Types of Deposits and Bank Accounts Essay

Banks receive money from the public by way of deposits. The following types of deposits are usually received by banks:

• Current deposit
• Saving deposit
• Fixed deposit
• Recurring deposit
• Miscellaneous deposits

Current Deposit

Also called ‘demand deposit’, current deposit can be withdrawn by the depositor at any time by cheques. Businessmen generally open current accounts with banks. Current accounts do not carry any interest as the amount deposited in these accounts is repayable on demand without any restriction. Banks usually charge a small amount known as incidental charges on current deposit accounts depending on the number of transaction.

HSBC’s current account takes the hassle out of managing your daily finances. You won’t need to rush around to pay your bills; simply arrange for direct debit payments or issue a cheque and mail it at your convenience. What’s more, you’ll have access to your account and a wide range of banking transactions, 24 hours a day, seven days a week – with our ATM Cards.

MCB make your everyday banking simple. It is also a perfect gateway to a world of products and services designed to meet your needs.MCB’s current account is like a swiss army knife: easily accessible, it comes with multiple features that are perfect for your daily banking needs like cheque books, overdraft facilities, credits cards, mobile banking and so on.

Savings deposit/Savings Bank Accounts

Savings deposit account is meant for individuals who wish to deposit small amounts out of their current income. A saving account can be opened with or without cheque book facility. There are restrictions on the withdrawls from this account. Savings account holders are also allowed to deposit cheques, drafts, dividend warrants, etc. drawn in their favour for collection by the bank. To open a savings account, it is necessary for the depositor to be introduced by a person having a current or savings account with the same bank.

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Barclays offer junior saving account. As a parent, you know it’s never too early for your child to learn to save. And it’s a better way to teach them with a fun, easy way – saving the junior way, enjoying high interest rates. Your child will be able to see his money grow faster, thanks to a higher interest rate than a normal savings account. Interest is calculated daily and credited half-yearly. Enjoy attractive interest rates as high as 1 month’s FD. Your Child is protected.

MCB offers Junior 12-17. Teenagers have different expectations. Junior account 12-17 caters for their fast evolving needs while enabling you to save for their future and benefiting from:

• Fresh and rewarding
• Start saving with a minimum deposit of only Rs 500
• Earn interest on your savings
• Let your child learn to manage money with a MCB Junior Card
• Register for MCB Refill and your child can reload mobile credits on the go (Emtel and Orange)

Fixed deposit

The term ‘Fixed deposit’ means deposit repayable after the expiry of a specified period. Since it is repayable only after a fixed period of time, which is to be determined at the time of opening of the account, it is also known as time deposit. Fixed deposits are most useful for a commercial bank. Since they are repayable only after a fixed period, the bank may invest these funds more profitably by lending at higher rates of interest and for relatively longer periods. The rate of interest on fixed deposits depends upon the period of deposits. The longer the period, the higher is the rate of interest offered.

Barclays Bank- A Fixed Deposit Account can be a great way to save as it helps to remove the temptation to dig into your savings, all the while earning a higher rate of interest over a fixed term. As a Premier Banking customer you earn a significantly higher interest on your Fixed Deposits, with accounts available in both local and foreign currencies. With your Fixed Deposit Account you get:

• A fixed rate of return over an agreed period of 3 to 12 months calculated flat on the principal,
• Choice of account currency (SCR, GBP, EUR and USD)
• Minimal cost on breakage of the deposit before maturity

You may apply for this account along with another applicant, where you may choose to have both parties be required to sign any instructions to debit the account or any of the parties sufficing for the transaction to be accepted. In addition, you may request for other parties to operate your Fixed Deposit Account on your behalf. We call such a nominated person an authorised signatory.

To open a Fixed Deposit Account, you are required to have a current or savings account with us. Upon applying for your Fixed Deposit Account, you can provide us with instructions on how to manage the principal and interest in the account upon maturity of the deposit or provide the instructions when you receive your Renewal Notice. You may ask us to roll over the deposit plus interest at current rates, to roll over the deposit only and credit the interest your current or savings account, or to credit the principal plus interest to your current or savings account.

While you are guaranteed a fixed interest on the principal, should you break your deposit prior to maturity, you will be charged a breakage fee and the pro-rated interest calculated based on the prevailing Instant Savings Account interest rate and the period over which the deposit was held.

SBM – Our term deposit gives you the option of placing your money for a fixed term, thereby earning a higher rate of interest.

Features:

• Minimum deposit of Rs 50,000
• Interest payable monthly, quarterly, half yearly or at maturity
• Interest paid to Current / Savings account (CASA) / by cheque
• Term Deposits offered for periods of 12, 24 and 36 month

What happens if I want to withdraw the money prior to the maturity date?

Floating Rate Deposit –

• Encashment of deposit prior to maturity is at the discretion of the bank.
• Interest may be forfeited if funds are withdrawn within 3 months of date of deposit.
• A penalty of either 1% or the cost incurred by the Bank for replacement of the Deposit (whichever is higher) may be charged at the Bank’s discretion.

Fixed Rate Deposit –

• Encashment of deposit prior to maturity is at the discretion of the bank.
• In addition to 1% penalty, customer opting for fixed rate of interest will have to bear the cost of replacement of funds in case of premature encashment.
• The penalty to be levied for encashment of a fixed rate deposit will be determined at the time of encashment. The penalty will depend on the market rate prevailing on the date of encashment.

Recurring Deposits

Under this type of deposit, the depositor is required to deposit a fixed amount of money every month for a specific period of time. Each instalment may vary from Rs.5/- to Rs.500/- or more per month and the period of account may vary from 12 months to 10 years. After the completion of the specified period, the customer gets back all his deposits along with the cumulative interest accrued on the deposits.

Miscellaneous Deposits

Banks have introduced several deposit schemes to attract deposits from different types of people, like Home Construction deposit scheme, Sickness Benefit deposit scheme, Children Gift plan, Old age pension scheme, Mini deposit scheme, etc.

ATM

An Automated Teller Machine (ATM) is a computerized machine that permits bank customers to gain access to their accounts with a magnetically encoded plastic card and a code number. It enables the customers to perform several banking operations without the help of a teller, such as to withdraw cash, make deposits, pay bills, obtain bank statements, effect cash transfers.

Advantages of ATM in Mauritius

• Get 24 hour access to your money
• Free of charge to any HSBC accountholder
• Saves time since no need to queue up at the Bank counter
• Withdraw or Deposit Cash
• Transfer Funds
• Balance Enquiries