13 September 2022

Bank Account

Mariam Ter-Sahakyan
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WHAT IS BANK
ACCOUNT

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 WHAT IS BANK ACCOUNT

A bank account is a financial account maintained by a

financial institution for a customer. A bank account
represents the funds that a customer has entrusted to the
financial institution and from which the customer can make
withdrawals.

According to the Armenian legislation Bank Accounts can

be offered only in Commercial Banks.

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 Why you need bank account

1. You pay automated (utilities, rent, tuition,….)

2. Getting payments automatically (salary, transfers …)
3. A planning tool – money in one place  easy to look after
4. Build up you banking history  easier access to credit, mortgage

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 Bank Account and Payment card
Bank account  bases for many types of financial instruments!
Deposits, payments cards, transfers, loans, etc.

Payment card
It’s optional, you can use
your Laptop without a mouse
too, but with it it’s more
convenient

Bank Account
The base of all your banking
operations

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 Bank Account vs. Cash
VS.
+ Certain guarantees to protect your
money
+ Complete control over money
+ Transferring funds to or from other
accounts
+ Online and mobile access
+ Interest income
+ Easy tool for monitoring/controlling
personal cash flows and budget
- Monthly/Annual/Extra (“excess
activity”, other banks ATMs) fees
- Absence of ATMs in any place you
want, limited access to your money
+ Ready access to your funds in case
of immediate needs
+ Independency from ATMs, POS
terminals
- Unlimited accessibility of funds
interrupts you to resist the
temptation of spending extra cash
- Inflation devalue your money
- Risk of robberies
- Physical damages
- Impossibility to use your money
abroad without conversion
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WHAT IS BANK
ACCOUNT

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 Types of Bank Account

Purpose  Day-to-day financial needs

Saving
Saving with extra earning

Term  Demand
On maturity (short, medium, long – term)
Liquidity  Unlimited access
Limited access before maturity
Interest  Zero to high
Fees  More services more fees, minimum balance
Added  Cash in/out, checks, automated payments,
services Attached to Cards, investments, …

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 Types of Bank Account - USA
Basic Account  No frills, for basic day-to-day financial needs
(checking/current) Pay in/out, free, no interest
Checks available
Savings account  Designed to help to save, discipline
Low % Added services
Short-term Added interest
Added fees
Money Market Deposit  Highest %, Min balance Less liquid
Account (MMDAs) Banks take money and invest in Longer term
short term debt (Tbills ..)
Limited checks
Certificate of Deposit  Long term, for X years, 3-6 years ususally
(CDs) Highest %,
No access until maturity
Individual Retirement  Savings for retirement
Accounts (IRAs) The highest % in the long time, the least access to your
money in short term
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Bank Account in
Armenia

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 Opening a Bank Account In Armenia

> 14 years old

“Mono Currency”
“Multi Currency”
Dram, US Dollar, Euro, Ruble,
Suisse Franc, Pound sterling,
Canadian Dollar, Japan Yen,
Australian Dollar, • Passport and Public
UAE Dirham ․․․ (in any case service number
the interests are paid in AMD)• Or ID card
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 Some offers in Armenian Market
Types of bank account
Basic/current, demand
Term/savings

Personal account - Administered only by the account holder (or with license)
Joint account - The transactions may be made on the agreement of the all or
one (two) of co-signer
Account in the name of a third person - Available for the service of time
deposit accounts originated in the name of a third person
Special purpose account - For example, an account in the name of a minor
under age 14

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 Price of bank account
In general free
May be  minimum balance
Annual Percentage Yield (APY)  interest, which a person
will receive against a 1,000 dram deposit in 365 day, based
on application of annual simple percentage rate,
percentage compounding and payment frequency.

 Banks must disclose APY before contract

Compare prices at www.abcfinance.am/finhelper
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 Regulation
Money on bank account is your ownership!!!
You can always withdraw you money regardless of the type,
difference is penalties (Civil Code of Armenia, Chapter 50)

Regulated by:
• Contract btw Bank and You  READ IT BEFORE SIGNING!!!
• Civil Code of Armenia, Chapter 50
• Law on Attracting Deposits
• Law on Guarantee of remuneration of banking deposits of physical
persons
• …

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 It is GUARANTEED
•Bank accounts guaranty according to the Law on
"Guarantee of remuneration of banking deposits of
physical persons“
AMD 10 000 000
other Currency  AMD 5 000 000

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 Your Rights

• Data Protection - Strong regulation about bank account information

security  never exposed to third parties
• Bank is obliged to provide with information:
• Before contract  oral and written, information bulletin
• During contract  monthly statement
• After contract  written, about closure
Complaints if any misbehave by bank
• to bank, Financial System Mediator, CBA, court
• Banks MUST disclose all information
• Official web site
• Place of operation
• Other

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Financial TIPS

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 How to monitor your bank account

•Statement from your bank

• Via email
• Hard copy by post
• Hard copy visiting bank
• Online access (mobile/internet banking)
• Via phone (telebanking)
• Banks are obliged to provide statements at least on a monthly
basis via your chosen channel for free.

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While choosing compare:
Fees
Profitability (APY)
Liquidity (demand/term)
Service
Suitability to you needs!
Read Contracts Carefully Before Signing!
Take your copy!

After choosing a Bank Account:

Keep your contract, statements organized and safe
Compare your bills with your statements
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Summing up

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 SUMMARIZING

Bank Account vs. Cash

Bank Account vs. Payment card
Bank Account Types: Checking account, Savings account,
Deposit Accounts, Retirement Accounts
How to open a Bank Account in Armenia
Bank Account Security

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PRACTICING

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 In groups:

TASK 1
• Choose 1 bank
• Find what bank accounts are provided, compare with basic types
• MAKE COMPARATIVE: pros and cons of bank account FOR YOU
PERSONALLY.

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