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ONLINE BANKING SEACTOR
PROJECT NAME: ONLINE BANKING SEACTOR
STUDENT NAME : SACHIN GANPATI BAGAL
REGITRATION NO : WRO0722030
BY SACHIN BAGAL
Page 1
BY SACHIN BAGAL
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INDEX
1 .INTRODUCTION OF BANKING SEACTOR
2. OBJECTIVE
3. NATURE
4. BODY OF PROJECT
5. SCOPE
6. DIAGRAM
7. CONCULSION
8. REFERANCE
9. VISION OF BANKING SEACTOR
BY SACHIN BAGAL
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BANKING SEACTOR
INTRODUCTION:
From Wikipedia, the free encyclopedia
Jump to navigation Jump to search
BY SACHIN BAGAL
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This article is about financial organization that provides money upon conditions. For other uses,
see Bank (disambiguation).
"Banks" and "Banker" redirect here. For other uses, see Banks (disambiguation) and Banker
(disambiguation).
This article needs additional citations for verification. Please help improve this article by adding
citations to reliable sources. Insourced material may be challenged and removed.
Find sources: "Bank" – news · newspapers · books · scholar · JSTOR (May 2016) (Learn how and
when to remove this template message)
Part of a series on financial services
Banking
London.bankofengland.arp.jpg
The Bank of England, established in 1694
Types of banks
Accounts · Cards
Funds transfer
Terms
Related topics
Category Commons Portal
vet
Personal finance
Coin issued during the reign of the Roman emperor Maximum
Credit · Debt
Mortgage Car loan Charge card Credit card Unsecured personal loan Rent-to-own Student loan
Pawn Title loan Payday loan Refund anticipation loan Refinancing Debt consolidation Debt
rescheduling Bankruptcy
BY SACHIN BAGAL
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Employment contract
Salary Wage Salary packaging Employee stock ownership Employee benefits
Retirement
Pension
Defined benefit Defined contribution Social security
Personal budget and investment
Financial planner Financial adviser Financial independence Estate planning Target date fund
See also
Bank Cooperative Credit union
A bank is a financial institution that accepts deposits from the public and creates a demand
deposit while simultaneously making loans.[1] Lending activities can be directly performed by
the bank or indirectly through capital markets.
Because banks play an important role in financial stability and the economy of a country, most
jurisdictions exercise a high degree of regulation over banks. Most countries have institution
lised a system known as fractional reserve banking, under which banks hold liquid assets equal
to only a portion of their current liabilities. In addition to other regulations intended to ensure
liquidity, banks are generally subject to minimum capital requirements based on an
international set of capital standards, the Basel Accords.
Banking in its modern sense evolved in the fourteenth century in the prosperous cities of
Renaissance Italy but in many ways functioned as a continuation of ideas and concepts of credit
and lending that had their roots in the ancient world. In the history of banking, a number of
banking dynasties – notably, the Medicis, the Fuggers, the Welsers, the Berenbergs, and the
Rothschilds – have played a central role over many centuries. The oldest existing retail bank is
Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant ban
This article is about financial organisation that provides money upon conditions. For other uses,
BY SACHIN BAGAL
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(disambiguation).
citations to reliable sources. Unsourced material may be challenged and removed.
BANKING
Types of banks
Accounts · Cards
BY SACHIN BAGAL
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Funds transfer
Terms
Related topics
Personal finance
Coin issued during the reign of the Roman emperor maximum Credit · Debt
Mortgage Car loan Charge card Credit card Unsecured personal loan Rent-to-own Student loan
Pawn Title loan Payday loan Refund anticipation loan Refinancing Debt consolidation Debt
rescheduling Bankruptcy
Employment contract
Salary Wage Salary packaging Employee stock ownership Employee benefits
Retirement
BY SACHIN BAGAL
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Pension
Defined benefitDefined contributionSocial security
Financial plannerFinancial adviserFinancial independenceEstate planningTarget date .A bank is

a financial institution that accepts deposits from the public and creates a demand deposit while
simultaneously making loans.[1] Lending activities can be directly performed by the bank or
indirectly through capital markets.
jurisdictions exercise a high degree of regulation over banks. Most countries have
institutionalised a system known as fractional reserve banking, under which banks hold liquid
assets equal to only a portion of their current liabilities. In addition to other regulations
intended to ensure liquidity, banks are generally subject to minimum capital requirements
based on an international set of capital standards, the Basel Accords.
Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant bank is
Berenberg Bank (founded in 1590).
Jump to navigationJump to search
(disambiguation).

BY SACHIN BAGAL
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Banking
Types of banks
Accounts · Cards
Funds transfer
Terms
Related topics
Category Commons Porta Personal finance
Coin issued during the reign of the Roman emperor Maximian
CREDIT CARD
Mortgage Car loan Charge card Credit card Unsecured personal loan Rent-to-ownStudent
loanPawnTitle loanPayday loanRefund anticipation loanRefinancingDebt consolidationDebt
reschedulingBankruptcy
Employment contract
SalaryWageSalary packagingEmployee stock ownershipEmployee benefits

BY SACHIN BAGAL
Page 10
Retirement
Pension
Defined benefitDefined contributionSocial security
Financial plannerFinancial adviserFinancial independenceEstate planningTarget date fund
See also
BankCooperativeCredit union
vte
A bank is a financial institution that accepts deposits from the public and creates a demand
deposit while simultaneously making loans.[1] Lending activities can be directly performed by
the bank or indirectly through capital markets.
jurisdictions exercise a high degree of regulation over banks. Most countries have
institutionalised a system known as fractional reserve banking, under which banks hold liquid
assets equal to only a portion of their current liabilities. In addition to other regulations
intended to ensure liquidity, banks are generally subject to minimum capital requirements
based on an international set of capital standards, the Basel Accords.
Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant bank is
Berenberg Bank (founded in 1590).
BY SACHIN BAGAL
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(disambiguatio
This section needs expansion. You can help by adding to it. (August 2020)
Main article: History of banking
This 15th-century painting depicts money-dealers at a banca (bench) during the Cleansing of
the Temple.
Ancient ;
The concept of banking may have begun in the times of ancient Assyria and Babylonia with
merchants offering loans of grain as collateral within a barter system. Lenders in ancient Greece
and during the Roman Empire added two important innovations: they accepted deposits and
changed money.[citation needed] Archaeology from this period in Iran, ancient China and India
also shows evidence of money lending.
Medieval
The present era of banking can be traced to medieval and early Renaissance Italy, to the rich
cities in the centre and north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and
Peruzzi families dominated banking in 14th-century Florence, establishing branches in many
other parts of Europe.[2] Giovanni di Bicci de' Medici set up one of the most famous Italian
banks, the Medici Bank, in 1397.[3] The Republic of Genoa founded the earliest-known state
deposit bank, Banco di San Giorgio (Bank of St. George), in 1407 at Genoa, Italy.[4]
Early modern
Sealing of the Bank of England Charter (1694), by Lady Jane Lindsay, 1905.
Fractional reserve banking and the issue of banknotes emerged in the 17th and 18th centuries.
Merchants started to store their gold with the goldsmiths of London, who possessed private
vaults, and who charged a fee for that service. In exchange for each deposit of precious metal,
the goldsmiths issued receipts certifying the quantity and purity of the metal they held as a
bailee; these receipts could not be assigned, only the original depositor could collect the stored
goods.
Gradually the goldsmiths began to lend money out on behalf of the depositor, and promissory
notes (which evolved into banknotes) were issued for money deposited as a loan to the
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goldsmith. Thus by the 19th century we find "[i]n ordinary cases of deposits of money with
banking corporations, or bankers, the transaction amounts to a mere loan or mutuum, and the
bank is to restore, not the same money, but an equivalent sum, whenever it is demanded".[5]
and "[m]oney, when paid into a bank, ceases altogether to be the money of the principal (see
Parker v. Marchant, 1 Phillips 360); it is then the money of the banker, who is bound to return
an equivalent by paying a similar sum to that deposited with him when he is asked for it." [6]
The goldsmith paid interest on deposits. Since the promissory notes were payable on demand,
and the advances (loans) to the goldsmith's customers were repayable over a longer time-
period, this was an early form of fractional reserve banking. The promissory notes developed
into an assignable instrument which could circulate as a safe and convenient form of money[7]
backed by the goldsmith's promise to pay,[8][need quotation to verify] allowing goldsmiths to
advance loans with little risk of default.[9][need quotation to verify] Thus the goldsmiths of
London became the forerunners of banking by creating new money based on credit.
Interior of the Helsinki Branch of the Vyborg-Bank [fi] in the 1910s
The Bank of England originated the permanent issue of banknotes in 1695.[10] The Royal Bank
of Scotland established the first overdraft facility in 1728.[11] By the beginning of the 19th
century Lubbock's Bank had established a bankers' clearing house in London to allow multiple
banks to clear transactions. The Rothschilds pioneered international finance on a large scale,
[12][13] financing the purchase of shares in the Suez canal for the British government in 1875.
[14][need quotation to verify]
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Etymology
The word bank was taken into Middle English from Middle French banque, from Old Italian
banca, meaning "table", from Old High German banc, bank "bench, counter". Benches were
used as makeshift desks or exchange counters during the Renaissance by Florentine bankers,
who used to make their transactions atop desks covered by green tablecloths.[15][16]
Definition
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The definition of a bank varies from country to country. See the relevant country pages for
more information.Under English common law, a banker is defined as a person who carries on
the business of banking by conducting current accounts for their customers, paying cheques
drawn on them and also collecting cheques for their customers.[17
Branch of Nepal Bank in Pokhara, Western Nepal.
In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in
relation to negotiable instruments, including cheques, and this Act contains a statutory
definition of the term banker: banker includes a body of persons, whether incorporated or not,
who carry on the business of banking' (Section 2, Interpretation). Although this definition seems
circular, it is actually functional, because it ensures that the legal basis for bank transactions
such as cheques does not depend on how the bank is structured or regulated.
The business of banking is in many common law countries not defined by statute but by
common law, the definition above. In other English common law jurisdictions there are
statutory definitions of the business of banking or banking business. When looking at these
definitions it is important to keep in mind that they are defining the business of banking for the
purposes of the legislation, and not necessarily in general. In particular, most of the definitions
are from legislation that has the purpose of regulating and supervising banks rather than
regulating the actual business of banking. However, in many cases, the statutory definition
closely mirrors the common law one. Examples of statutory definitions:
"banking business" means the business of receiving money on current or deposit account,
paying and collecting cheques drawn by or paid in by customers, the making of advances to
customers, and includes such other business as the Authority may prescribe for the purposes of
this Act; (Banking Act (Singapore), Section 2, Interpretation).
"banking business" means the business of either or both of the following:
receiving from the general public money on current, deposit, savings or other similar account
repayable on demand or within less than [3 months] ... or with a period of call or notice of less
than that period;
paying or collecting cheques drawn by or paid in by customers.[18]
Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct
debit and internet banking, the cheque has lost its primacy in most banking systems as a
payment instrument. This has led legal theorists to suggest that the cheque based definition
should be broadened to include financial institutions that conduct current accounts for
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customers and enable customers to pay and be paid by third parties, even if they do not pay
and collect cheques .[19]
Standard business :
Large door to an old bank vault.
Banks act as payment agents by conducting checking or current accounts for customers, paying
cheques drawn by customers in the bank, and collecting cheques deposited to customers'
current accounts. Banks also enable customer payments via other payment methods such as
BY SACHIN BAGAL
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Automated Clearing House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and
automated teller machines (ATMs).
Banks borrow money by accepting funds deposited on current accounts, by accepting term
deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by
making advances to customers on current accounts, by making installment loans, and by
investing in marketable debt securities and other forms of money lending.
Banks provide different payment services, and a bank account is considered indispensable by
most businesses and individuals. Non-banks that provide payment services such as remittance
companies are normally not considered as an adequate substitute for a bank account.
Banks can create new money when they make a loan. New loans throughout the banking
system generate new deposits elsewhere in the system. The money supply is usually increased
by the act of lending, and reduced when loans are repaid faster than new ones are generated.
In the United Kingdom between 1997 and 2007, there was an increase in the money supply,
largely caused by much more bank lending, which served to push up property prices and
increase private debt. The amount of money in the economy as measured by M4 in the UK
went from £750 billion to £1700 billion between 1997 and 2007, much of the increase caused
by bank lending.[20] If all the banks increase their lending together, then they can expect new
deposits to return to them and the amount of money in the economy will increase. Excessive or
risky lending can cause borrowers to default, the banks then become more cautious, so there is
less lending and therefore less money so that the economy can go for
This section needs expansion. You can help by adding to it. (August 2020)
Main article: History of banking
the Temple.
also shows evidence of money lending
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goods.
Gradually the goldsmiths began to lend money out on behalf of the depositor, and promissory
notes (which evolved into banknotes) were issued for money deposited as a loan to the
goldsmith. Thus by the 19th century we find "[i]n ordinary cases of deposits of money with
Etymology
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Definition :
more information.
Under English common law, a banker is defined as a person who carries on the business of
banking by conducting current accounts for their customers, paying cheques drawn on them
and also collecting cheques for their customers.[17]
Banco de Venezuela in Coro.
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this Act; (Banking Act (Singapore), Section 2, Interpretation).
"banking business" means the business of either or both of the following:
than that period;
and collect cheques .[19]
Standard business
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less lending and therefore less money so that the economy can go
the Temple.
Ancient
also shows evidence of money lending.
Medieval
Early modern
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goods.Gradually the goldsmiths began to lend money out on behalf of the depositor, and
promissory notes (which evolved into banknotes) were issued for money deposited as a loan to
the goldsmith. Thus by the 19th century we find "[i]n ordinary cases of deposits of money with
Etymology
more information.
Under English common law, a banker is defined as a person who carries on the business of
banking by conducting current accounts for their customers, paying cheques drawn on them
and also collecting cheques for their customers.[17]
BY SACHIN BAGAL
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this Act; (Banking Act (Singapore), Section 2, Interpretation)."banking business" means the
business of either or both of the following:
than that period;
and collect cheques .[19
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less lending and therefore less money so that the economy can go from
BY SACHIN BAGAL
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Savings account
Find sources: "Savings account" – news · newspapers · books · scholar · JSTOR (October 2013)
(Learn how and when to remove this template message)Part of a series on financial services
Banking
The passbook was the traditional record of savings account transactions before the use of the
internet.
Types of banks
Accounts · Cards
Accounts
BY SACHIN BAGAL
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Christmas club Deposit Money-market Savings Time deposit (Bond)
Transaction (checking / current)
Cards
ATM :
Funds transfer
Terms
Related topics
A savings account is a bank account at a retail bank. Common features include a limited number
of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options, and
the inability to be overdrawn. Traditionally, transactions on savings accounts were widely
recorded in a passbook, and were sometimes called passbook savings accounts, and bank
BY SACHIN BAGAL
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statements were not provided; however, currently such transactions are commonly recorded
electronically and accessible online.
People deposit funds in savings account for a variety of reasons, including a safe place to hold
their cash. Savings accounts normally pay interest as well: almost all of them accrue compound
interest over time. Several countries require savings accounts to be protected by deposit
insurance and some countries provide a government guarantee for at least a portion of the
account balance.
There are many types of savings accounts, often serving particular purposes. These can include
accounts for young savers, accounts for retirees, Christmas club accounts, investment accounts,
and money market accounts. Some savings accounts also have other special requirements, such
as a minimum initial deposit, deposits made regularly, and notices of withdrawal.
Contents
1 Regulations
1.1 United States
1.1.1 High yield savings accounts
2 References
3 External links
An advertisement for an early 20th century Toledo bank for a 4% interest rate on savings
accounts
In the United States, Sec. 204.2(d)(1) of Regulation D (FRB) previously limited withdrawals from
savings accounts to six transfers or withdrawals per month, a limitation which was removed in
April 2020, though some banks continue to impose a limit voluntarily as of 2021.[1] There is no
limit to the number of deposits into the account. Violations of the regulation may result in a
service charge or may result in the account being changed to a checking account.
Regulation D sets smaller reserve requirements for savings account balances. In addition,
customers can plan withdrawals to avoid fees and earn interest, which contributes to more
BY SACHIN BAGAL
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stable savings account balances on which banks can lend. A savings account linked to a checking
account at the same financial institution can help avoid fees due to overdrafts and reduce
banking costs.[2]
High yield savings accounts, sometimes abbreviated to HYSA, are a type of savings account with
higher interest than normal savings accounts. These accounts typically earn 10 times more in
interest than a normal savings account. HYSAs can be a good option for short-term investing.[3]
[4][5]
References
Carrns, Ann (30 April 2021). "Banks Were Allowed to Give People More Access to Savings in the
Pandemic". New York Times. Retrieved 13 August 2021.
Amy Fontinelle. "Banking: Savings Accounts 101".
Knueven, Liz. "The only difference between regular and high-yield savings that matters is the
one that earns you 10 times more on your money". Business Insider. Retrieved 30 December
2020.
Gravier, Elizabeth (22 June 2020). "What a high-yield savings account is and how it can grow
your money". CNBC. Retrieved 30 December 2020.
Karl, Sabrina. "What Is a High-Yield Savings Account?". Investopedia. Retrieved 30 December

2020.
External links
icon Banks portal
Savings Account Definition | Investopedia
Savings Accounts Regulation D | MoneyRates.com
What Is a Savings Account? | The Balance
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formula to calculate the interest is given as under:{\displaystyle I={\frac {P*n(n+1)r}

{12*2*100}}}{\displaystyle I={\frac {P*n(n+1)r}{12*2*100}}} {\displaystyle ={\frac {P*n(n+1)r}
{2400}}}{\displaystyle ={\frac {P*n(n+1)r}{2400}}} where I is the interest, n is time in months and
r is rate of interest per annum and P is the monthly deposit.[3]
The formula to calculate the maturity amount is as follows: Total sum deposited+Interest on it
{\displaystyle ={P(n)}+I}{\displaystyle ={P(n)}+I} {\displaystyle =P*n[1+{\frac {(n+1)r}{2400}}]}{\
displaystyle =P*n[1+{\frac {(n+1)r}{2400}}]}.
Banks in India use the following formula for recurring deposit (RD) maturity value: (Maturity
value of RD; based on quarterly compounding):
{\displaystyle M={\frac {R[(1+i)^{n}-1]}{1-(1+i)^{(-1/3)}}}}{\displaystyle M={\frac {R[(1+i)^{n}-1]}

{1-(1+i)^{(-1/3)}}}}
Where:
{\displaystyle M}M = maturity value of the RD
{\displaystyle R}R = monthly RD installment to be paid
{\displaystyle n}n = number of quarters (tenure)
{\displaystyle i}i = annual rate of interest / 400
Taxation
Tax deducted at source (TDS) is applicable on recurring deposits. If interest earned on recurring
deposits exceeds Rs. 40,000 a year, TDS at the rate of 10% would be deducted by the bank.
Income tax is to be paid on interest earned from a Recurring Deposit at the rate of tax slab of
the Recurring Deposit holder. Investors with no taxable income will have to submit form 15G to
avoid TDS on both recurring deposits and fixed deposits. However, for investors who are senior
citizens (above the age of 60) you will have to file form 15H to avoid TDS on both RD and FD. [4]
BY SACHIN BAGAL
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References
"From Post Office RD, Bank RD to Debt MF SIP, find out your option for risk-free recurring
deposits". 13 June 2019. Retrieved 23 June 2019.
Vijayaragavan Iyengar (2009). Introduction to Banking. Excel Books India. pp. 313–. ISBN 978-
81-7446-569-6.
M.L. Aggarwal. APC Understanding ICSE Mathematics - Class 10 - Avichal Publishing Company.
Avichal Publishing Company. pp. 58–. ISBN 978-81-7739-302-6.
Sharma, Ashwini Kumar (2020-04-20). "Avoid unnecessary TDS, furnish form 15G and 15H".
mint. Retrieved 2020-10-20.
Globe icon
The examples and perspective in this article deal primarily with India and do not represent a
worldwide view of the subject. You may improve this article, discuss the issue on the talk page,
or create a new article, as appropriate. (October 2015) (Learn how and when to remove this
template message)
A fixed deposit (FD) is a financial instrument provided by banks or NBFCs which provides
investors a higher rate of interest than a regular savings account, until the given maturity date.
It may or may not require the creation of a separate account. It is known as a term deposit or
time deposit in Canada, Australia, New Zealand, fixed deposit in India and the United States,
and as a bond in the United Kingdom and for a fixed deposit is that the money cannot be
withdrawn from the FD as compared to a recurring deposit or a demand deposit before
maturity. Some banks may offer additional services to FD holders such as loans against FD
certificates at competitive interest rates. It's important to note that banks may offer lesser
interest rates under uncertain economic conditions. The interest rate varies between 4 and
7.50 percent.[1] The tenure of an FD can vary from 7, 15 or 45 days to 1.5 years and can be as
high as 10 years.[2] These investments are safer than Post Office Schemes as they are covered
BY SACHIN BAGAL
Page 30
by the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, DICGC
guarantees amount up to ₹ 500000(about $6850) per depositor per bank.[3] They also offer
income tax and wealth tax benefits.
Contents
1 Functioning
2 Benefits
3 Taxability
4 How bank FD rates of interest vary with Central Bank policy
5 See also
6 References
Functioning
Fixed deposits are high-interest-yielding term deposits and are offered by banks.The most
popular form of term deposits are fixed deposits, while other forms of term deposits are
recurring deposit and Flexi Fixed deposits (the latter is actually a combination of demand
deposit and fixed deposit)[citation needed].
To compensate for the low liquidity, FDs offer higher rates of interest than saving accounts.
[citation needed] The longest permissible term for FDs is 10 years. Generally, the longer the
term of deposit, the higher is the rate of interest but a bank may offer a lower rate of interest
for a longer period if it expects interest rates, at which the Central Bank of a nation lends to
banks ("repo rates"), will dip in the future.[4]
Usually the interest on FDs is paid every three months from the date of the deposit (e.g. if FD
a/c was opened on 15 Feb, the first interest installment would be paid on 15 May). The interest
is credited to the customers' Savings bank account or sent to them by cheque. This is a Simple
FD.[5] The customer may choose to have the interest reinvested in the FD account. In this case,
the deposit is called the Cumulative FD or compound interest FD. For such deposits, the interest
is paid with the invested amount on maturity of the deposit at the end of the term.[6]
Although banks can refuse to repay FDs before the expiry of the deposit, they generally don't.
This is known as a premature withdrawal. In such cases, interest is paid at the rate applicable at
the time of withdrawal. For example, a deposit is made for 5 years at 8% but is withdrawn after
2 years. If the rate applicable on the date of deposit for 2 years is 5 percent, the interest will be
paid at 5 percent. Banks can charge a penalty for premature withdrawal.[5]
BY SACHIN BAGAL
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Banks issue a separate receipt for every FD because each deposit is treated as a distinct
contract. This receipt is known as the Fixed Deposit Receipt (FDR), which has to be surrendered
to the bank at the time of renewal or encashment.[7]
Many banks offer the facility of automatic renewal of FDs where the customers do give new
instructions for the matured deposit. On the date of maturity, such deposits are renewed for a
similar term as that of the original deposit at the rate prevailing on the date of renewal.
Income tax regulations require that FD maturity proceeds exceeding Rs 20,000 not to be paid in
cash. Repayment of such and larger deposits has to be either by "A/c payee" crossed cheque in
the name of the customer or by credit to the saving bank a/c or current a/c of the customer.
Nowadays, banks give the facility of Flexi or sweep in FD, where in customers can withdraw
their money through ATM, through cheque or through funds transfer from their FD account. In
such cases, whatever interest is accrued on the amount they have withdrawn will be credited to
their savings account (the account that has been linked to their FD) and the balance amount
will automatically be converted in their new FD. This system helps them in getting their funds
from their FD account at the times of emergency in a timely manner.
Benefits
Customers can avail loans against FDs up to 80 to 90 percent of the value of deposits. The rate
of interest on the loan could be 1 to 2 percent over the rate offered on the deposit.[8]
Residents of India can open these accounts for a minimum of seven days. Investing in a fixed
deposit earns customers a higher interest rate than depositing money in a saving account.
Tax saving fixed deposits are a type of fixed deposits that allow the investor to save tax under
Section 80C of the Income Tax Act. [9]
Taxability
In India, tax is deducted by the banks on FDs if interest paid to a customer at any bank exceeds
₹ 10,000 in a financial year. This is applicable to both interest payable or reinvested per
customer. This is called Tax deducted at Source and is presently fixed at 10% of the interest.
With CBS banks can tally FD holding of a customer across various branches and TDS is applied if
interest exceeds ₹ 10,000. Banks issue Form 16 A every quarter to the customer, as a receipt for
Tax Deducted at Source.[10]
BY SACHIN BAGAL
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However, tax on interest from fixed deposits is not 10%; it is applicable at the rate of tax slab of
the deposit holder. If any tax on Fixed Deposit interest is due after TDS, the holder is expected
to declare it in Income Tax returns and pay it by himself.
If the total income for a year does not fall within the overall taxable limits, customers can
submit a Form 15 G (below 60 years of age) or Form 15 H (above 60 years of age) to the bank
when starting the FD and at the start of every financial year to avoid TDS.
How bank FD rates of interest vary with Central Bank policy
In certain macroeconomic conditions (particularly during periods of high inflation) a Central

Bank adopts a tight monetary policy, that is, it hikes the interest rates at which it lends to banks
("repo rates"). Under such conditions, banks also hike both their lending (i.e. loan) as well as
deposit (FD) rates. Under such conditions of high FD rates, FDs become an attractive investment
avenue as they offer good returns and are almost completely secure with no risk[citation
needed]. These can be checked with the excess rates in the country.
Certificate of deposit
Deposit (finance)
Recurring deposit
Savings account
Time deposit
References
Sumant Khanderao Muranjan (1952). Modern banking in India. Kamala Pub. House. p. 80.
Mohan Lal Tannan (1965). Banking law and practice inIndia. Thacker. p. 23.
"DICGC – A guide to FD". Archived from the original on 22 August 2013. Retrieved 6 January
2014. 3. What is the maximum deposit amount insured by the DICGC? Each depositor in a bank
is insured up to a maximum of 100,000 (Rupees One Lakh) for both principal and interest
amount held by him in the same right and same capacity as on the date of
liquidation/cancellation of bank's licence or the date on which the scheme of
amalgamation/merger/reconstruction comes into force.
R. P. Maheshwari (1997). A Complete Course in ISC Commerce. Pitambar Publishing. p. 102.

ISBN 978-81-209-0643-3.
BY SACHIN BAGAL
Page 33
Money market account
This article is about the type of bank deposit account. For the type of mutual fund, see Money
market fund.
Banking
Types of banks
Accounts · Cards
Accounts
Christmas clubDepositMoney-marketSavingsTime deposit (Bond)
Cards
ATMC redit Debit
Funds transfer
Terms
Related topics
A money market account (MMA) or money market deposit account (MMDA) is a deposit
account that pays interest based on current interest rates in the money markets.[1] The
interest rates paid are generally higher than those of savings accounts and transaction
accounts; however, some banks will require higher minimum balances in money market
accounts to avoid monthly fees and to earn interest.
Money market accounts should not be confused with money market funds, which are mutual
funds that invest in money market securities.Contents
BY SACHIN BAGAL
Page 34
1 United States
1.1 Features
1.2 History
2 References
United States
Features
Money market accounts are regulated under terms similar to ordinary savings accounts. They
are insured by the FDIC (unlike money market funds), and although they may provide checking
services, the restrictions of Federal Reserve Regulation D have discouraged their use for day-to-
day payment purposes. In practice, money market accounts are distinguished from ordinary
savings accounts by their higher balance requirements and their more complex interest rate
structure.
History
The Depository Institutions Deregulation and Monetary Control Act of 1980 set in motion a
series of steps, designed to phase in the deregulation of bank deposits, permitting a wider
variety of account types, and eventually eliminating interest ceilings on deposits. By the
subsequent Garn–St. Germain Depository Institutions Act of 1982, on December 14, 1982,
money market accounts were authorized with a minimum balance of no less than $2,500, no
interest ceiling, and no minimum maturity, allowing up to six transfers out of the account per
BY SACHIN BAGAL
Page 35
month (no more than three by check) and unlimited withdrawals by mail, messenger, or in
person.[2] Minimum denominations were eliminated on January 1, 1986, and the limitation
that no more than three of the maximum six monthly outward transfers could be by check was
eliminated on May 3, 198
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Banking
Types of banks
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Banking charters
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Deposit accounts
Payment and transfer
flag United States portal
A certificate of deposit (CD) is a time deposit, a financial product commonly sold by banks, thrift
institutions, and credit unions in the United States. CDs differ from savings accounts in that the
CD has a specific, fixed term (often one, three, or six months, or one to five years) and usually, a
fixed interest rate. The bank expects the CD to be held until maturity, at which time they can be
withdrawn and interest paid.
Like savings accounts, CDs are insured "money in the bank" (in the US up to $250,000) and thus,
up to the local insured deposit limit, virtually risk free. In the US, CDs are insured by the Federal
Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union
Administration (NCUA) for credit unions.
In exchange for the customer depositing the money for an agreed term, institutions usually
offer higher interest rates than they do on accounts that customers can withdraw from on
demand—though this may not be the case in an inverted yield curve situation. Fixed rates are
BY SACHIN BAGAL
Page 36
common, but some institutions offer CDs with various forms of variable rates. For example, in
mid-2004, interest rates were expected to rise—and many banks and credit unions began to
offer CDs with a "bump-up" feature. These allow for a single readjustment of the interest rate,
at a time of the consumer's choosing, during the term of the CD. Sometimes, financial
institutions introduce CDs indexed to the stock market, bond market, or other indices.
Some features of CDs are:
A larger principal should/may receive a higher interest rate.
A longer term usually earns a higher interest rate, except in the case of an inverted yield curve
(e.g., preceding a recession).
Smaller institutions tend to offer higher interest rates than larger ones.
Personal CD accounts generally receive higher interest rates than business CD accounts.
Banks and credit unions that are not insured by the FDIC or NCUA generally offer higher interest
rates.
CDs typically require a minimum deposit, and may offer higher rates for larger deposits. The
best rates are generally offered on "Jumbo CDs" with minimum deposits of $100,000. Jumbo
CDs are commonly bought by large institutional investors, such as banks and pension funds,
that are interested in low-risk and stable investment options. Jumbo CDs are also known as
negotiable certificates of deposits and come in bearer form. These work like conventional
certificate of deposits that lock in the principal amount for a set timeframe and are payable
upon maturity.[1]
The consumer who opens a CD may receive a paper certificate, but it is now common for a CD
to consist simply of a book entry and an item shown in the consumer's periodic bank
statements. That is, there is often no "certificate" as such. Consumers who want a hard copy
that verifies their CD purchase may request a paper statement from the bank, or print out their
own from the financial institution's online banking service.
Contents
1 Closing a CD
2 CD refinance
3 Ladders
4 Step-up callable CD
BY SACHIN BAGAL
Page 37
5 Deposit insurance
6 Terms and conditions
7 Criticism
8 References
9 External links
Closing a CD
Withdrawals before maturity are usually subject to a substantial penalty. For a five-year CD, this
is often the loss of up to twelve months' interest. These penalties ensure that it is generally not
in a holder's best interest to withdraw the money before maturity—unless the holder has
another investment with significantly higher return or has a serious need for the money.
Commonly, institutions mail a notice to the CD holder shortly before the CD matures requesting
directions. The notice usually offers the choice of withdrawing the principal and accumulated
interest or "rolling it over" (depositing it into a new CD). Generally, a "window" is allowed after
maturity where the CD holder can cash in the CD without penalty. In the absence of such
directions, it is common for the institution to roll over the CD automatically, once again tying up
the money for a period of time (though the CD holder may be able to specify at the time the CD
is opened not to roll over the CD).
CD refinance
The Truth in Savings Regulation DD requires that insured CDs state, at time of account opening,
the penalty for early withdrawal. It is generally accepted that these penalties cannot be revised
by the depository prior to maturity.[citation needed] However, there have been cases in which
a credit union modified its early withdrawal penalty and made it retroactive on existing
accounts.[2] The second occurrence happened when Main Street Bank of Texas closed a group
of CDs early without full payment of interest. The bank claimed the disclosures allowed them to
do so.[3]
The penalty for early withdrawal deters depositors from taking advantage of subsequent better
investment opportunities during the term of the CD. In rising interest rate environments, the
penalty may be insufficient to discourage depositors from redeeming their deposit and
reinvesting the proceeds after paying the applicable early withdrawal penalty. Added interest
from the new higher yielding CD may more than offset the cost of the early withdrawal penalty.
Ladders
BY SACHIN BAGAL
Page 38
While longer investment terms yield higher interest rates, longer terms also may result in a loss
of opportunity to lock in higher interest rates in a rising-rate economy. A common mitigation
strategy for this opportunity cost is the "CD ladder" strategy. In the ladder strategies, the
investor distributes the deposits over a period of several years with the goal of having all one's
money deposited at the longest term (and therefore the higher rate) but in a way that part of it
matures annually. In this way, the depositor reaps the benefits of the longest-term rates while
retaining the option to re-invest or withdraw the money in shorter-term intervals.
For example, an investor beginning a three-year ladder strategy starts by depositing equal
amounts of money each into a 3-year CD, 2-year CD, and 1-year CD. From that point on, a CD
reaches maturity every year, at which time the investor can re-invest at a 3-year term. After
two years of this cycle, the investor has all money deposited at a three-year rate, yet have one-
third of the deposits mature every year (which the investor can then reinvest, augment, or
withdraw).
The responsibility for maintaining the ladder falls on the depositor, not the financial institution.
Because the ladder does not depend on the financial institution, depositors are free to
distribute a ladder strategy across more than one bank. This can be advantageous, as smaller
banks may not offer the longer terms of some larger banks. Although laddering is most
common with CDs, investors may use this strategy on any time deposit account with similar
terms.
Step-up callable CD
Step-Up Callable CDs are a form of CD where the interest rate increases multiple times prior to
maturity of the CD. These CDs are often issued with maturities up to 15 years, with a step-up in
interest happening at year 5 and year 10.[4]
Typically, the beginning interest rate is higher than what is available on shorter-maturity CDs,
and the rate increases with each step-up period.
These CDs have a “call” feature which allows the issuer to return the deposit to the investor
after a specified period of time, which is usually at least a year. When the CD is called, the
investor is given back their deposit and they will no longer receive any future interest
payments.[5]
Because of the call feature, interest rate risk is borne by the investor, rather than the issuer.
This transfer of risk allows Step-Up Callable CDs to offer a higher interest rate than currently
available from non-callable CDs. If prevailing interest rates decline, the issuer will call the CD
and re-issue debt at a lower interest rate. If the CD is called before maturity, the investor is
BY SACHIN BAGAL
Page 39
faced with reinvestment risk. If prevailing interest rates increase, the issuer will allow the CD to
go to maturity.[6]
Deposit insurance
The amount of insurance coverage varies, depending on how accounts for an individual or
family are structured at the institution. The level of insurance is governed by complex FDIC and
NCUA rules, available in FDIC and NCUA booklets or online. The standard insurance coverage is
currently $250,000 per owner or depositor for single accounts or $250,000 per co-owner for
joint accounts.
Some institutions use a private insurance company instead of, or in addition to, the federally
backed FDIC or NCUA deposit insurance. Institutions often stop using private supplemental
insurance when they find that few customers have a high enough balance level to justify the
additional cost. The Certificate of Deposit Account Registry Service program lets investors keep
up to $50 million invested in CDs managed through one bank with full FDIC insurance.[7]
However rates will likely not be the highest available.
Terms and conditions
There are many variations in the terms and conditions for CDs
The federally required "Truth in Savings" booklet, or other disclosure document that gives the
terms of the CD, must be made available before the purchase. Employees of the institution are
generally not familiar with this information[citation needed]; only the written document carries
legal weight. If the original issuing institution has merged with another institution, or if the CD is
closed early by the purchaser, or there is some other issue, the purchaser will need to refer to
the terms and conditions document to ensure that the withdrawal is processed following the
original terms of the contract.
BY SACHIN BAGAL
Page 40
The terms and conditions may be changeable. They may contain language such as "We can add
to, delete or make any other changes ("Changes") we want to these Terms at any time."[8]
The CD may be callable. The terms may state that the bank or credit union can close the CD
before the term ends.
Payment of interest. Interest may be paid out as it is accrued or it may accumulate in the CD.
Interest calculation. The CD may start earning interest from the date of deposit or from the
start of the next month or quarter.
Right to delay withdrawals. Institutions generally have the right to delay withdrawals for a
specified period to stop a bank run.
Withdrawal of principal. May be at the discretion of the financial institution. Withdrawal of

principal below a certain minimum—or any withdrawal of principal at all—may require closure
of the entire CD. A US Individual Retirement Account CD may allow withdrawal of IRA Required
Minimum Distributions without a withdrawal penalty.
Withdrawal of interest. May be limited to the most recent interest payment or allow for
withdrawal of accumulated total interest since the CD was opened. Interest may be calculated
to date of withdrawal or through the end of the last month or last quarter.
Penalty for early withdrawal. May be measured in months of interest, may be calculated to be
equal to the institution's current cost of replacing the money, or may use another formula. May
or may not reduce the principal—for example, if principal is withdrawn three months after
opening a CD with a six-month penalty.
Fees. A fee may be specified for withdrawal or closure or for providing a certified check.
Automatic renewal. The institution may or may not commit to sending a notice before
automatic rollover at CD maturity. The institution may specify a grace period before
automatically rolling over the CD to a new CD at maturity. Some banks have been known to
renew at rates lower than that of the original CD.[9]
Criticism
There may be some correlation between CD interest rates and inflation. For example, in one
situation interest rates might be 15% and inflation 15%, and in another situation interest rates
might be 2% and inflation may be 2%. Of course, these factors cancel out, so the real interest
rate, which indicates the maintenance or otherwise of value, is the same in these two
examples.
BY SACHIN BAGAL
Page 41
However the real rates of return offered by CDs, as with other fixed interest instruments, can
vary a lot. For example, during a credit crunch banks are in dire need of funds, and CD interest
rate increases may not track inflation.[10]
The above does not include taxes.[11] When taxes are considered, the higher-rate situation
above is worse, with a lower (more negative) real return, although the before-tax real rates of
return are identical. The after-inflation, after-tax return is what is important.
Author Ric Edelman writes: "You don't make any money in bank accounts (in real economic
terms), simply because you're not supposed to."[12] On the other hand, he says, bank accounts
and CDs are fine for holding cash for a short amount of time.
Even to the extent that CD rates are correlated with inflation, this can only be the expected
inflation at the time the CD is bought. The actual inflation will be lower or higher. Locking in the
interest rate for a long term may be bad (if inflation goes up) or good (if inflation goes down).
For example, in the 1970s, inflation increased higher than it had been, and this was not fully
reflected in interest rates. This is particularly important for longer-term notes, where the
interest rate is locked in for some time. This gave rise to amusing nicknames for CDs.[Example?]
A little later, the opposite happened, and inflation declined.
In general, and in common with other fixed interest investments, the economic value of a CD
rises when market interest rates fall, and vice versa.
Some banks pay lower than average rates, while others pay higher rates.[13] In the United
States, depositors can take advantage of the best FDIC-insured rates without increasing their
risk.[14]
As with other types of investment, investors should be suspicious of a CD offering an unusually

high rate of return. For example Allen Stanford used fraudulent CDs with high rates to lure
people into his Ponzi scheme.
Individual retirement account
This article is part of a series on
Taxation in the United States
Logo of the Internal Revenue Service.svg
BY SACHIN BAGAL
Page 42
Federal taxation
State and local taxation
Federal tax reform
flag United States portal
An individual retirement account[1] (IRA) in the United States is a form of pension[2] provided
by many financial institutions that provides tax advantages for retirement savings. It is a trust
that holds investment assets purchased with a taxpayer's earned income for the taxpayer's
eventual benefit in old age. An individual retirement account is a type of individual retirement
arrangement[3] as described in IRS Publication 590, Individual Retirement Arrangements (IRAs).
[4] Other arrangements include employer-established benefit trusts and individual retirement
annuities,[5] by which a taxpayer purchases an annuity contract or an endowment contract
from a life insurance company.[6]
Contents
1 Types
2 Custodians
3 Funding
4 Restricted investments
5 Distribution of funds
6 Bankruptcy status
7 Protection from creditors
8 Borrowing
9 Double taxation
10 Inheriting
11 Statistics
11.1 Retirement savings
12 Similar policies in other countries
BY SACHIN BAGAL
Page 43
13 See also
14 Citations.
Types There are several types of IRAs:
Traditional IRA – Contributions are often tax-deductible (often simplified as "money is

deposited before tax" or "contributions are made with pre-tax assets"), all transactions and
earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income
BY SACHIN BAGAL
Page 44
(except for those portions of the withdrawal corresponding to contributions that were not
deducted). Depending upon the nature of the contribution, a traditional IRA may be a
"deductible IRA" or a "non-deductible IRA". Traditional IRAs were introduced with the
Employee Retirement Income Security Act of 1974 (ERISA) and made popular with the
Economic Recovery Tax Act of 1981.
Roth IRA – Contributions are non-deductible and transactions within the IRA have no tax
impact. The contributions may be withdrawn at any time without penalty, and earnings may be
withdrawn tax-free in retirement. Named for Senator William V. Roth Jr., the Roth IRA was
introduced as part of the Taxpayer Relief Act of 1997.
myRA – a 2014 Obama administration initiative based on the Roth IRA
SEP IRA – a provision that allows an employer (typically a small business or self-employed
individual) to make retirement plan contributions into a Traditional IRA established in the
employee's name, instead of to a pension fund in the company's name.
SIMPLE IRA – a Savings Incentive Match Plan for Employees that requires employer matching
contributions to the plan whenever an employee makes a contribution. The plan is similar to a
401(k) plan, but with lower contribution limits and simpler (and thus less costly) administration.
Although it is termed an IRA, it is treated separately.
Conduit IRA – a traditional IRA funded exclusively with a transfer from a qualified plan, such as
a 401(k) plan.
Conduit IRAs have fallen in use due to 2001 legislation that allowed for direct transfers between
qualified plans without an intermediate IRA, but plan administrators may choose to accept
transfers only from conduit IRAs. Transferring funds from a qualified plan to a conduit IRA
preserves certain tax and asset protection advantages that apply to the qualified plan.[7]
A self-directed IRA is considered the same by the tax code, but refers to IRAs where the
custodian allows the investor wider flexibility in choosing investments, typically including
alternative investments.[8] Some examples of these alternative investments are: real estate,
private mortgages, private company stock, oil and gas limited partnerships, precious metals,
horses, and intellectual property. While the Internal Revenue Code (IRC) has placed a few
restrictions on what can be invested in, the IRA custodian may impose additional restrictions on
what assets they will custody. Self-directed IRA custodians, or IRA custodians who specialize in
alternative investments, are better equipped to handle transactions involving alternative
investments.
BY SACHIN BAGAL
Page 45
Some IRA custodians and some investment funds specialize in socially responsible investing,
sometimes using public environmental, social and corporate governance ratings.
Starting with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), many of
the restrictions of what type of funds could be rolled into an IRA and what type of plans IRA
funds could be rolled into were significantly relaxed. Additional legislation since 2001 has
further relaxed restrictions. Essentially, most retirement plans can be rolled into an IRA after
meeting certain criteria, and most retirement plans can accept funds from an IRA. An example
of an exception is a non-governmental 457 plan which cannot be rolled into anything but
another non-governmental 457 plan.
The tax treatment of the above types of IRAs (except for Roth IRAs) are very similar, particularly
for rules regarding distributions. SEP IRAs and SIMPLE IRAs also have additional rules similar to
those for qualified plans governing how contributions can and must be made and what
employees are qualified to participate.
Custodians
Custodians can include:
Banks
Mutual fund companies, sometimes for the purpose of offering their own mutual funds
Brokerage firms, either independent or "captive" (affiliated with a specific mutual fund or
insurance company) Life insurance companies
Individual retirement arrangements were introduced in 1974 with the enactment of the
Employee Retirement Income Security Act (ERISA).[9] Taxpayers could contribute up to fifteen
percent of their annual income or $1,500, whichever is less, each year and reduce their taxable
BY SACHIN BAGAL
Page 46
income by the amount of their contributions.[9] The contributions could be invested in a special
United States bond paying six percent interest, annuities that begin paying upon reaching age
59, or a trust maintained by a bank or an insurance company.[9]
Initially, ERISA restricted IRAs to workers who were not covered by a qualified employment-
based retirement plan.[9] In 1981, the Economic Recovery Tax Act (ERTA) allowed all working
taxpayers under the age of 70 to contribute to an IRA, regardless of their coverage under a
qualified plan.[10] It also raised the maximum annual contribution to $2,000 and allowed
participants to contribute $250 on behalf of a nonworking spouse.[10]
The Tax Reform Act of 1986 phased out the deduction for IRA contributions among workers
covered by an employment-based retirement plan who earned more than $35,000 if single or
over $50,000 if married filing jointly.[11] Other taxpayers could still make nondeductible
contributions to an IRA.[11]
The maximum amount allowed as an IRA contribution was $1,500 from 1975 to 1981, $2,000
from 1982 to 2001, $3,000 from 2002 to 2004, $4,000 from 2005 to 2007, $5,000 from 2008 to
2012, $5,500 from 2013 to 2018, and $6,000 from 2019 to 2021. Beginning in 2002, those over
50 years old could make an additional contribution of up to $1,000 called a "catch-up
contribution".[12]
Current[when?] limitations:
The IRS allows an investor to revoke a new IRA, without penalty, for seven calendar days after
opening it.
An IRA can be funded only with cash or cash equivalents. Attempting to transfer any other type
of asset[example needed] into the IRA is a prohibited transaction and disqualifies the fund from
its beneficial tax treatment.
Additionally, an IRA (or any other tax-advantaged retirement plan) can be funded only with
what the IRS calls "taxable compensation". This in turn means that certain types of income
cannot be used to contribute to an IRA; these include but are not limited to:
Any unearned taxable income.
Any tax-exempt income, apart from military combat pay.
Social Security payments, whether retirement pensions or disability payments, may or may not
be taxable, but in either case are not eligible.
BY SACHIN BAGAL
Page 47
Child support payments received. (On the other hand, alimony and separate maintenance
payments, if taxable, are eligible.)
Rollovers, transfers, and conversions between IRAs and other retirement arrangements can
include any asset.
The total contributions a person can make to all of their traditional and Roth IRAs cannot be
more than the lesser amount of either their earned income for the year or $6,000 ($7,000 if the
contributor is age 50 or older). The latter figure is examined annually to determine if an
inflationary adjustment is needed and has been in effect from 2019 to 2021.
This limit applies to the total annual contributions to both Roth IRAs and traditional IRAs. For
example, a person aged 45, who put $4,000 into a traditional IRA this year so far, can either put
$2,000 more into this traditional IRA, or $2,000 in a Roth IRA, or some combination of those.
The amount of the traditional IRA contributions that can be deducted is partially reduced for
levels of income beyond a threshold, and eliminated beyond another threshold, if the
contributor or the contributor's spouse is covered by an employer-based retirement plan. The
dollar amounts of the thresholds vary depending on tax filing status (single, married, etc.) and
on which spouse is covered at work (see IRS Publication 590-A, "Contributions to Individual
Retirement Arrangements (IRAs)").
Once money is inside an IRA, the IRA owner can direct the custodian to use the cash to
purchase most types of publicly traded securities (traditional investments), and non-publicly
traded securities (alternative investments). Specific assets such as collectibles (e.g., art, baseball
cards, and rare coins) and life insurance cannot be held in an IRA. The U.S. Internal Revenue
Code (IRC) only outlines what is not allowed in an IRA. Some assets are allowed according to the
IRC, but the custodians may add additional restrictions for accounts held in their custody. For
example, the IRC allows an IRA to own a piece of rental property, but certain custodians may
not allow this to be held in their custody.
While there are only a few restrictions on what can be invested inside an IRA, some restrictions
pertain to actions which would create a prohibited transaction with those investments. For
example, an IRA can own a piece of rental real estate, but the IRA owner cannot receive or
provide any immediate benefit from/to this real estate investment. An example of such benefit
would be the use of the real estate as the owner's personal residence, allowing a parent to live
in the property, or allowing the IRA account owner to fix a leaky toilet. The IRS specifically
states that custodians may impose their own policies above the rules imposed by the IRS.[13]
Neither custodians nor administrators can provide advice.
BY SACHIN BAGAL
Page 48
Many IRA custodians limit available investments to traditional brokerage accounts such as
stocks, bonds, and mutual funds. Investments in an asset class such as real estate would only be
permitted in an IRA if the real estate is held indirectly via a security such as a publicly traded or
non-traded real estate investment trust (REIT).[14] Self-directed IRA custodians/administrators
can allow real estate and other non-traditional assets held in forms other than a REIT, such as a
piece of rental property, raw land, or fishing rights.
Publicly traded securities such as options, futures or other derivatives are allowed in IRAs, but
certain custodians or brokers may restrict their use. For example, some options brokers allow
their IRA accounts to hold stock options, but others do not. Using certain derivatives or
investments that involve leverage may be allowed by the IRC, it may also cause the IRA to pay
taxes under the rules of Unrelated Business Income Tax (UBIT). Self-directed IRAs which hold
alternative investments such as real estate, horses, or intellectual property, can involve more
complexity than IRAs which only hold stocks or mutual funds.
An IRA may borrow or loan money but any such loan must not be personally guaranteed by the
owner of the IRA. Any loan on assets in the IRA would be required to be a non-recourse loan.
The loan could not be personally secured by the IRA account owner, or the IRA itself. It can only
be secured by the asset in question. The owner of the IRA may not pledge the IRA as security
against an outside debt.
Distribution of funds
Although funds can be distributed from an IRA at any time, there are limited circumstances
when money can be distributed or withdrawn from the account without penalties.[15] Unless
an exception applies, money can typically be withdrawn penalty-free as taxable income from an
IRA once the owner reaches age 59 years and 6 months. Also, non-Roth owners must begin
taking distributions of at least the calculated minimum amounts by April 1 of the year after
reaching age 72. If the required minimum distribution (RMD) is not taken the penalty is 50% of
the amount that should have been taken. The amount that must be taken is calculated based
on a factor taken from the appropriate IRS table and is based on the life expectancy of the
owner and possibly his or her spouse as beneficiary if applicable. Withdrawals are taxable
unless paid to a charity after age 72; this cutoff has changed over time. Payments to charities
are called Qualified Charitable Distributions (QCD).[16] At the death of the owner, distributions
must continue and if there is a designated beneficiary, distributions can be based on the life
expectancy of the beneficiary.[17]
There are several exceptions to the rule that penalties apply to distributions before age 591⁄2.
Each exception has detailed rules that must be followed to be exempt from penalties. This
BY SACHIN BAGAL
Page 49
group of penalty exemptions are popularly known as hardship withdrawals. The exceptions
include:[18]
The portion of unreimbursed medical expenses that are more than 7.5% of adjusted gross
income
Distributions that are not more than the cost of medical insurance while unemployed
Disability (defined as not being able to engage in any substantial gainful activity)
Amounts distributed to beneficiaries of a deceased IRA owner
Distributions in the form of an annuity (see substantially equal periodic payments)
Distributions that are not more than the qualified higher education expenses of the owner or
their children or grandchildren
Distributions to buy, build, or rebuild a first home ($10,000 lifetime maximum)
Distribution due to an IRS levy of the plan
There are a number of other important details that govern different situations. For Roth IRAs
with only contributed funds the basis can be withdrawn before age 59 without penalty (or tax)
on a first in first out basis, and a penalty would apply only on any growth (the taxable amount)
that was taken out before 59 where an exception didn't apply. Amounts converted from a
traditional to a Roth IRA must stay in the account for a minimum of 5 years to avoid having a
penalty on withdrawal of basis unless one of the above exceptions applies.
If the contribution to the IRA was nondeductible or the IRA owner chose not to claim a
deduction for the contribution, distributions of those nondeductible amounts are tax and
penalty free.
Bankruptcy status
BY SACHIN BAGAL
Page 50
In the case of Rousey v. Jacoway, the United States

Supreme Court ruled unanimously on April 4, 2005, that under section 522(d)(10)(E) of the
United States Bankruptcy Code (11 U.S.C. § 522(d)(10)(E)), a debtor in bankruptcy can exempt
his or her IRA, up to the amount necessary for retirement, from the bankruptcy estate.[19] The
Court indicated that because rights to withdrawals are based on age, IRAs should receive the
same protection as other retirement plans. Thirty-four states already had laws effectively
allowing an individual to exempt an IRA in bankruptcy, but the Supreme Court decision allows
federal protection for IRAs.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 expanded the
protection for IRAs. Certain IRAs (rollovers from SEP or Simple IRAs, Roth IRAs, individual IRAs)
are exempt up to at least $1,000,000 (adjusted periodically for inflation) without having to
show necessity for retirement.[20] The law provides that "such amount may be increased if the
interests of justice so require." Other IRAs (rollovers from most employer sponsored retirement
plans (401(k)s, etc.) and non-rollover SEP and SIMPLE IRAs) are entirely exempt.[21]
The 2005 BAPCPA also increased the Federal Deposit Insurance Corporation insurance limit for
IRA deposits at banks.
The United States Court of Appeals for the Eleventh Circuit has ruled that if an IRA engages in a
"prohibited transaction" under Internal Revenue Code sections 408(e)(2) and 4975(c)(1), the
assets in the IRA will no longer qualify for bankruptcy protection.[22]
With respect to inherited IRAs, the United States Supreme Court ruled, in the case of Clark v.
Rameker in June 2014, that funds in an inherited IRA do not qualify as "retirement funds"
within the meaning of the federal bankruptcy exemption statute, 11 U.S.C. section 522(b)(3)(C).
[23]
Protection from creditors

There are several options of protecting an IRA: (1) roll it over into a qualified plan like a 401(k),
(2) take a distribution, pay the tax and protect the proceeds along with the other liquid assets,
BY SACHIN BAGAL
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or (3) rely on the state law exemption for IRAs. For example, the California exemption statute
provides that IRAs and self-employed plans' assets "are exempt only to the extent necessary to
provide for the support of the judgment debtor when the judgment debtor retires and for the
support of the spouse and dependents of the judgment debtor, taking into account all
resources that are likely to be available for the support of the judgment debtor when the
judgment debtor retires". What is reasonably necessary is determined on a case-by-case basis,
and the courts will take into account other funds and income streams available to the
beneficiary of the plan. Debtors who are skilled, well-educated, and have time left until
retirement are usually afforded little protection under the California statute as the courts
presume that such debtors will be able to provide for retirement.[citation needed]
Many states have laws that prohibit judgments from lawsuits to be satisfied by seizure of IRA
assets. For example, IRAs are protected up to $500,000 in Nevada from Writs of Execution.[24]
However, this type of protection does not usually exist in the case of divorce, failure to pay
taxes, deeds of trust, and fraud.
IRAs are protected from creditors during bankruptcy up to $1,000,000 (the act requires the IRS
to adjust this limit for inflation every three years; the most recent adjustment was $1,362,800
in 2019).[25][26] An exception is that inherited IRAs do not qualify for an exemption from the
bankruptcy estate and thus federal law does not protect them from creditors in bankruptcy.[27]
Some state laws, however, may protect inherited IRAs from creditors in bankruptcy.[25]
Borrowing
An IRA owner may not borrow money from the

IRA except for a 60-day period in a calendar year.[4] Any borrowing in excess of 60 days in a
calendar year disqualifies the IRA from special tax treatment. An IRA may incur debt or borrow
money secured by its assets, but the IRA owner may not guarantee or secure the loan
personally. An example of this is a real estate purchase within a self-directed IRA along with a
non-recourse mortgage.
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Income from debt-financed property in an IRA may generate unrelated business taxable income
in the IRA.
The rules regarding IRA rollovers and transfers allow the IRA owner to perform an "indirect
rollover" to another IRA. An indirect rollover can be used to temporarily "borrow" money from
the IRA, once in a twelve-month period. The money must be placed in an IRA arrangement
within 60 days, or the transaction will be deemed an early withdrawal (subject to the
appropriate withdrawal taxes and penalties) and may not be replaced.
Double taxation
Double taxation still occurs within these tax-sheltered investment arrangements. For example,
foreign dividends may be taxed at their point of origin, and the IRS does not recognize this tax
as a creditable deduction. There is some controversy over whether this violates tax treaties,
such as the Convention Between Canada and the United States of America With Respect to
Taxes on Income and on Capital.[28]
Inheriting
If the IRA owner dies, different rules are applied depending on who inherits the IRA (spouse,
other beneficiary, multiple beneficiaries, and so on).
In case of spouse inherited IRAs, the owner's spouse has the following options:
treat the IRA account as his or her own, which means that he or she can name a beneficiary for
the assets, continue to contribute to the IRA and avoid having to take distributions. This avoids
paying the extra 10% tax on early distributions from an IRA.
rollover the IRA funds into another plan and take distributions as a beneficiary. Distributions
will be determined by the required minimum distribution rules based on the surviving spouse's
life expectancy.
disclaim up to 100% of the IRA assets, which, besides avoiding extra taxable income, enables
their children to inherit the IRA assets
take all of the IRA assets out in one lump-sum, which can subject the spouse to federal taxes if
particular requirements are not met
In case of non-spouse inherited IRAs, the beneficiary cannot choose to treat the IRA as his or
her own, but the following options are available:
take out the assets in a lump-sum cash distribution, which may lead the beneficiary to be
subject to federal taxes that could take away a significant portion of the assets.
BY SACHIN BAGAL
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disclaim all or part of the assets in the IRA for up to 9 months after the IRA owner's death.
if the beneficiary is older than the IRA owner, he or she can take distributions from the account
based on the IRA owner's age.
In case of multiple beneficiaries the distribution amounts are based on the oldest beneficiary's
age. Alternatively, multiple beneficiaries can split the inherited IRA into separate accounts, in
which case the RMD rules will apply separately to each separate account.[29]
Statistics :
Detailed statistics on IRAs have been collected by

the Employee Benefit Research Institute, in its EBRI IRA Database (Center for Research on IRAs),
[30] and various analyses performed. An overview is given in (Copeland 2010). Some highlights
from the 2008 data follow:[31]
The average and median IRA account balance was $54,863 and $15,756, respectively, while the
average and median IRA individual balance (all accounts from the same person combined) was
$69,498 and $20,046. The average is significantly higher than the median (over three times
higher), reflecting significant positive skew – very large balances increase the average.
Average and median balances increased with age, reaching a maximum in the 65–69 age group,
before leveling off for 70 and over.
Rollovers overwhelm contributions – the overwhelming majority of IRA contributions, in dollar

terms, were from rollovers, rather than new contributions – over 10 times as much is added to
IRAs from rollovers than new contributions.
While many rollovers were small (28.5% were less than $5,000, and 53.1% were lesFrom
Wikipedia, the free encyclopedia
BY SACHIN BAGAL
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Find sources: "Credit card" – news · newspapers · books · scholar · JSTOR (January 2021) (Learn
how and when to remove this template message)
Banking
Types of banks
Accounts · Cards
Accounts
Christmas club Deposit Money-market Savings Time deposit (Bond)
Cards
ATM Credit Debit
Funds transfer
Terms
Related topics
An example of the front in a typical credit card:
Issuing bank logo
EMV chip (only on "smart cards")
Hologram
Card number
Card network logo
Expiration date
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Card holder name
Contactless chip
An example of the reverse side of a typical credit card:
Magnetic stripe
Signature strip
Card security codeA credit card is a payment card issued to users (cardholders) to enable the
cardholder to pay a merchant for goods and services based on the cardholder's accrued debt
(i.e., promise to the card issuer to pay them for the amounts plus the other agreed charges).[1]
The card issuer (usually a bank or credit union) creates a revolving account and grants a line of
credit to the cardholder, from which the cardholder can borrow money for payment to a
merchant or as a cash advance. There are two credit card groups: consumer credit cards and
business credit cards. Most cards are plastic, but some are metal cards (stainless steel, gold,
palladium, titanium),[2][3] and a few gemstone-encrusted metal cards.[2]
A regular credit card is different from a charge card, which requires the balance to be repaid in
full each month or at the end of each statement cycle.[4] In contrast, credit cards allow the
consumers to build a continuing balance of debt, subject to interest being charged. A credit
card differs from a charge card also in that a credit card typically involves a third-party entity
that pays the seller and is reimbursed by the buyer, whereas a charge card simply defers
payment by the buyer until a later date.
A credit card also differs from a debit card, which can be used like currency by the owner of the
card.
In 2018, there were 1.12 billion credit cards in circulation in the U.S., and 72% of adults had at
least one card.[5]
Contents
1 Technical specifications
2 History
2.1 Edward Bellamy's Looking Backward
2.2 Charge coins, medals, and so on
2.3 Early charge cards
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2.4 Bank Americard and Master Charge
2.5 Development outside North America
2.6 Design and vintage credit cards as collectibles
3 Usage
3.1 Minimum payment
3.2 Advertising, solicitation, application and approval
3.3 Interest charges
3.4 Grace period
3.5 Parties involved
3.6 Transaction steps
3.7 Credit card register
4 Features
4.1 Consumers' limited liability
5 Specialized types
5.1 Business credit cards
5.2 Secured credit cards
5.3 Prepaid cards
5.4 Digital cards
5.5 Charge cards
6 Benefits and drawbacks
6.1 Benefits to cardholder
6.2 Detriments to cardholders
6.3 Detriments to society
6.4 Benefits to merchants
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6.5 Costs to merchants
7 Security
7.1 Code 10
8 Costs and revenues of credit card issuers
8.1 Costs
8.2 Revenues
9 Fees charged to customers
9.1 Controversy
10 Over-limit charges
10.1 United Kingdom
10.2 United States
11 Neutral consumer resources
11.1 Canada
12 Credit cards in ATMs
12.1 Acceptance mark
13 Credit cards as funding for entrepreneurs
14 Alternatives
15 See also
16 References
17 Further reading
18 External links
Technical specifications
The size of most credit cards is 85.60 by 53.98 millimetres (3+3⁄8 in × 2+1⁄8 in) and rounded
corners with a radius of 2.88–3.48 millimetres (9⁄80–11⁄80 in)[6] conforming to the ISO/IEC 7810
ID-1 standard, the same size as ATM cards and other payment cards, such as debit cards.[7]
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Credit cards have a printed[8] or embossed bank card number complying with the ISO/IEC 7812
numbering standard. The card number's prefix, called the Bank Identification Number (known
in the industry as a BIN[9]), is the sequence of digits at the beginning of the number that
determine the bank to which a credit card number belongs. This is the first six digits for
MasterCard and Visa cards. The next nine digits are the individual account number, and the
final digit is a validity check digit.[10]
Both of these standards are maintained and further developed by ISO/IEC JTC 1/SC 17/WG 1.
Credit cards have a magnetic stripe conforming to the ISO/IEC 7813. Most modern credit cards
use smart card technology: they have a computer chip embedded in them as a security feature.
In addition, complex smart cards, including peripherals such as a keypad, a display or a
fingerprint sensor are increasingly used for credit cards.
In addition to the main credit card number, credit cards also carry issue and expiration dates
(given to the nearest month), as well as extra codes such as issue numbers and security codes.
Complex smart cards allow to have a variable security code, thus increasing security for online
transactions. Not all credit cards have the same sets of extra codes nor do they use the same
number of digits.
Credit card numbers and cardholder names were originally embossed, to allow for easy transfer
of such information to charge slips printed on carbon paper forms. With the decline of paper
slips, some credit cards are no longer embossed and in fact the card number is no longer in the
front.[11] In addition, some cards are now vertical in design, rather than horizontal.
History
Edward Bellamy's Looking Backward
The concept of using a card for purchases was described in 1887 by Edward Bellamy in his
utopian novel Looking Backward. Bellamy used the term credit card eleven times in this novel,
although this referred to a card for spending a citizen's dividend from the government, rather
than borrowing,[12] making it more similar to a debit card. Charge coins, medals, and so on
Charge coins and other similar items were used from the late 19th century to the 1930s. They
came in various shapes and sizes; with materials made out of celluloid (an early type of plastic),
copper, aluminum, steel, and other types of whitish metals.[13] Each charge coin usually had a
little hole, enabling it to be put in a key ring, like a key. These charge coins were usually given to
customers who had charge accounts in department stores, hotels, and so on. A charge coin
usually had the charge account number along with the merchant's name and logo.
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The charge coin offered a simple and fast way to copy a charge account number to the sales
slip, by imprinting the coin onto the sales slip. This sped up the process of copying, previously
done by handwriting. It also reduced the number of errors, by having a standardized form of
numbers on the sales slip, instead of various kinds of handwriting style.[14]
Because the customer's name was not on the charge coin, almost anyone could use it. This
sometimes led to a case of mistaken identity, either accidentally or intentionally, by acting on
behalf of the charge account owner or out of malice to defraud both the charge account owner
and the merchant. Beginning in the 1930s, merchants started to move from charge coins to the
newer Charga-Plate.[15]
Early charge cards
Charga-Plate
The Charga-Plate, developed in 1928, was an early predecessor of the credit card and was used
in the U.S. from the 1930s to the late 1950s. It was a 2+1⁄2-by-1+1⁄4-inch (64 mm × 32 mm)
rectangle of sheet metal related to Addressograph and military dog tag systems. It was
embossed with the customer's name, city, and state. It held a small paper card on its back for a
signature. In recording a purchase, the plate was laid into a recess in the imprinter, with a paper
"charge slip" positioned on top of it. The record of the transaction included an impression of
the embossed information, made by the imprinter pressing an inked ribbon against the charge
slip.[16] Charga-Plate was a trademark of Farrington Manufacturing Co.[17] Charga-Plates were
issued by large-scale merchants to their regular customers, much like department store credit
cards of today. In some cases, the plates were kept in the issuing store rather than held by
customers. When an authorized user made a purchase, a clerk retrieved the plate from the
store's files and then processed the purchase. Charga-Plates sped up back-office bookkeeping
and reduced copying errors that were done manually in paper ledgers in each store.
Air Travel Card

In 1934, American Airlines and the Air Transport Association simplified the process even more
with the advent of the Air Travel Card.[18] They created a numbering scheme that identified
the issuer of the card as well as the customer account. This is the reason the modern UATP
cards still start with the number 1. With an Air Travel Card, passengers could "buy now, and pay
later" for a ticket against their credit and receive a fifteen percent discount at any of the
accepting airlines. By the 1940s, all of the major U.S. airlines offered Air Travel Cards that could
be used on 17 different airlines. By 1941, about half of the airlines' revenues came through the
Air Travel Card agreement. The airlines had also started offering installment plans to lure new
BY SACHIN BAGAL
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travellers into the air. In 1948, the Air Travel Card became the first internationally valid charge
card within
DEBIT CARD
Card
From Wikipedia,
This article needs to be updated. Please help update this article to reflect recent events or
newly available information. (February 2021)
A debit card (also known as a bank card, plastic card or check card) is a payment card that can
be used in place of cash to make purchases. It is similar to a credit card, but unlike a credit card,
the money for the purchase must be in the cardholder's bank account at the time of a purchase
and is immediately transferred directly from that account to the merchant's account to pay for
the purchase.
Some debit cards carry a stored value with which a payment is made (prepaid card), but most
relay a message to the cardholder's bank to withdraw funds from the cardholder's designated
bank account. In some cases, the payment card number is assigned exclusively for use on the
Internet and there is no physical card. This is referred to as a virtual card.
In many countries, the use of debit cards has become so widespread they have overtaken
cheques in volume, or have entirely replaced them; in some instances, debit cards have also
largely replaced cash transactions. The development of debit cards, unlike credit cards and
charge cards, has generally been country-specific, resulting in a number of different systems
around the world, which were often incompatible. Since the mid-2000s, a number of initiatives
have allowed debit cards issued in one country to be used in other countries and allowed their
use for internet and phone purchases.
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Debit cards usually also allow an instant withdrawal of cash, acting as an ATM card for this
purpose. Merchants may also offer cashback facilities to customers, so that a customer can
withdraw cash along with their purchase. There are usually daily limits on the amount of cash
that can be withdrawn. Most debit cards are plastic, but there are cards made of metal, and
rarely wood.[1]
Contents
1 Types of debit card systems
1.1 Online debit system
1.2 Offline debit system
1.3 Electronic purse card system
1.4 Prepaid debit cards
1.4.1 Nomenclature
1.4.2 Users
1.4.3 Advantages
1.4.4 Risks
1.4.5 Types
1.4.6 Governments
1.4.7 Impact of government-provided bank accounts
2 Consumer protection
3 Financial access
4 Issues with deferred posting of offline debit
5 Internet purchases
6 Debit cards around the world
6.1 Angola
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6.2 Armenia
6.3 Australia
6.4 Bahrain
6.5 Belgium
6.6 Brazil
6.7 Benin
6.8 Bulgaria
6.9 Burkina Faso
6.10 Canada
6.10.1 Consumer protection in Canada
6.11 Chile
6.12 Colombia
6.13 Côte d'Ivoire
6.14 Denmark
6.15 Finland
6.16 France
6.16.1 Liability and e-cards
6.17 Germany
6.18 Guinée Bissau
6.19 Greece
6.20 Hong Kong
6.21 Hungary
6.22 India
6.23 Indonesia
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6.24 Iraq
6.25 Ireland
6.26 Israel
6.27 Italy
6.28 Japan
6.29 Kuwait
6.30 Malaysia
6.31 Mali
6.32 Mexico
6.33 Netherlands
6.34 New Zeal
6.52 Venezuela
7 See also
8 References
Types of debit card systems
BY SACHIN BAGAL
Page 64
An
example of the front of a typical debit card:
Issuing bank logo
EMV chip (optional and may depend on the issuing institution or bank)
Hologram (in some cards it's located at the back especially in most MasterCard)
Card number (PAN) (may vary in length but mostly 16-digits with unique last 4 digits. However
in cases such as Discover, Diner's Club, UnionPay & American Express it has a unique 15-digit
card number
An example of the reverse side of a typical debit card:
Magnetic stripe
Signature strip panel
Card Security Code
There are currently three ways that debit card transactions are processed: EFTPOS (also known
as online debit or PIN debit), offline debit (also known as signature debit), and the Electronic
Purse Card System. One physical card can include the functions of all three types, so that it can
be used in a number of different circumstances. The five major debit card networks are
UnionPay, American Express, Discover, Mastercard, and Visa. Other card networks are STAR,
JCB, Pulse etc. There are many types of debit cards, each accepted only within a particular
BY SACHIN BAGAL
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country or region, for example Switch (now: Maestro) and Solo in the United Kingdom, Interac
in Canada, Carte Bleue in France, EC electronic cash (formerly Eurocheque) in Germany,
Bancomat/PagoBancomat in Italy, UnionPay in China, RuPay in India and EFTPOS cards in
Australia and New Zealand. The need for cross-border compatibility and the advent of the euro
recently led[dubious – discuss] to many of these card networks (such as Switzerland's "EC
direkt", Austria's "Bankomatkasse", and Switch in the United Kingdom) being re-branded with
the internationally recognized Maestro logo, which is part of the Mastercard brand. Some debit
cards are dual branded with the logo of the (former) national card as well as Maestro (for
example, EC cards in Germany, Switch and Solo in the UK,[dubious – discuss] Pinpas cards in the
Netherlands, Bancontact cards in Belgium, etc.). The use of a debit card system allows
operators to package their product more effectively while monitoring customer spending.
Online debit system
Online debit cards require electronic authorization of every transaction and the debits are
reflected in the user's account immediately. The transaction may be additionally secured with
the personal identification number (PIN) authentication system; some online cards require such
authentication for every transaction, essentially becoming enhanced automatic teller machine
(ATM) cards.One difficulty with using online debit cards is the necessity of an electronic
authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter
the PIN, although this is becoming commonplace for all card transactions in many countries.
Overall, the online debit card is generally viewed as superior to the offline debit card because of
its more secure authentication system and live status, which alleviates problems with
processing lag on transactions that may only issue online debit cards. Some on-line debit
systems are using the normal authentication processes of Internet banking to provide real-time
online debit transactions.
Offline debit system
Offline debit cards have the logos of major credit cards (for example, Visa[2] or Mastercard)
Electronic purse card system
Smart-card-based electronic purse systems (in which value is stored on the card chip, not in an
externally recorded account, so that machines accepting the card need no network
connectivity) are in use throughout Europe since the mid-1990s, most notably in Germany
(Geldkarte), Austria (Quick Wertkarte), the Netherlands (Chipknip), Belgium (Proton),
Switzerland (CASH) and France (Moneo, which is usually carried by a debit card). In Austria and
Germany, almost all current bank cards now include electronic purses, whereas the electronic
purse has been recently phased out in the Netherlands.
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Prepaid debit cards
Nomenclature
Prepaid debit cards are reloadable and can be also called reloadable debit cards.
Users
The primary market for prepaid debit cards has historically been unbanked people;[3] that is,
people who do not use banks or credit unions for their financial transactions.[4]
Advantages
Advantages of prepaid debit cards include being safer than carrying cash, worldwide
functionality due to Visa and MasterCard merchant acceptance, not having to worry about
paying a credit card bill or going into debt, the opportunity for anyone over the age of 18 to
apply and be accepted without checks on creditworthiness, and the option to deposit
paychecks and government benefits directly onto the card for free.[5] A newer advantage is use
of EMV[clarification needed] technology and even contactless functionality, which had
previously been limited to bank debit cards and credit cards.
Risks
If the card provider offers an insecure website for the cardholder to check the balance on the
card, this could give an attacker access to the card information.
If the user loses the card, and has not somehow registered it, the user likely loses the money.
If a provider has technical issues, the money might not be accessible when a user needs it.
Some companies' payment systems do not appear to accept prepaid debit cards.[citation
needed]
There is also a risk that prolific use of prepaid debit cards could lead data provider companies to
miscategorize a user in unfortunate ways.[citation needed][clarification needed]
Types
Prepaid cards vary by the issuer company: key and niche financial players (sometimes
collaborations between businesses); purpose of usage (transit card, beauty gift cards, travel
card, health savings card, business, insurance, others); and regions.
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Governments
As of 2013, several city governments (including Oakland, California,[6] and Chicago, Illinois[7])
are now offering prepaid de
Prepaid debit cards are reloadable and can be also called reloadable debit cards
needed]
miscategorize a user in unfortunate ways.[citation needed][clarification
Governments
are now offering prepaid debit cards, either as part of a municipal ID card (for people such as
illegal immigrants who are unable to obtain a state driver's license or DMV ID card) in the case
of Oakland, or in conjunction with a prepaid transit pass (Chicago). These cards have been
heavily criticized[8][9] for their higher-than-average fees, including some (such as a flat fee
BY SACHIN BAGAL
Page 68
added onto every purchase made with the card) that similar products offered by Green Dot and
American Express do not have.
The U.S. federal government uses prepaid debit cards to make benefits payments to people
who do not have bank accounts. In 2008, the U.S. Treasury Department paired with Comerica
Bank to offer the Direct Express Debit MasterCard prepaid debit card.[10]
In July 2013, the Association of Government Accountants released a report on government use
of prepaid cards, concluding that such programs offer a number of advantages to governments
and those who receive payments on a prepaid card rather than by check. The prepaid card
programs benefit payments largely for cost savings they offer and provide easier access to cash
for recipients, as well as increased security. The report also advises that governments should
consider replacing any remaining cheque-based payments with prepaid card programs in order
to realize substantial savings for taxpayers, as well as benefits for payees.[11]
Impact of government-provided bank accounts
In January 2016, the UK government introduced a requirement for banks to offer fee-free basic
bank accounts for all, having a significant impact on the prepaid industry, including the
departure of a number of firms.[12]
Consumer protections vary, depending on the network used. Visa and MasterCard, for instance,
prohibit minimum and maximum purchase sizes, surcharges, and arbitrary security procedures
on the part of merchants. Merchants are usually charged higher transaction fees for credit
transactions, since debit network transactions are less likely to be fraudulent. This may lead
them to "steer" customers to debit transactions. Consumers disputing charges may find it
easier to do so with a credit card, since the money will not immediately leave their control.
Fraudulent charges on a debit card can also cause problems with a checking account because
the money is withdrawn immediately and may thus result in an overdraft or bounced checks. In
some cases debit card-issuing banks will promptly refund any disputed charges until the matter
can be settled, and in some jurisdictions the consumer liability for unauthorized charges is the
same for both debit and credit cards.
In some countries, like India and Sweden, the consumer protection is the same regardless of
the network used. Some banks set minimum and maximum purchase sizes, mostly for online-
only cards. However, this has nothing to do with the card networks, but rather with the bank's
judgement of the person's age and credit records. Any fees that the customers have to pay to
the bank are the same regardless of whether the transaction is conducted as a credit or as a
debit transaction, so there is no advantage for the customers to choose one transaction mode
over another. Shops may add surcharges to the price of the goods or services in accordance
BY SACHIN BAGAL
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with laws allowing them to do so. Banks consider the purchases as having been made at the
moment when the card was swiped, regardless of when the purchase settlement was made.
Regardless of which transaction type was used, the purchase may result in an overdraft because
the money is considered to have left the account at the moment of the card swiping.
According to Singapore local financial and banking laws and regulations, all Singapore issued
credit card and debit card Visa or MasterCard swipe magnet strips are disabled by default if
used outside of Singapore. The whole idea is to prevent fraudulent activities and the protection
of the card holder. If customers want to use card swipe magnet strips aboard and
internationally, they will have to activate and enable international card usage.
Financial access
Debit cards and secured credit cards are popular among college students who have not yet
established a credit history.[13] Debit cards may also be used by expatriate workers to send
money home to their families holding an affiliated debit card.
Issues with deferred posting of offline debit
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The consumer perceives a debit transaction as occurring in real time: the money is withdrawn
from their account immediately after the authorization request from the merchant. In many
countries, this is correct for online debit purchases. However, when a purchase is made using
the "credit" (offline debit) option, the transaction merely places an authorization hold on the
customer's account; funds are not actually withdrawn until the transaction is reconciled and
hard-posted to the customer's account, usually a few days later. This is in contrast to a typical
credit card transaction, in which, after a few days delay before the transaction is posted to the
account, there is a further period of maybe a month before the consumer makes repayment.
Because of this, in the case of an intentional or unintentional error by the merchant or bank, a
debit transaction may cause more serious problems (for example, money not accessible;
overdrawn account) than a credit card transaction (for example, credit not accessible; over
credit limit). This is especially true in the United States, where check fraud is a crime in every
state, but exceeding one's credit limit is not.[original research?]
Internet purchases
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Debit cards may also be used on the Internet, either with or without using a PIN. Internet
transactions may be conducted in either online or offline mode. Shops accepting online-only
cards are rare in some countries (such as Sweden), while they are common in other countries
(such as the Netherlands). For a comparison, PayPal offers the customer to use an online-only
Maestro card if the customer enters a Dutch address of residence, but not if the same customer
enters a Swedish address of residence.
Internet purchases can be authenticated by the consumer entering their PIN if the merchant
has enabled a secure online PIN pad, in which case the transaction is conducted in debit mode.
Otherwise, transactions may be conducted in either credit or debit mode (which is sometimes,
but not always, indicated on the receipt), and this has nothing to do with whether the
transaction was conducted in online or offline mode, since both credit and debit transactions
may be conducted in both modes.
Debit cards around the world
This section does not cite any sources. Please help improve this section by adding citations to
reliable sources. Unsourced material may be challenged and removed. (December 2016) (Learn
In some countries, banks tend to levy a small fee for each debit card transaction. In other
countries (for example, the UK) the merchants bear all the costs and customers are not
charged. There are many people who routinely use debit cards for all transactions, no matter
how small. Some (small) retailers refuse to accept debit cards for small transactions, where
paying the transaction fee would absorb the profit margin on the sale, making the transaction
uneconomic for the retailer.
Some businesses do not accept card payments at all, even in an era with declining use of cash.
This still happens for a variety of reasons, tax avoidance by small business included.
In 2019, £35,000 million in tax revenue was lost in the United Kingdom due to cash-only
payments. Many businesses such as, barber shops, fish & chip shops, Chinese takeaways, the
black market, and even some building sites are known for cash-in-hand payments in the UK,
meaning high amounts of money can be unaccounted for.[citation needed]
Angola
Main article: Multicaixa
The banks in Angola issue by official regulation only one brand of debit cards: Multicaixa, which
is also the brand name of the one and only network of ATMs and POS terminals.
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Armenia
ArCa (Armenian Card), a national system of debit (ArCa Debit and ArCa Classic) and credit (ArCa
Gold, ArCa Business, ArCA Platinum, ArCa Affinity and ArCa Co-branded) cards popular in
Armenia. Established in 2000 by 17 largest Armenian banks.
Australia
Main article: EFTPOS § Australia
Debit cards in Australia are called different names depending on the issuing bank:
Commonwealth Bank of Australia: Keycard; Westpac Banking Corporation: Handycard; National
Australia Bank: FlexiCard; ANZ Bank: Access card; Bendigo Bank: Easy Money card.
A payment in Australia using a debit card is commonly called EFTPOS, which is very popular and
has been operating there since the 1980s. EFTPOS-enabled cards are accepted at almost all
swipe terminals able to accept credit cards, regardless of the bank that issued the card,
including Maestro cards issued by foreign banks and formerly issued by the Commonwealth
Bank, with most businesses accepting them, with 450,000 point of sale terminals.[14]
EFTPOS cards can also be used to deposit and withdraw cash over the counter at Australia Post
outlets participating in Giro Post and withdrawals without purchase from certain major
retailers, just as if the transaction was conducted at a bank branch, even if the bank branch is
closed. Electronic transactions in Australia are generally processed via the Telstra Argent and
Optus Transact Plus network—which has recently superseded the old Transcend network in the
last few years. Most early keycards were only usable for EFTPOS and at ATM or bank branches,
whilst the new debit card system works in the same way as a credit card, except it will only use
funds in the specified bank account. This means that, among other advantages, the new system
is suitable for electronic purchases without a delay of two to four days for bank-to-bank money
transfers.
Australia operates both electronic credit card transaction authorization and traditional EFTPOS
debit card authorization systems, the difference between the two being that EFTPOS
transactions are authorized by a personal identification number (PIN) while credit card
transactions can additionally be authorized using a contactless payment mechanism (requiring
a PIN for purchases over $200). If the user fails to enter the correct pin three times, the
consequences range from the card being locked out for a minimum 24-hour period, a phone
call or trip to the branch to reactivate with a new PIN, the card being cut up by the merchant, or
in the case of an ATM, being kept inside the machine, both of which require a new card to be
ordered.
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Generally credit card transaction costs are borne by the merchant with no fee applied to the
end user (although a direct consumer surcharge of 0.5–3% is not uncommon) while EFTPOS
transactions cost the consumer an applicable withdrawal fee charged by their bank.
The introduction of Visa and MasterCard debit cards along with regulation in the settlement
fees charged by the operators of both EFTPOS and credit cards by the Reserve Bank has seen a
continuation in the increasing ubiquity of credit card use among Australians and a general
decline in the profile of EFTPOS. However, the regulation of settlement fees also removed the
ability of banks, who typically provide merchant services to retailers on behalf of Visa or
MasterCard, from stopping those retailers charging extra fees to take payment by credit card
instead of cash or EFTPOS.
Bahrain
In Bahrain debit cards are under Benefit, the interbanking network for Bahrain. Benefit is also
accepted in other countries though, mainly GCC, similar to the Saudi Payments Network and
the Kuwaiti KNET.
Belgium
In Belgium, debit cards are widely accepted in most businesses, as well as in most hotels and
restaurants. Smaller restaurants or small retailers often accept either; only debit cards or cash-
only, but no credit cards. All Belgian banks provide debit cards when you open a bank account.
Usually, it is free to use debit cards on national and EU ATMs even if they aren't owned by the
issuing bank. Since 2019, a few banks charge a 50ct cost when using ATMs who are not owned
by the issuing bank. The debit cards in Belgium are branded with the logo of the national
Bancontact system and also with an international debit system, Maestro (for the moment there
aren't any banks who issue the V-Pay or Visa Electron cards even if they are widely accepted),
the Maestro system is used mostly for payments in other countries, but a few national card
payment services use the Maestro system. Some banks also offer Visa and MasterCard debit
cards but these are mostly online banks.
Brazil
In Brazil debit cards are called cartão de débito (singular) and became popular in 2008. In 2013,
the 100 millionth Brazilian debit card was issued.[15] Debit cards replaced cheques, common
until the first decade of the 2000s.
Today, the majority of the financial transactions (like shopping, etc.) are made using debit cards
(and this system is quickly replacing cash payments). Nowadays, the majority of debit payments
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are processed using a card + pin combination, and almost every card comes with a chip to make
transactions.
The major debit card vendors in Brazil are Visa (with Electron cards), Mastercard (with Maestro
cards), and Elo.
Benin
Main article: Economic Community of West African States § West African Economic and
Monetary Union
Bulgaria
In Bulgaria, debit cards are accepted in almost all stores and shops, as well as in most of the
hotels and restaurants in the bigger cities. Smaller restaurants or small shops often accept cash
only. All Bulgarian banks can provide debit cards when you open a bank account, for
maintenance costs. The most common cards in Bulgaria are contactless (and Chip&PIN or
Magnetic stripe and PIN) with the brands of Debit Mastercard and Visa Debit (the most
common were Maestro and Visa Electron some years ago).[16] All POS terminals and ATMs
accept Visa, Visa Electron, Visa Debit, VPay, Mastercard, Debit Mastercard, Maestro and Bcard.
[17] Also some POS terminals and ATMs accept Discover, American Express, Diners Club, JCB
and UnionPay.[18] Almost all POS terminals in Bulgaria support contactless payments. Credit
cards are also common in Bulgaria. Paying with smartphones/smartwatches at POS terminals is
also getting common.[19]
Burkina Faso
Monetary Union
Canada
Main article: Interac
Canada has a nationwide EFTPOS system, called Interac Direct Payment (IDP). Since being
introduced in 1994, IDP has become the most popular payment method in the country.
Previously, debit cards have been in use for ABM usage since the late 1970s, with credit unions
in Saskatchewan and Alberta introducing the first card-based, networked ATMs beginning in
June 1977. Debit cards, which could be used anywhere a credit card was accepted, were first
introduced in Canada by Saskatchewan Credit Unions in 1982.[2] In the early 1990s, pilot
projects were conducted among Canada's six largest banks to gauge security, accuracy and
feasibility of the Interac system. Slowly in the later half of the 1990s, it was estimated that
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approximately 50% of retailers offered Interac as a source of payment. Retailers, many small
transaction retailers like coffee shops, resisted offering IDP to promote faster service. In 2009,
99% of retailers offer IDP as an alternative payment form.
In Canada, the debit card is sometimes referred to as a "bank card". It is a client card issued by
a bank that provides access to funds and other bank account transactions, such as transferring
funds, checking balances, paying bills, etc., as well as point of purchase transactions connected
on the Interac network. Since its national launch in 1994, Interac Direct Payment has become so
widespread that, as of 2001, more transactions in Canada were completed using debit cards
than cash.[20] This popularity may be partially attributable to two main factors: the
convenience of not having to carry cash, and the availability of automated bank machines
(ABMs) and direct payment merchants on the network. Debit cards may be considered similar
to stored-value cards in that they represent a finite amount of money owed by the card issuer
to the holder. They are different in that stored-value cards are generally anonymous and are
only usable at the issuer, while debit cards are generally associated with an individual's bank
account and can be used anywhere on the Interac network.
In Canada, the bank cards can be used at POS and ATMs. Interac Online has also been
introduced in recent years allowing clients of most major Canadian banks to use their debit
cards for online payment with certain merchants as well. Certain financial institutions also allow
their clients to use their debit cards in the United States on the NYCE network.[21][22] Several
Canadian financial institutions that primarily offer VISA credit cards, including CIBC, RBC,
Scotiabank, and TD, also issue a Visa Debit card in addition to their Interac debit card, either
through dual-network co-branded cards (CIBC, Scotia, and TD),[23][24][25] or as a "virtual" card
used alongside the customer's existing Interac debit card (RBC).[26] This allows for customer to
use Interlink for online, over-the-phone, and international transactions and Plus for
international ATMs, since Interac isn't well supported in these situations.
Consumer protection in Canada
Consumers in Canada are protected under a voluntary code entered into by all providers of
debit card services, The Canadian Code of Practice for Consumer Debit Card Services[27]
(sometimes called the "Debit Card Code"). Adherence to the Code is overseen by the Financial
Consumer Agency of Canada (FCAC), which investigates consumer complaints.
According to the FCAC website, revisions to the code that came into effect in 2005 put the onus
on the financial institution to prove that a consumer was responsible for a disputed transaction,
and also place a limit on the number of days that an account can be frozen during the financial
institution's investigation of a transaction.
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Chile
Chile has an EFTPOS system called Redcompra (Purchase Network) which is currently used in at
least 23,000 establishments throughout the country. Goods may be purchased using this
system at most supermarkets, retail stores, pubs and restaurants in major urban centers.
Chilean banks issue Maestro, Visa Electron and Visa Debit cards.
Colombia
Colombia has a system called Redeban-Multicolor and Credibanco Visa which are currently used
in at least 23,000 establishments throughout the country. Goods may be purchased using this
Colombian debit cards are Maestro (pin), Visa Electron (pin), Visa Debit (as credit) and
MasterCard-Debit (as credit).
Côte d'Ivoire
Monetary Union
Denmark
The Danish debit card Dankort is ubiquitous in Denmark. It was introduced on 1 September
1983, and despite the initial transactions being paper-based, the Dankort quickly won
widespread acceptance. By 1985 the first EFTPOS terminals were introduced, and 1985 was also
the year when the number of Dankort transactions first exceeded 1 million.[28] Today Dankort
is primarily issued as a Multicard combining the national Dankort with the more internationally
recognized Visa (denoted simply as a "Visa/Dankort" card). In September 2008, 4 million cards
had been issued, of which three million cards were Visa/Dankort cards. It is also possible to get
a Visa Electron debit card and MasterCard.[clarification needed]
In 2007, PBS (now called Nets), the Danish operator of the Dankort system, processed a total of
737 million Dankort transactions.[29] Of these, 4.5 million were processed on just a single day,
21 December. This remains the current record.[as of?]
At the end of 2007, there were 3.9 million Dankort cards in existence.[29]
As of 2012, more than 80,000 Danish shops had a Dankort terminal, and another 11,000
internet shops also accepted the
Prepaid debit cards are reloadable and can be also called reloadable debit card
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needed]
miscategorize a user in unfortunate ways.[citation needed][clarification need
are now offering prepaid debit cards, either as part of a municipal ID card (for people such as
illegal immigrants who are unable to obtain a state driver's license or DMV ID card) in the case
of Oakland, or in conjunction with a prepaid transit pass (Chicago). These cards have been
heavily criticized[8][9] for their higher-than-average fees, including some (such as a flat fee
added onto every purchase made with the card) that similar products offered by Green Dot and
American Express do not have.The U.S. federal government uses prepaid debit cards to make
benefits payments to people who do not have bank accounts. In 2008, the U.S. Treasury
Department paired with Comerica Bank to offer the Direct Express Debit MasterCard prepaid
debit card.[10]
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Impact of government-provided bank accounts
In January 2016, the UK government introduced a requirement for banks to offer fee-free basic
bank accounts for all, having a significant impact on the prepaid industry, including the
departure of a number of firms.[12]
Consumer protection
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Financial access
Internet purchases
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Angol Main article: Multicaixa
is also the brand name of the one and only network of ATMs and POS terminals.
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DEBIT CARD
transfers.
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ordered.
Bahrain
the Kuwaiti KNET.
Belgium In Belgium, debit cards are widely accepted in most businesses, as well as in most
hotels and restaurants. Smaller restaurants or small retailers often accept either; only debit
cards or cash-only, but no credit cards. All Belgian banks provide debit cards when you open a
bank account. Usually, it is free to use debit cards on national and EU ATMs even if they aren't
owned by the issuing bank. Since 2019, a few banks charge a 50ct cost when using ATMs who
are not owned by the issuing bank. The debit cards in Belgium are branded with the logo of the
national Bancontact system and also with an international debit system, Maestro (for the
moment there aren't any banks who issue the V-Pay or Visa Electron cards even if they are
widely accepted), the Maestro system is used mostly for payments in other countries, but a few
national card payment services use the Maestro system. Some banks also offer Visa and
MasterCard debit cards but these are mostly online banks.
Brazil
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transactions.
cards), and Elo.
Benin
Monetary Union
also getting common.[19]
Burkina Faso
Monetary Union
Canada
Main article: Interac
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Chile
Colombia
Côte d'Ivoire
Monetary Union
Denmark
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Colombia
Monetary Union
Denmark
As of 2012, more than 80,000 Danish shops had a Dankort terminal.
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Advantages
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MONEY MARKET CONTROL
people who do not use banks or credit unions for their financial transactions.[4
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needed]
miscategorize a user in unfortunate ways.[citation needed][clarification needed]
Governments
As of 2013,
several city governments (including Oakland, California,[6] and Chicago, Illinois[7]) are now
offering prepaid debit cards, either as part of a municipal ID card (for people such as illegal
immigrants who are unable to obtain a state driver's license or DMV ID card) in the case of
Oakland, or in conjunction with a prepaid transit pass (Chicago). These cards have been heavily
criticized[8][9] for their higher-than-average fees, including some (such as a flat fee added onto
every purchase made with the card) that similar products offered by Green Dot and American
Express do not have.
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The U.S. federal government uses prepaid debit cards to make benefits payments to people
who do not have bank accounts. In 2008, the U.S. Treasury Department paired with Comerica
Bank to offer the Direct Express Debit MasterCard prepaid debit card.[10]
Impact of government-provided bank acco
Consumer protection
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Financial access
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INTERENT PURCHSE
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Angola
Main article: Multicaixa
is also the brand name of the one and only network of ATMs and POS terminals
Main article: EFTPOS § Australia
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transfers.
ordered.
Bahrain
the Kuwaiti KNET.
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In Belgium, debit cards are widely accepted in most businesses, as well as in most hotels and
restaurants. Smaller restaurants or small retailers often accept either; only debit cards or cash-
only, but no credit cards. All Belgian banks provide debit cards when you open a bank account.
Usually, it is free to use debit cards on national and EU ATMs even if they aren't owned by the
issuing bank. Since 2019, a few banks charge a 50ct cost when using ATMs who are not owned
by the issuing bank. The debit cards in Belgium are branded with the logo of the national
Bancontact system and also with an international debit system, Maestro (for the moment there
aren't any banks who issue the V-Pay or Visa Electron cards even if they are widely accepted),
the Maestro system is used mostly for payments in other countries, but a few national card
payment services use the Maestro system. Some banks also offer Visa and MasterCard debit
cards but these are mostly online banks.
transactions.
cards), and
Monetary Unio
also getting common.[19] Main article: Economic Community of West African States § West
African Economic and Monetary Union
BY SACHIN BAGAL
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Chile
Colombia
Consulsion
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Monetary Union
Denmark
internet shops also accepted .
ision, Mission And GoalsHome Vision, Mission and Goals
Vision, Mission And Goals

Our Vision:
“To be the clients’ best choice through offering an integrated and distinctive bundle of banking
services”
Our Mission:
“To provide advanced and creative banking products and services for all our clients, both locally
and internationally, through a successful team and using advanced programs, techniques and
tools that keep up with the advancements in today’s world, in an effort to fulfill the aspirations
of our clients, shareholders and employees, and to reflect our values of social responsibility”
Our Goals:
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To provide the best Islamic banking and investment services.
Building and developing a professional banking services team, with the best experience and the
ability to implement the latest techniques and systems.
Building a strategic relationship with its clients and finance and banking institutions, both locally
and internationally.
Contributing to the promotion of social responsibility.
Attracting deposits and developing them, in order to achieve the best financial return for
shareholders and depositors.
Expanding banking activities to include new sectors and economic activities; such as
agriculture, industry, trade and services.
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NAME : SACHIN GANPATI BAGAL
REGISTRATION NO : WRO0722030
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PROJECT NAME: ONLINE BANKING SEACTOR

STUDENT NAME : SACHIN GANPATI BAGAL

ONLINE BANKING SEACTOR

9. VISION OF BANKING SEACTOR

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The Bank of England, established in 1694

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Coin issued during the reign of the Roman emperor Maximum

Salary Wage Salary packaging Employee stock ownership Employee benefits

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Personal budget and investment

Bank Cooperative Credit union

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The Bank of England, established in 1694

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Main article: History of banking

Interior of the Helsinki Branch of the Vyborg-Bank [fi] in the 1910s

Branch of Nepal Bank in Pokhara, Western Nepal.

"banking business" means the business of either or both of the following:

paying or collecting cheques drawn by or paid in by customers.[18]

Main article: History of banking

Interior of the Helsinki Branch of the Vyborg-Bank [fi] in the 1910s

Banco de Venezuela in Coro.

Branch of Nepal Bank in Pokhara, Western Nepal.

"banking business" means the business of either or both of the following:

paying or collecting cheques drawn by or paid in by customers.[18]

Large door to an old bank vault.

Interior of the Helsinki Branch of the Vyborg-Bank [fi] in the 1910s

Branch of Nepal Bank in Pokhara, Western Nepal.

paying or collecting cheques drawn by or paid in by customers.[18]

Large door to an old bank vault.

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Christmas club Deposit Money-market Savings Time deposit (Bond)

Transaction (checking / current)

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1.1 United States

1.1.1 High yield savings accounts

Amy Fontinelle. "Banking: Savings Accounts 101".