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Ayesha Afzal
AsslsLanL rofessor
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aymenLs for urchases of Coods and
Servlces
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nonlnLeresL-8earlng uemand ueposlLs
lnLeresL-8earlng uemand ueposlLs
negouable Crders of WlLhdrawal (nCW)
Money MarkeL ueposlL AccounL (MMuA)
Super nCW AccounL
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An AccounL Whose rlmary urpose ls Lo
Lncourage Lhe 8ank CusLomer Lo Save
8aLher Lhan Make aymenLs
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assbook Savlngs AccounL
SLaLemenL Savlngs ueposlL
1lme ueposlL (Cu)
lndlvldual 8euremenL AccounL (l8A)
keogh ueposlL
8oLh l8A
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a Plgher lnLeresL 8aLe lf MarkeL 8aLes 8lse
SLep-up Cu - ermlLs erlodlc upward
Ad[usLmenLs ln Lhe romlsed lnLeresL 8aLe
Llquld Cu - ermlLs Lhe ueposlLor Lo
WlLhdraw Some or All of 1helr lunds WlLhouL
a WlLhdrawal enalLy
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1he MaLurlLy of Lhe ueposlL
1he Slze of Lhe Cerlng lnsuLuuon
1he 8lsk of Lhe Cerlng lnsuLuuon
Markeung hllosophy and Coals of Lhe
Cerlng lnsuLuuon
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Sensluve Lo MovemenLs ln MarkeL
lnLeresL 8aLes and Whlch 1end Lo
8emaln wlLh Lhe 8ank
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8anks lnsured 1hrough 8ank lnsurance lund (8ll)
Savlngs and Loans lnsured 1hrough Savlngs
Assoclauon lnsurance lund (SAll)
Covers Cnly 1hose ueposlLs ayable ln Lhe u.S.
Many 1ypes of AccounLs are Covered up 1o
$100,000 for Lach AccounL Polder wlLhln Lhe Same
8ank (Lven lf ulerenL 8ranches)
ueposlLs laced ln SeparaLe lnsuLuuons are lnsured
SeparaLely
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Consumers MusL be lnformed of Lhe ueposlL 1erms
8efore 1hey a new AccounL
ueposlLory lnsuLuuons MusL ulsclose:
Mlnlmum 8alance Lo Cpen
Mlnlmum Lo Avold lees
Pow Lhe 8alance ls llgured
When lnLeresL 8eglns Lo Accrue
enalues for Larly WlLhdrawal
Cpuons aL MaLurlLy
And Lhe A?
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Unit Price
Charged the
Customer
for Each
Service
=
Operating
Expense
Per Unit of
Deposit
Service
+
Estimating
Overhead
Expense
Allocated to
the Deposit
Function
+
Planned
Profit from
Each
Service Unit
Sold
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aL Lhe asL. lL Looks aL WhaL lunds Lhe 8ank
Pas 8alsed Lo uaLe and WhaL Lhose lunds
Pave CosL
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Looklng aL Lhe luLure. WhaL mlnlmum
8aLe of 8eLurn ls Lhe 8ank Colng Lo Pave
Lo Larn on Any luLure Loans and
Securlues Lo Cover Lhe CosL of all new
lunds 8alsed?
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1haL Lhe Added CosL (noL WelghLed
Average CosL) of 8rlnglng new lunds lnLo
Lhe 8ank Should 8e used Lo rlce
ueposlLs.
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1he MeLhod of Selllng ueposlLs 1haL
usually SeLs Low rlces and lees lnlually
Lo Lncourage CusLomers Lo Cpen an
AccounL and 1hen 8alses rlces and lees
LaLer Cn.
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Schedule of lees were Low lf CusLomer SLayed
Above Some Mlnlmum 8alance - lees Condluonal
Cn Pow Lhe AccounL Was used
Condluonal rlclng 8ased Cn Cne or More Cf Lhe
lollowlng lacLors
1he number of 1ransacuons asslng 1hrough Lhe AccounL
1he Average 8alance Peld ln Lhe AccounL uurlng Lhe
erlod
1he MaLurlLy of Lhe ueposlL
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8ank Aggresslvely Coes Aer Plgh-
8alance, Low-AcuvlLy AccounLs. 8ank
uses Carefully ueslgned Adveruslng Lo
1argeL LsLabllshed 8uslness Cwners and
Managers and CLher Plgh lncome
Pouseholds.
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1he 8ank rlces ueposlLs Accordlng Lo
Lhe number of Servlces urchased or
used. 1he CusLomer May 8e CranLed
Lower lees or Pave Some lees Walved lf
1wo or More Servlces are used.
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Some eople leel 1haL All lndlvlduals Are
LnuLled Lo a Mlnlmum Level of llnanclal
Servlces no Mauer 1helr lncome Level

roblems: 1, 4, 6, 8
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Banks hire dull people and train them to be even
more dull. If they look conservative, it's only
because their loans go bust on rare, very rare
occasions. But (...)bankers are not conservative at
all. They are just phenomenally skilled at self-
deception by burying the possibility of a large,
devastating loss under the rug.
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** Taleb has been credited with making predictions regarding financial crises and making a fortune (over USD
12 Bln) out of the 2008 crisis - Taleb is a visiting professor at Wharton and University of Paris Dauphine
Nassim Nicholas Taleb
The Black Swan