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Deposit Account: A deposit account is a type of bank facility. as per the rules of the institution. . offered by a banking/financial institution that allows money (cash or transfer) be deposited and withdrawn by the account holder on request.
Major types of Bank account: • Current Accounts: A deposit account for business entity. allows more number of transaction & remittance. . • Savings accounts: Type of account basically used to promote savings habit of the individual • Time deposit: Money deposited with bank for a pre-decided time period.
deposit accounts . which includes: • Savings Bank • Current Account • Recurring Deposits • Term Deposit ( Intt Payback/Interest Accrual) • Term Deposit (Coupled With Overdraft) • Current Account in Foreign Currency • Fixed Deposits in Foreign Currency • Other misc.Banks have derived several deposit products from above three types.
In case of Non-fund based accounts. In addition to the principal. A company or individual's bank credit depends on both the borrower's capacity to repay and the overall amount of credit available in the banking system. .Bank Loan: A loan is a type of debt. fees are charged. It is money or facility given by a financial institution to its customer which. In a loan. called the principal sum and repays an equal amount of money to the lender at a later time. not money but facility is allowed & instead of interest. interest/fee is also paid. increases purchasing power of the customer. A debt is created when a creditor agrees to lend a sum of assets to a debtor. the borrower initially receives or borrows an amount of money.
Types of loans • Trade Credit ( Business Credit) • Consumer Credit Trade credit • Fund Based • Non Fund Based .
Fund Based • Cash Credit • Demand loans • Term Loans (Long term/ short term) • Bridge Loans • Trust receipt • Over draft • Export Packing Credit .
Non Fund Based • Letter of Credit • Bank Guarantee • Deferred Payment Guarantees .
Consumer credit • Home Loans • Car Loans • Education Loans • Consumer goods loans • Credit card debt • Personal loans • Travel or leisure loans .
Loan Payment Mechanism • Simple interest method: Where borrower pays interest only on principle amount. . Thus this method of repayment makes actual interest higher as compared to other method & this is the method used by banks for giving loans. • Compounded interest method: In compounded interest method interest on interest is also paid along with interest on principle.
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