Good morning

☺☺☺☺

1
 Presentation
On
Bank
Deposit

Group members:
Jeevan Thapa
Bhuwan Prasad Wagle
Sujita Thapa
Kajal Udas
Anish Prasai
2
 Introduction of bank deposit

• It is the placement of funds in an account in

banks or financial institutions.
• It consists of money placed in to banking
institutions for safe keeping.
• Saving accounts, checking accounts and
money market accounts.
• It occupies a significant portion of bank’s total
source of funds.

3
 Types of bank deposit

1. Demand deposit
✔ Depositor can withdraw funds at any time
without any notice to bank
✔ No transaction limitations

4
2. Time deposit
✔ it is an interest bearing deposit held by bank
for a fixed period of time.
✔ Depositor can withdraw money only after
giving notice.
✔ Notice should be given 30 days before
withdrawal.
✔ Bank may charge fees for withdrawing money
before specified time.

5
 Features of bank deposit
• Quantitative(Based on monetary benefits)
• Customer need Based (Focuses on types of account
consumer wishes to open)
• Based on consumer Behavior (Influence by other consumer)
• Affected by economic Pressures(Based on boom or
inflation)
• Economic engine(Focuses on role)
• Agency services (collection of bills, payment of insurance
premium, purchase and sale of securities,etc)
• General services (L/C, issue of traveller’s cheque, credit
cards, locker facility)

6
 Types of Deposit

Current Saving Fixed Demand

Deposit Deposit Deposit Deposit

7
Current Account

8
 Current Account
• Current account is opened by businessmen
who have a higher number of regular
transactions with the bank.
• It includes deposits, withdrawals. It is also
known as Demand Deposit Account.
• It can be opened in co-operative bank
and commercial bank. Its amount can be
deposited and withdrawn at any time without
giving any notice.

9
• There is also no restriction on the number and
amount of withdrawals made, as long as the
current account holder has funds in his bank
account.
• It is a non-interest bearing bank account.
• It enables businessmen to carry out their
business transactions properly and promptly.

10
Some features of Current Account
• It is of a continuing nature as there is no fixed
period to hold a current account.
• It does not promote saving habits with its
account holders.
• The main objective of current bank account is
to enable the businessmen to conduct their
business transactions smoothly.
• There is no restriction on the number and
amount of deposits.

11
• Bank charges interest on overdraft on day to
day basis.
• Current holder must keep the minimum
balance of Rs.5000/1000 to keep the account
running.
• If this minimum is not maintained, charges
would be charged periodically
• Bank send ‘’Statement of account’’ every
month

12
• Two basic privileges of which customer can
enjoy are:
• Overdraft facility
• Other facilities like collection of cheques,
transfering of money and rendering agency
and general utility service.

13
• It is also suitable for making payments to
creditors by using cheques.
• It helps to fulfill the very needs of an
organization that requires frequent money
transfers in its day-to-day activity.
• It needs a higher minimum balance to be
maintained as compared to the savings
account.

14
15
 Meaning Of Saving Account
• Saving accounts are opened to encourage the
people to save money and collect their
savings.
• Very nominal interest rate is provided.
• Saving account can be open by salaried
person, children, senior citizens, etc.

16
 Features Of Saving Account
• Withdrawals are allowed subject to certain
restrictions.
• The money can be withdrawn either by cheque or
withdrawal slip of the respective bank.
• The rate of interest payable is very nominal on
saving accounts.
• Saving account is of continuing nature. There is no
maximum period of holding.
• A minimum amount has to be kept on saving
account to keep it functioning.

17
 Advantages Of Saving Account
• Saving account encourages savings habit
among salary earners and others who have
fixed income.
• It enables the depositor to earn income by
way of saving bank interest.
• Saving account helps the depositor to make
payment by way of issuing cheques.
• It shows income of a salaried and other
person earned during the year.

18
Types of saving account NIBL

19
Standard chartered Bank
Saving Deposit
NORMAL SAVING ACCOUNT
2.75% , minimum balance 300k
DIVA SAVINGS ACCOUNT
1.75, minimum balance 25000
"PAYROLL PLUS ACCOUNT**
(Under Savings Account)“
2.00 minimum balance 0
SHAREHOLDER ACCOUNT
1.75 minimum balance 5000
AMULYA BACHAT KHATA
2.35Minimum Balance = NPR 100,000
KIDDY BANK SAVINGS ACCOUNT
1.75 minimum balance 5,000
20
Types Of Saving Account Of Himalayan Bank
Normal Savings Account
Himal Savings Account
Premium Savings Account
Super Premium Savings Account
Himal Remit Savings Account
Bishesh Savings Account
Shareholder’s Savings Account
3 Years Recurring Savings Account
Fixed Deposit
HBL Nari Bachat
Structured Term Deposit Account

21
Interest rate of different bank’s saving account

22
23
Fixed Deposit

By: Bhuwan Prasad Wagle

24
• A fixed deposit (FD) is a financial instrument provided by
banks which provides investors with a higher rate of interest
than a regular savings account, until the given maturity date.
• The account which is opened for a particular fixed period
(time) by depositing particular amount (money) is known as
Fixed (Term) Deposit Account.
• The term 'fixed deposit' means that the deposit is fixed and is
repayable only after a specific period is over. It may or may
not require the creation of a separate account.
• It is known as a term deposit or time deposit in Canada,
Australia, New Zealand, and the US, and as a bond in the
United Kingdom and India. They are considered to be very
safe investments.
• The defining criterion for a fixed deposit is that the money
cannot be withdrawn from the FD as compared to a recurring
deposit or a demand deposit before maturity. Some banks
may offer additional services to FD holders such as loans
against FD certificates at competitive interest rates.
25
 Features of Fixed Deposit Account
• 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 up to 10 years.
• A high interest rate is paid on fixed deposits. The rate of interest
may vary as per amount, period and from bank to bank. Interest
income is paid monthly, quarterly or annually.
• Withdrawals are not allowed. However, in case of emergency,
banks allow to close the fixed account prior to maturity date. In
such cases, the bank deducts 1% (deduction percentage many vary)
from the interest payable as on that date.
• The depositor is given a fixed deposit receipt, which depositor has
to produce at the time of maturity. The deposit can be renewed for
a further period.
26
Advantages of Fixed Deposit Account
• Fixed deposit encourages savings habit for a longer
period of time.
• Fixed deposit account enables the depositor to earn a
high interest rate.
• The depositor can get loan facility from the bank.
• On maturity the amount can be used to make purchases
of assets.
• The bank can get the funds for a longer period of time.
• The bank can lend such funds for short term loans to
businessmen.
• Fixed deposits indirectly boost economic development
of the country.
• The bank can also invest such funds in profitable areas.
27
 Disadvantages of Fixed deposit account
• The returns received from the fixed deposit account are very
low as compared to inflation rate of the country. As day by
day the prices of the products are increasing in the market
that inflation rate is also increasing which do not support the
increase in the higher interest rates.
• The taxation of the fixed deposit accounts is done as normal
taxation and no other benefits are allowed, in controversy to
it, interest received in the savings bank account is exempt.
• The benefit of the diversifications not available as they have
invest all money in 1 account only, which is a major benefit
while investing in stock market or other instruments.
• If the depositor wants to withdraw the from FD account
he/she should pay some amount as fine.
28
 Factors you should know before
selecting a Bank FD
• Compare rate of interests (Fixed deposit rates)
• Type of interest (Fixed rate or floating rate)
• Frequency of compounding
• Mode of interest payout
• Withdrawal facility
• Sweep facility
• Know other attached benefits.

29
Interest rates of various commercial banks
in Nepal
Name of the Minimum 3 months 6 months 1 year 2 year and
bank balance above

Himalayan Rs.10,000 2.50% 4.50% 5.50% 5.75%

Bank
Standard - 1% 2% 3%&3.5 3.25% - 4%
Chartered %
Bank
Mega Bank - 5%&5.5% 5.5%&6. 6%&7.5 6%&7.5%
5% %
Nepal Bank - 2.75% 3.25% 4% 4.25%

Prabhu Bank - 4.5% 5% 6% 6.25% 30

Demand deposit

31
• A demand deposit consists of funds held in an account from
which deposited funds can be withdrawn at any time from the
depository institution, such as a checking or savings account,
accessible by a teller, ATM or online banking in contrast, a
term deposit is a type of account that cannot be accessed for a
predetermined period of time. Demand deposits provide the
money consumers need for paying daily expenses. If
depositors were required to notify their financial institutions
before withdrawing funds, the depositors would have
challenges making everyday purchases and paying bills.

32
 Example
• In July 2016, Bank First reported net income for the second
quarter of 2016 of $3.76 million, or $0.60 per share. The
numbers represented an 11% increase in quarterly earnings
over the same quarter the previous year. The increase was
partly due to growth in demand deposit balances, which are a
low-cost source of funding for the bank.

33
 History

• In the United States, demand deposits arose following the

1865 tax of 10% on the issuance of state bank notes;
see history of banking in USA.
• In the U.S., demand deposits only refer
to funds held in checking accounts (or cheque offering
accounts) other than NOW accounts; however, in a 1970s and
1980s response to the 1933 promulgation of Regulation Qin
the U.S., demand deposits in some cases came to allow easier
access to funds from other types of accounts (e.g. savings
accounts and money market accounts). For the historical basis
of the distinction between demand deposits and NOW
accounts in the U.S.

34
 Characteristics of Demand Deposit
Accounts
• NOW Accounts, MMAs and Demand Deposits:
Although negotiable order of withdrawal (NOW) accounts and
money market accounts (MMAs) let holders deposit and
withdraw funds on demand and typically pay market interest
rates, they are not DDA accounts. MMAs typically limit
withdrawals, or transactions including deposits, withdrawals and
transfers, to six per month. Fees may apply if the limit is
exceeded.

35
 • Cash Reserves and Demand Deposits:
The amount of cash reserves a financial institution is keeping
either in its vault or deposited with the Federal Reserve depends
on the amount of demand deposits the institution is holding. The
greater the amounts of demand deposits, the more cash the
institution reserves.

36
• Regulation Q and Demand Deposits: Federal Reserve
Regulation Q prohibits financial institutions from paying
interest on demand deposits. However, the institution may give
an account holder cash or credit payments or merchandise
when opening an account. The account holder may not receive
more than two payments annually, and the value of each
payment may not exceed $10 for deposits under $5,000 and
$20 for deposits exceeding $5,000.

37
 Other Characteristics
• Funds are payable on demand.
• Funds can be interest bearing.
• No eligibility requirements.
• No limit on the number of withdrawals or transfers.
• No maturity period.

38
39
40