Deposit facilities and banking services provide various options for customers to deposit and manage their money. Common deposit accounts include savings accounts, current accounts, fixed deposits, and recurring deposits. These accounts have different eligibility criteria, interest rates, and withdrawal restrictions. In addition to accepting deposits, banks offer numerous services like loans, credit/debit cards, money transfers, online/mobile banking, and wealth management for high-net-worth individuals. Regulations aim to ensure banks' stability while allowing them to perform important financial intermediation functions in the economy.

1. Deposit Facilities and
Banking Services
By HUMSI SINGH

2. Introduction: Deposit, Depositor and Deposit Facility
A deposit is the act of placing cash (or cash equivalents) with some entity, most
commonly with a financial institution such as a bank.
A person who is making a deposit with the bank is known as a depositor. The
Depositor is the lender of the money which will be returned to him/her at the end
of the deposit period.
Deposit facility refers to any kind facility related to depositing of cash, withdrawal
of cash or managing transactions with the help of banking services of a particular
account.

3. Various Accounts and Deposit Facilities for Depositors
On the basis of purpose they serve, bank deposits accounts may be classified as
follows:
1. Savings bank account
2. Current deposit account
3. Fixed deposit account
4. Recurring deposit account

4. Saving Deposit Account
As the name suggests this type of account is suitable for the people who have a
definite income and are looking to save money. This type of account can be
opened with a minimum initial deposit that varies from bank to bank.
Money can be deposited at anytime in this account. Withdrawals can be made
either by signing a withdrawal form or by issuing a cheque or by using ATM card.
Interest is allowed on the balance of deposit in the account.

5. Current Deposit Account
Big businessmen, companies and institutions such as schools, colleges, and
hospitals have to make payment through their bank accounts. Since there are
restrictions on the number of withdrawals from savings bank account, that type is
not suitable. Banks open a current account for them. Like savings, this also
requires minimum initial deposit. Here, bank does not pay any interest. Rather the
account holder pays a certain amount each year as an operational charge. These
have overdraft facility.

6. Fixed Deposit Account
Some bank customers my like to put away money for a longer time. Such deposits
offer a higher interest rate. If money is deposited in savings bank account, banks
allow a lower rate of interest. Therefore, money is deposited in a fixed deposit
account to earn an interest at a higher rate.

7. Recurring Deposit
While opening the account a person has to agree to a deposit a fixed
amount once in a month for a certain period. The total deposit along
with the interest therein is payable on maturity. However, the
depositor can also be allowed to close the account before its
maturity and get back the money along with the interest till that
period. The account can be opened by a person individually, or jointly
with another, or by the guardian in the name of a minor.

8. Banking Services
A bank is a financial institution that accepts deposits from the public and
creates credit.
Any activities involved in accepting and safeguarding money owned by other
individuals and entities, and then lending out this money in order to earn a
profit are known as banking services.

9. Various Banking Services
● Advancing of Loans.
● Overdraft.
● Discounting of Bills of
Exchange.
● Check/Cheque Payment
● Collection and Payment Of
Credit Instruments
● Foreign Currency Exchange.
● Consultancy.
● Bank Guarantee.
● Remittance of Funds.
● Credit cards.
● ATMs Services.
● Debit cards.
● Home banking.
● Online banking.
● Mobile Banking.
● Priority banking.
● Private banking.

10. Various Banking Services in Detail...
1. Advancing loans: After keeping certain cash reserves, banks provide short-
term, medium-term and long-term loans to needy borrowers.
2. Overdraft: Sometimes, the bank provides overdraft facilities to its customers
through which they are allowed to withdraw more than their deposits.
Interest is charged from the customers on the overdrawn amount.
3. Discounting of Bills of Exchange: Through this method, a holder of a bill of
exchange can get it discounted by the bank, in a bill of exchange, the debtor
accepts the bill drawn upon him by the creditor (i.e., holder of the bill) and
agrees to pay the amount mentioned on maturity.

11. Banking Services (continued)...
4. Cheque payment: Banks provide cheque pads to the account holders. Account
holders can draw cheque upon the bank to pay money.
5. Collection and payment of credit instruments: In modern business, different
types of credit instruments such as the bill of exchange, promissory notes,
cheques etc. are used. Banks deal with such instruments. Modern banks collect
and pay different types of credit instruments as the representative of the
customers.
6. Foreign currency exchange: Banks deal with foreign currencies. As the
requirement of customers, banks exchange foreign currencies with local
currencies, which is essential to settle down the dues in the international trade.

12. Banking services (continued)...
7. Consultancy: In this function, banks hire financial, legal and market experts who
provide advice to customers regarding investment, industry, trade, income, tax etc.
8. Bank Guarantee: When customers have to deposit certain fund in governmental
offices or courts for a specific purpose, a bank can present itself as the guarantee for
the customer, instead of depositing fund by customers.
9. Remittance of Funds: Banks help their customers in transferring funds from one
place to another through cheques, drafts, etc.
10. Credit Cards: A credit card is cards that allow their holders to make purchases of
goods and services in exchange for the credit card’s provider immediately paying for
the goods or service, and the cardholder promising to pay back the amount of the
purchase to the card provider over a period of time, and with interest.

13. Banking Services(continued)...
11. ATM Services: ATMs replace human bank tellers in performing banking functions such
as deposits, withdrawals, account inquiries.
12. Debit Cards: Debit cards are used to electronically withdraw funds directly from the
cardholders’ accounts. Most debit cards require a Personal Identification Number (PIN) to be
used to verify the transaction.
13. Home Banking: Home banking is the process of completing the financial transaction
from one’s own home as opposed to utilizing a branch of a bank. It includes actions such as
making account inquiries, transferring money, paying bills, applying for loans, directing
deposits.
14. Online Banking: Online banking is a service offered by banks that allows account
holders to access their account data via the internet. Online banking is also known as
“Internet banking” or “Web banking.”

14. Banking Services(continued)...
15. Mobile Banking: Mobile banking (also known as M-Banking) is a term used for
performing balance checks, account transactions, payments, credit applications and
other banking transactions through a mobile device such as a mobile phone or
Personal Digital Assistant (PDA).
16. Priority Banking: Priority banking can include a number of various services, but
some of the popular ones include free checking, online bill pay, financial consultation,
and information.
17. Private Banking: Personalized financial and banking services that are traditionally
offered to a bank’s digital, high net worth individuals (HNWIs). For wealth
management purposes,HNWIs have accrued far more wealth than the average person,
and therefore have the means to access a larger variety of conventional and alternative
investments.

15. Conclusion
Lending activities can be performed either directly or indirectly through capital
markets. Due to their importance in the financial stability of a country, banks are
highly regulated in most countries. Most nations have institutionalized a system
known as fractional reserve banking under which banks hold liquid assets equal
to only a portion of their current liabilities.