Maths Project:
Introduction : What are banks and what is banking ?
->Banks are financial institutions that accept deposits from the public, create credit,
and provide loans. They also offer a variety of financial services, including wealth
management, currency exchange, and safe deposit boxes. Banks play a crucial role in
the economy by facilitating the flow of money ,creation of money and providing the
necessary infrastructure for financial transactions.
Types of Banks:
1. Commercial Banks: These banks provide a wide range of services to
individuals and businesses, including accepting deposits, providing loans, and
offering basic investment products. Examples include JPMorgan Chase, Bank
of America, and Wells Fargo.
2. Investment Banks: These banks specialize in services such as underwriting,
facilitating mergers and acquisitions, and providing advisory services for large-
scale corporate finance transactions. Examples include Goldman Sachs and
Morgan Stanley.
3. Retail Banks: These banks cater to individual customers, offering services
such as checking and savings accounts, personal loans, mortgages, and credit
cards. Examples include HSBC and Barclays.
4. Central Banks: These are national banks that manage the country's monetary
policy, regulate the banking industry, and provide financial services to the
government. Examples include the Federal Reserve in the United States and
the European Central Bank.
5. Credit Unions: These are member-owned financial cooperatives that provide
traditional banking services but often offer more favorable rates and lower
fees. Examples include Navy Federal Credit Union and State Employees' Credit
Union.
In summary, banks are vital institutions in the financial system, offering a range of
services that support economic activity, promote financial stability, and facilitate
personal and business finance management.
Part 2: Type of banks account and description:
Sure, I'll include detailed descriptions of Recurring Deposit (RD) and Fixed Deposit
(FD) accounts in the survey of various types of bank accounts in India. Here’s an
updated overview:
1. Current Accounts
Description: Current accounts are primarily designed for businesses and
individuals who conduct a high volume of transactions. They provide easy access to
funds but typically do not offer interest.
Features:
No interest on the balance.
Unlimited transactions.
Overdraft facility (subject to bank approval).
Higher minimum balance requirements.
Additional services such as free checkbooks, demand drafts, and
internet banking.
No rate of interest
Target Users: Businesses, firms, companies, and individuals with frequent
transactions.
2. Savings Accounts
Description: Savings accounts are meant for individuals to save money while
earning interest on the deposited amount.
Features:
Earn interest on deposits (interest rates vary by bank).
Limited number of transactions per month.
Minimum balance requirements (some banks offer zero balance
accounts).
Facilities like ATM/debit cards, internet banking, and mobile banking.
Target Users: Individuals, salaried employees, and households.
Average Rate of Interest: 2.5% to 4% per annum
3. Fixed Deposit Accounts (FDs)
Description: FDs are time deposits where money is locked in for a specified
period, earning a fixed interest rate.
Features:
Higher interest rates compared to savings accounts.
Fixed tenure ranging from a few months to several years.
Penalties for premature withdrawal.
Target Users: Individuals looking for secure, long-term investment options.
Benefits:
Safe investment with predictable returns.
Option for auto-renewal at maturity.
Loan/overdraft facility against the deposit.
Average Rate of Interest:
Short-term (7 days to 1 year): 4% to 6% per annum
Medium-term (1 to 3 years): 5% to 6.5% per annum
Long-term (3 years and above): 6% to 7% per annum
4. Recurring Deposit Accounts (RDs)
Description: RDs allow individuals to deposit a fixed amount every month for
a predetermined period, earning interest.
Features:
Fixed monthly contributions.
Fixed interest rate, generally higher than savings accounts.
Flexible tenure (typically ranging from 6 months to 10 years).
Target Users: Individuals looking to save regularly with a disciplined
approach.
Benefits:
Encourages regular saving habits.
Guaranteed returns with interest compounded quarterly.
Loan facility against the deposit.
Average Rate of Interest:
Tenure of 6 months to 1 year: 4% to 5.5% per annum
Tenure of 1 year to 3 years: 5% to 6.5% per annum
Tenure of 3 years and above: 6% to 7% per annum
