INTRODUCTION:

What is banking?
Banking is an industry that handles cash, credit, and
other financial transactions. Banks provide a safe
place to store extra cash and credit. They offer savings
accounts, certifi cates of deposit, and checking
accounts. Banks use these deposits to make loans.
These loans include home mortgages, business loans,
and car loans.

How does it work?

Banks are a safe place to deposit excess cash.
The Federal Deposit Insurance Corporat ion (FDIC)
insures them. 1 Banks also pay savers a small percent
of the deposited amount based on an interest rate.
Banks are current ly not required to keep any percentage
of each deposit on hand, though the Federal Reserve can
change this. That regulation is called the reserve
requirement. They make money by charging higher
interest rates on their loans than they pay for
deposits. 2
TYPES 0F BANK ACCOUNTS

Traditionally banks in India have four types of deposit

accounts, namely Current Accounts, Saving Banking
Accounts, Recurring Deposits and, Fixed Deposits.
However, in recent years, due to ever increasing
competition, some banks have introduced new products,
which comb ine the features of above two or more types
of deposit accounts. These are known by different
names in different banks, e. g 2-in-1 deposits, Smart
Deposits, Power Saving Deposits, Automatic Sweep
Deposits etc. However, these have not been very
popular among the public.

1. FIXED OR TIME DEPOSIT ACCOUNT

2. SAVING BANK DEPOSIT ACCOUNT
3. CURRENT DEPOS IT ACCOUNT
4. RECURRING DEPOSIT ACCOUNT
5. FLEXIBLE ACCOUNT
6. JAN-DHAN ACCOUNT

Bank
Accounts

Demand Term
Deposit Deposit
Account Account

Saving Current
Fixed Recurring
Account Account
Deposit Deposit
Account account
FIXED DEPOSIT OR TIME DEPOSIT ACCOUNT:

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 is known as a term deposit or time deposit
in Canada, Austral ia, New Zealand, India and The
United States, and as a bond in the United Kingdom
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. DICGC guarantees amount up to ?100000 per
depositor per bank. They also offer income
tax and weal th tax benefits.

FIXED-TERM DEPOSIT ACCOUNT

SAVING BANK DEPOSIT ACCOUNT:

A savings account is an interest -bearing deposit

account held at a bank or other financial institution.
Though these accounts typically pay a modest interest
rate, their safety and reliability make them a great
option for parking cash you want available for
short-term needs. Savings accounts have some
limitations on how often you can withdraw funds, but
general ly offer exceptional flexibility that' s ideal
for building an emergency fund, saving for a
short-term goal like buying a car or going on vacation,
or simply sweeping surplus cash you don' tneed in your
checking account so it can earn more interest
elsewhere.

Savings Account
Savings Max Account
Regular Savings Account
Women's Savings Account
Kids Advantage Account
Senior Citizen's Account

Family Saving's AccOunt

Basic Savings Bank Deposit Account
Institutional Savings Accounts
Savings Plus Account
Basic Savings bank Account Deposit( Limited KYC)
CURRENT DEPOSIT ACCOUNT:

Current bank account is opened by businessmen who have

a higher number of regular transactions with the bank.
It includes deposits, wi thdrawals, and contra
transactions. It is also known as Demand Deposit
Account. Current account can be opened in co-operative
bank and commercial bank. In current account, amount
can be deposited and wi thdrawn at any time without
giving any notice. It is also suitable for making
payments to creditors by using cheques. Cheques
received from customers can be deposited in this
account for collection. In India, current account can
be opened by depositing Rs. 5000 to Rs. 25, 000. The
customers are allowed to withdraw the amount with
cheques, and they usually do not get any interest.
Generally, current account holders do not get any
interest on their balance lying in current account with
the bank.Current account holder get one important
advantage of overdraft facility.

4.CURRENT ACCOUNT
DEPOSITS
Introduced for business purpose
No restriction on numberlamount of withdrawal
Deposits to be paid on demand (demand liability of the
banker)
No interest is given
RECURRING DEPOSIT ACCOUNT:

A recurring deposit is a special kind of term

deposit offered by banks which help people with
regular incomes to deposit a fixed amount every month
into their recurring depos it account and earn interest
at the rate applicable to fixed deposits. It is
similar to making fixed deposits of a certain amount
in monthly installments. This deposit matures on a
specific date in the future along wi th all the deposits
made every month. Recurring deposit schemes allow
customers an opportunity to build up their savings
through regular monthly deposits of a fixed sum over
a fixed period of time. The minimum period of a
recurring deposit is six months and the maximum is ten
years. The recurring deposit can be funded by standing
instructions which are the instructions by the
customer to the bank to withdraw a certain sum of money
from his savings/current account and credit to the
recurring deposit account.

Mature amount of FD (if amount is calculated quarterly) is

M
R((1+1)" -1]
[1-(1+)T]
Where M ismaturity value
R= monthly installment

i= rate of interest/ 400

n = number of quarters
hope this helps you.
PREVAILING RATE OF PREVAILING RATE OF INTREST
INTREST BY STATE BANK OF BY PUNJAB NATIONAL BANK:
INDIA:

Tenure FD Rates

FD 7 days to 14 days 3. 00%

Tenure
Rates
15 days to 29 3. 00%
days
7days - 45 4.50% 30 days to 45 3.00%
days days
46 days to 90 3. 25%
46 days - 179 5.50%
days
days 91 days to 179 4. 00%
days
|180 days to 270 4.40%
180 days - 5.80%
210 days days
271 days to 364 4. 50%
days
211 days - 5.80% 333 days 4. 50%
364 days
444 days 5. 25%

1year -1 555 days 5. 25%

6.10%
year 364 days
1 year 5.25%
2years -2
years 364 6.10% 1year 1 day to 25. 25%
days years

3 years 4 2 years 1 day to 35. 25%

years 364 6.10% years
days
CALCULATION OF INTREST:

IF WE INVEST 10000 FOR 8%P. A. FOR 5 YEARS, THEN WE

CALCULATE INTREST AS: PRT/100
THIS IS FOR SAVINGS ACCOUNT
FOR A RECURRING ACCOUNT, WE CALCULATE INTEREST AS,
I=(x*n (n+1) *R) / (2*12*100)
x' STANDS FOR THE MONTHLY INVESTMENT
'n' STANDS FOR THE TENURE
'R' STANDS FOR THE RATE OF INTEREST

Simple Interest (S) Formula

SI= Principal x Interest Rate x Time
100
where
- Slis the total simple interest payable
-principal is the sum of money on which
the interest to be earned
- interest rate is the percentage at which
interest accrued over time
-time isthe length of period
in years
CALCULATION I
X-240
N=15 MONTHS
MATURITY VALUE=3840
I=(X*N (N+1) *R) /2*12*100
I=(40*15 (15+1) *R) /2*12* 100
I=(240*15*16*R) /2*12*100
I-24R
MATURITY VALUE=NX+I
3840=(15*240) +24R
3840=3600+24R
3840-3600-24R
240=24R
R=240/24
R=10%

CALCULATION 2
M. V=7875
R=9%P. A
T= 2 YEARS= 24 MONTHS
[= P* (N+1) /2*12* (R/100)
=P*(24*25/2*12) *(9/100)
= 9P/4
M. V=P*N+I
7875=(24P/4) + (9P/4)
7875= (96P/4) + (9P/4)
7875-(96P+9P) /4
31500=105P
P=31500/105
P=300