more bank failures and, if banks take on risks that are correlated, systemic banking crises may become more frequent. The U.S. Savings & Loan crisis of the 1980s has been widely attributed to the moral threat created by a combination of generous deposit insurance, financial liberalization, and regulatory failure. Thus, according...
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...fixed deposit which is defacto choice for normal individual in India and considered as safe haven because there is certainty in returns, these days innovation in financial products gave normal investors flexibility in investing in fixed deposit like monthly fixed deposit where you invest certain sum monthly and counted as fixed deposit without the hassle of putting a lump sum value Lets look at how fixed deposit fairs when compared to different mutual fund scheme and evaluate the returns both of these financial instruments produce Fixed deposits vs. equity mutual fund: Equity markets offer highest return potential among any other asset classes i.e. if u look at Indian stock markets CAGR of 13% for 35 years but let’s take a example public sector of bank such as state bank of India which is safest bank in India fixed deposit offers 8 % patting up fixed deposit against equity mutual fund is unfair comparison but fixed deposit win with respect to risk which is no risk free fixed deposit need not be monitored only time when you think about fixed deposit is when you want to exit but equities need to be monitored and requires processing of information and capability of judgement but fixed deposit can be done by uneduacated also Fixed deposit vs debt mutual fund: Debt markets are fair comparison for fixed deposits because...
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...Finance M.Sc. Investment and Finance (2010/2011) “Deposit Insurance” Subject: Financial Markets, Financial Institutions and Banking Anjul Katyal Registration No: 20109 Lecturer: Juliane Thamm Date: 22nd November 2010 Abstract This paper shows the existence of deposit insurance in today’s complex economic situation. Deposit insurance schemes are present in most of the countries and are well-established in all developed economies.1 Deposit insurance takes the form of a guarantee to depositors that they will be compensated after the most unlikely event of bank failure. Bank run is not a single model it evolves many other complications whether it is for its depositors, government or for the whole economy. To reduce the all over effect of financial problem, schemes like deposit insurance were in discussion by the regulatory authorities. Although deposit insurance present both positive and negative aspects for the economy. Introduction Banks are the most important financial institutions in every country as they act as an intermediary between lenders and borrower. General public use banks as safest place to keep their savings which can be used in the needed situation and also to earn some interest on their deposits. Banking institutions invest that money in other projects to gain profit, but some time when financial instruments fails in the economy then banks and depositors are backed by the schemes like deposit insurance. In the past decades, a series of banking...
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...only two members H and W. During the audit of accounts for the year ended 31st March 2000, you as a auditor find that : a) H, who is in charge of purchases has introduced fictitious purchase bills of Rs 50 lakhs. b) W, who is in charge of sales has sold goods worth Rs 1 crore without bringing the same in the books of accounts. You raise the matter with H and W in their capacity as directors. They contest that as this is a position known to them and within their own fold, you should not report the same under the Company's Act 1956. Discuss whether the above arguments are acceptable under the Company's Act 1956 for non-reporting? Q2) As an auditor, how would you react to the following situation? The company produced photocopies of fixed deposit receipts as the original receipts were kept in the iron safe of the director finance who was presently out of the country on company business? Q3) ABC Private Limited is engaged in the wholesale business of buying and selling silk sarees. The accounts are maintained under the Companies Act from 1st October to 30th September each year. The Chief Accountant of the company is requesting the tax auditor to conduct tax audit U/S 44 AB of the I. T. Act for the period for which accounts have been maintained under the Company's Act. As the tax auditor of ABC Private Limited, how will you react to the Chief Accountant request? Q4) Comment : The Auditor is responsible for failure to disclose the affairs of the company kept out of books and concealed...
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...this http://pnaph.org/chapter_phils.asp for the list of Chapter with President and contact details III. Bank to Bank Transactions(directly to National PNA Account) 1. Membership Fee of P400.00 may be deposited to any of the following banks: a. Banco De Oro – Paco Branch, Savings Account No. 1650057081 b. Eastwest Bank – Paco Branch, Savings Account No. 010001000956 Account Name: Philippine Nurses Association, Inc. 2. Fax or email deposit slip together with the Membership Form and photocopy of your PRC license card at (632) 525-1596 or philippinenursesassociation@yahoo.com.ph respectively. 3. Once payment has been verified, a notification will be sent through your indicated contact details. 4. Claiming of Membership ID Cards, may be done by: a. Securing it personally at the PNA National Office b. Sending a representative to PNA Office, bringing an authorization letter plus his/her ID cards and a photocopy of your valid ID. c. Having it sent through Postal Mail. The additional mailing fee of 100php should be included in the deposit to be made....
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...change in Deposit Interest Rates on Total Deposits of Branch Introduction-. The main function of a bank is to accept deposits & do advances . Attracting more & more deposits eventually increase the customer base of the branch & once the customer starts associating himself with the branch, he would like to cater to all its financial requirements through the same branch. Whether it may be its car , housing . business or education needs. In order to work on this particular aspect State Bank Of Bikaner & Jaipur (SBBJ ) , Ranchi Branch wanted to increase its total deposits with a special emphasis on the personal segment growth . The total deposits of the branch under different segments as on 31/03/2011 is shown in the table below : Segment Amount In Lacs C&I TOTAL DEP 2,213.54 SIB TOTAL DEP 280.39 AGR TOTAL DEP 1.12 PER TOTAL DEP 2,387.14 TOTAL 4,882.19 It is evident from the above table that the share of PER Total Deposit as a percentage of total deposit is 48% as compared to the C&I Deposit which is 45% .It had a good product mix, but being located at a main market place i.e. at Pee Pee Compound we had a good potential for growth . Problem Statement – To increase the Total Deposit of the branch by 15% in the next six months . Application to solve the problem - We have tried to increase the Total Deposits of the branch by Increase Fixed Deposit Rate of Interest – We increased the Rate of Interest on deposit in Sept. from...
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...frequently rent, our state is what might be referred to as “renter friendly.” The state of California affords a number of protections for tenants. If you are the owner of a rental property and frequently deal with residential and/or commercial leases, it is a very good idea to be well versed in the rights of renters so that you can protect your investment and yourself by being compliant with requirements. One of the most common disputes between a landlord and a tenant is the security deposit. While many renters are unaware of their legal rights regarding security deposits, it will not bode well for landlords/property owners to disregard these rights or attempt to find loopholes to get around compliance. Rights of Tenants in Regard to Security Deposits: 1. The Amount of the Security Deposit is Limited - Almost any residential lease agreement in California will...
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...Депозитный рынок Республики Казахстан является одним главных элементов финансового рынка государства, который за свою небольшую историю показал стремительный рост, резкое падение и стабилизацию. Несмотря на то, что нестабильность была вызвана мировым финансовым кризисом, который просто обострил внутренние проблемы в развитии финансового рынка, необходима разработка мер по минимизации негативных последствий дестабилизации финансового сектора государства. Одним из направлений совершенствования управления депозитным рынком может стать реализация со стороны государства и субъектов банковской системы активной депозитной политики, которая должна быть направлена на построение отношений нового типа, которые будут способны обеспечить устойчивость депозитного рынка. На развитие депозитного рынка оказывает воздействие множество факторов как финансового, так и не финансового характера. Как показывает статистика, в целом за время кризиса объем депозитов казахстанцев в банках не снизился. Это не характерный случай на рынке депозитов. То есть возникает необходимость исследования причин сохранения объема депозитов в казахстанских банках в условиях финансового кризиса. Изучение требуют факторы, которые оказали положительное влияние на стабильность казахстанского депозитного рынка. На наш взгляд, у казахстанского депозитного рынка есть потенциал дальнейшего количественного и качественного развития. Большинство казахстанцев продолжают хранить сбережения в наличной форме, предпочитают инвестиции...
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...Definition of Deposit A deposit is constituted from the moment a person received a thing belonging to another, with the obligation of safely keeping it and of returning the same. Parties to a contract of deposit 1. Depositor (Depositante) – the party who delivers a thing to another for safekeeping. 2. Depositary (Depositorio) – the party who receives a thing from another with the obligation of safely keeping it and of returning the same. Characteristics of contract of deposit 1. Real contract – perfected by the delivery of the subject matter. 2. Unilateral (if deposit is gratuitous) – only the depositary has an obligation; or 3. Bilateral (if deposit is onerous) – gives rise to obligation on the part of both parties. Purpose of the contract The principal purpose of the contract of deposit is the safekeeping of the thing delivered. If it is only secondary, it is not a contract of deposit but some other contract like lease or commodatum. Deposit distinguished from mutuum or simple loan | Deposit | Mutuum | Principal purpose | Safekeeping of subject matter | Consumption of the subject matter | Right to demand the return of the subject matter | At will | The lender must wait until the expiration of the period granted to the debtor | Object | Movable/immovable property | Money or other consumable things | Deposit distinguished from commodatum | Deposit | Commodatum | Principal purpose | Safekeeping of subject matter | Transfer of the use...
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...financial markets. Explain the features of call deposits, term deposits and CDs to the customer and provide advice on risk-reward trade-offs that might be associated with each product. Answer Call deposits or demand deposits are funds held in a savings account that can be withdrawn on demand. Features of call deposits are: • They are held in accounts other than a cheque account where the funds are available on demand. These types of accounts are generally referred to as savings account. • They may take the form of the traditional passbook account, whereby the depositor holds a physical passbook that provides a record of all transactions and funds held. • Call deposit account holders usually receive interest payments, but the return on funds invested is low. Term deposit: A deposit held at a financial institution that has a fixed term. These are generally short-term with maturities ranging anywhere from a month to a few years. When a term deposit is purchased, the lender (the customer) understands that the money can only be withdrawn after the term has ended or by giving a predetermined number of days notice. The features of term deposits are: • The main purpose of fixed deposit account is to enable the individuals to earn a higher rate of interest on their surplus funds (extra money). • The amount can be deposited only once. For further such deposits, separate accounts need to be opened. • The period of fixed deposits range between 15 days to 10 years. •...
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...Deposit Products Islami Bank Bangladesh Limited mobilizes deposits through different types of accounts. Al-Wadeah Accounts Mudaraba AccountsAl-Wadeah Accounts Islami Bank Bangladesh Limited operates Al-wadeah Current Account on the principles of Al-wadeah. The Bank commits to refund money deposited in these Accounts on the demand of customers. On the other hand the Bank takes permission from customers that the Bank may utilize their money. Customers may operate these Accounts as their desires. No profit is disbursed in these Accounts and depositors do not bear any loss Mudaraba Accounts In the perspective of these Accounts the Bank is 'Mudarib' and customers are 'Shahib Al-Mal'. On behalf of depositors, the Bank invests their deposited money and distributes minimum 65% of investment-income earned through deployment of Mudaraba funds among Mudaraba depositors after the closing of the year. * Al-Wadeah Current Account (AWCA) * Mudaraba Savings Account (MSA) * Mudaraba Term Deposit Account (MTDR) * Mudaraba Special Notice Account (MSNA) * Mudaraba Hajj Savings Account (MHSA) * Mudaraba Special Savings (Pension) Account (MSSA) * Mudaraba Savings Bond (MSB) * Mudaraba Monthly Profit Deposit Account (MMPDA) * Mudaraba Muhor Savings Account (MMSA) * Mudaraba Waqf Cash Deposit Account (MWCDA) * Mudaraba NRB Savings Bond (MNSB) Account * Mudaraba Foreign Currency Deposit Account (MFCD) * Students Mudaraba Savings Account (SMSA) * Mudaraba Farmers Savings...
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