DEPOSITS AND

NEGOTIABLE
INSTRUMENTS
 Saving Accounts
Saving Account is offered to the public to encourage their small
savings. Those who open it includes, students ,salaried persons,
and small traders. These small savings by individuals constitute a
huge amount at the bank .The account is subject to Zakat in.
Pakistan it can be opened with the minimum as 100 rupees
 But practice in Pakistan banks demand at least one
thousand rupees to open it. The account holder can with
draw cash only twice a week .The upper limit of the amount
is Rs 15000.Forthe amount above this limit the bank
requires an advance notice of one week.
 Current Account
oCurrent account is operated by business men .Earlier it could be
opened with minimum of Rs500 but now a minimum of two thousand
is needed, even some banks require five thousand rupees to open it .it
can be operated any number of times a day .un like saving accounts
,there is no upper limit of the withdrawal, no interest paid .This
account serves the business men as if his cashier is sitting at the bank
and dealing in his cheques. This account is not subject to zakat.
 Fixed Account
oThisaccount is opened for a definite period of time without the expiry
of which the amount cannot be withdrawn .

oThe rate of interest is higher than that of savings account. The greater
the period for which money is deposited the higher the interest rate is
offered . The period ranges from three months to ten years .Account
is subject to zakat deductions.
 Home Saving Account: This type of account offers the facility to the
account holder to save money right at home put it in locker, Provided, by
the bank. The key of the locker remains with the bank. Which sends its
officer ever y week t o collect the amount from the locker. Now this type
is no longer in practice.

 Negotiable Instruments :Purpose to promote trade and commerce

 Negotiable does not mean to negotiate instead it means transferable and

instrument means a written document .That means negotiable instrument is
written documents that is transferable

 Negotiable Instruments Includes ,Promissory notes ,bills of exchange and

cheques and it does not include treasury bills and currency notes
 Promissory Note

 A promissory note is financial instrument that

contains a written promise by one party the note
issuer or maker to pay another party the note’s
payee a definite sum of money ,either on
demand or as specified future date.
 Features of Promissory Notes: In Counting and Signed by
the maker.
 Promise/ undertaking to pay ,Promise to pay must be un
conditional. Money and a certain sum of money. Certainty of
parties (payee and Maker). Payable to bearer and order.
A bill of exchange is an unconditional order in writing ,addressed by one person to
another, signed by the person giving it, requiring the person to whom it is addressed
to pay on demand or at a fixed or determinable future time, a sum in certain in
money to or to the order of a specified person or to the bearer.

Bill of Exchange Features

Bill of Exchange must be in writing. It must be an order. Not a request

The order must be unconditional. Certain amount.
The bill must be payable to a certain person or his order.
bill of exchange
cheque
 Cheque are bill of exchange drawn on a banker payable on demand .they are
instruments used to with draw money deposited in the bank.

Parties involved in cheque

1. Drawer
2. Drawee
3. payee

Cheque Features
Cheque must be in form of an order, not a request. The order must be unconditional.
The cheque must be in writing Certain amount it must be drawn on a banker
 Types of cheques
Bearer Cheque, when the words or bearer ’’appearing on the face of the
cheque are not cancelled ,the cheque is called bearer cheque .The bearer
cheque is payable to the person specified there in or to any other else
who presents it to the bank for payment. However ,such cheques are
risky ,this is because, if such cheques are lost the founder of the can
collect payment from the bank.
Order cheque when the cheques bears the name of the receiver of cash .
it is called order cheque in such case the word bearer is cancelled. It is
payable to the person named there in or his order .order cheques can be
endorsed or transferred to third person by the order of the original payee.
 Un crossed/Open cheque: when a cheque is not crossed, it is
known as an open cheque or an un crossed cheque. The payment
of such a cheque can be obtained at the counter of the bank.
 Crossed Cheque; crossing of the cheque means drawing two
parallel lines on the face of the cheque with or without additional
words like &CO or Account payee or not negotiable .A crossed
cheque can not be cashed at the cash counter of the bank but it
can only be credited to the payees account.