Brief study of Bank Accounts

1. Bank Accounts
Presented By:
Rahul Agrawal

3. Financial records of an organization that
register all financial transactions, and must be
kept at its principal office or place of business.
#Definition

4. #Documents required for set up
a bank account:-
$ Identity proof to open Saving Bank Accounts
*Passport
*PAN card
*Voter ID card
*Driving licence
*Government ID card
*Senior citizen ID card

5. $ Address proof to open Saving Bank Accounts
*Passport
*Telephone bill
*Electricity bill
*Bank Statement with Cheque
*Certificate/ ID card issued by Post office

6. #KYC Process
In a Bank the KYC or Know Your Customer is most important
activity necessitated by the Law and regulations of the central
bank.If the account is being opened for an existing customer,
it is important to check if the KYC is done. If it is not done or if
the account is being opened for a new customer, then we
need to collect and complete the KYC formalities.

7. The KYC process requires the bank to collect-
1.A Photo ID Proof issued by Government Authorities or
Registration Certificates in case of businesses
2. Address Proof
3. Date of Birth or Date of Establishment in case of businesses
proof
4. PAN Card or Form 15A/B
5. Latest Photographs
6. KYC application or a letter signed by the Customer

8. #Saving Account
A savings account is an interest-bearing deposit account
held at a bank or another financial institution that provides
a modest interest rate.
#Features:-
1.They carry interests
2.These are not available for business entities
3.ATM facility
4.Automatic keeping fees
5.Automatic salary deposits

9. #Pros:-
1.Deposited funds accrue interest over time.
2.Money is safe in these accounts in comparision to others
3.Funds can be easily available.
#Cons:-
1.The account permits all operations in the account with some
restrictions such as the number of times of withdrawal, amounts of
deposits into the account for some type of customers etc..
2.Saving accounts generally pay a lower rate of interest in comparision
to other deposit accounts.
3.Some banks charge fees on their savings accounts.

10. #Current Account:-
Current Account is the most operable
account which are usually for business
transactions or daily transactions
without any restrictions.
#Features
1.Current bank accounts are operated to run a business.
2.It is a non-interest bearing bank account.
3.Penalty is charged if minimum balance is not maintained in
the current account.
4.There is no restriction on the number and amount of deposits.

11. #Advantages:-
1.No number of transactions limited.
2.It helps businessmen to make a direct payment to their
creditors by issuing cheques, demand-drafts or pay-orders, etc.
3.It enables short term borrowing facility.
4.It also provides various other benefits such as:
(i) Deposit and withdrawal of money (cash) at any location.
(ii) Multi-location funds transfer
(iii) Electronic funds transfer(NEFT,RTGS,ECS)

12. #Disadvantages:-
1.The rate of interest on balance is very low.
2.Print and paperwork can be lengthy and complex.
3.Services of package accounts have additional cost.

13. #Fixed Deposit Account
1. A fixed maturity date for closure of the account
2. A fixed rate of interest - generally higher rates related to
the period of deposit
3. No input other than at the opening or withdrawal other
than at closure or pre-closure permitted with penalties
4. Interest paid out to customer on regular basis either on
monthly or quarterly or other chosen periodical rests
5. A certificate or bond issued which is held by customer as a
value asset
6. Loans made available on the deposit.
7. No restrictions for holding the account - any customer can
hold this account

14. #Pros:
1. Safe Investment
2.Loan & Credit Card
3. Flexible Interest Rate Payouts
#Cons:
1. Risk factor
2.Income tax
3.Your money is locked up with the bank, it is not easy to
withdraw at a moment's notice

15. #Re-investment Deposit Account
1. A fixed maturity date for closure of the account
2. A fixed rate of interest - generally higher rates related to the
period of deposit
3. No input other than at the opening or withdrawal other than
at closure or pre-closure permitted with penalties
**4. Interest added back to the account and interest thus gets
compounded and paid out to customer upon maturity or pre-closure
5. A certificate or bond issued which is held by customer as a
value asset
6. Loans made available on the deposit.
7. No restrictions for holding the account - any customer can
hold this account

16. #Pros:
1. Safe Investment
2.Loan & Credit Card
3. Flexible Interest Rate Payouts
#Cons:-
1.You cannot withdraw the money anytime you wish.
2.You cannot change the amount you like to invest monthly once
decided.
3.It has a comparatively lower rate of interest.

17. * Difference between Fixed and Re investment
Deposit Accounts:
In Fixed deposit accounts interest on funds paid out to the
customer on monthly or quarterly.
While
In Re investment deposit accounts interest on funds added
back to the account and paid out to customer on maturity or
pre closure of account.

18. $ Some other accounts:
#Salary accounts:
*Corporates having large number of employees would want
to facilitate their employees to receive salary without any
problem automatically into their accounts with banks.
*The Salary accounts of a Corporate may be spread across
various locations, various branches of a Bank or various Banks.
*Salary accounts are used by Corporates to Pay the Salaries,
credit the reimbursements and expenses, pay bonuses ,
settlements etc., to its employees.

19. #Methods:-
There are three methods of processing Salary accounts of a
Corporate-
1. Straight Through Processing ( STP )
2. File Transfer
3. Manual
#Advantages:
1.Zero balance account
2.Free accidental death cover
3.Customers also enjoy the special privileges provided by the banks.

20. #Escrow accounts:-
*An Escrow is a temporary holding facility offered by a trusted
3rd party while a transaction is going on between 2 parties –
the buyer and seller.
*An Escrow Account, hence, is a temporary account where the
buyer places the funds that he/she is using to purchase some
goods or services from the seller.
*The funds from this Escrow account are transferred to the seller
only after the transaction is completed and all conditions set
forth by the buyer and seller are completed.

21. Pros:-
1. Convenience
2. No Late Fees or Deliquencies
Cons:-
1. A Fixed Monthly Payment
2. Lack of control
1.

22. #Vendor accounts:-
*These are typically popular and useful in cases where the
Vendors enjoy a credit period by the corporate and the
corporate in turn enjoys a credit limit with the bank.
*In such cases the Corporate will use its limit with the bank to
facilitate the vendors to take advance or credit from the
bank and make payments to the bank as a settlement of
vendor payment.

23. THANK YOU