Basic Bank

Products
March 21, 2012
Introduction
 Importance of bank products in the modern world
 Saving money – in the past and in the present
 Bank product – usually not tangible
 Retail bank vs. Commercial bank
 Privately owned vs. Publicly owned
Basic retail bank products
 Checking account
 Most common
 Deposit, withdraw money without limits
 Money is very liquid – narrow money
 Money for immediate use
 Small or no fee for usage, small interest
Basic retail bank products
 Savings account
 To save money, pays higher interest
 Regular deposit of portion of salary
 Money not needed for immediate expenses
 Restrictions on number of withdrawals
 Taxation of interest – offshore savings accounts
Basic retail bank products
 Money market account
 Alternative to savings account; pays generally higher
interest
 The interest reflects rates paid on the money market
 Not considered as transactional account
 Restriction on number of transactions
 “larger-than-normal deposits“
Basic retail bank products
 Debit card
 Customers must have savings or checking account
 Purchase of products & services in lieu of cash –
automatically deducted
 Immediately transferred
 No transaction without finances
 Convenient, save (code identification)
Basic retail bank products
 Credit card
 Efficient way to obtain credit
 Bank makes loan to buyer, send money to merchant
immediately
 Buyer repays the loan monthly – whole sum
 Fraction of the loan – usually very high interest on
the rest
 Single payment for many purchases
 Buyer does not have to have account
Basic retail bank products
 Mortgage
 Purchase of real estate for living
 Extension of the payment over time – more
affordable
 Down payment – usually 20% of real estate value –
can vary
 Repayment for decades
 Collateral – another real estate
Basic retail bank products
 Personal loan
 Different purposes
 Different type of interest rate (fixed, variable),
length of repayment, Annual Percentage Rate (APR)
 Usually repaid monthly or lump sum
 Tangible collateral – personal/ property
Basic retail bank products
 Time deposit
 Similar to savings account – fixed interest rate
 Pre-set maturity of the account
 Money cannot be withdrawn before maturity –
announcement in advance or fee
 Useful tool for money investment for individuals
Conclusions
 Many characteristics - competitors differentiate
products
 Difficult comprehensive description
 Conditions of products depend also on client’s
financial performance
 Customers should consider many possibilities
 Services of banking advisers
Thank you for your attention!
References
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http://www.ehow.com/info_7813206_conventional-mortgage-characteristics.html.
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http://www.investopedia.com/terms/d/debitcard.asp#axzz1pDTKm0Sh.
 Investopedia. Checking account. Investopedia. [Online] 2012. [Cit: 16. March 2012.]
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 Investopedia. Money Market Account. Investopedia. [Online] 2012. [Cit: 16. March 2012.]
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