Introductions to Banking?
What Is Bank?
A bank is a financial institution and a financial intermediary that accepts deposit and channels those deposit into lending activities, either directly by loaning or indirectly through capital markets. such as wealth management, currency exchange, safe deposit boxes and more.
What Is Banking?
Banking is a business of accepting deposits and lending money. It is carried out by financial intermediaries, which performs the functions of safeguarding deposits and providing loans to the public.
In other words, Banking means accepting for the purpose of lending or investment of deposits of money from public repayable on demand and can be withdrawn by cheque, draft order and so on.
# There is no difference between Bank and Banking.
Digital financial services can be defined broadly as digital access and use of Financial services by the people. Such services should be suited to customers’ needs, and delivered responsibly, at a cost both affordable to customers and providers. Digital finance also has an important role to play for small businesses. It not only provides them with access to financing but also to electronic payment systems, secure financial products and a chance to build a financial history. It can be a catalyst for the provision and use of a diverse set of other financial services- including credit, insurance, savings, and financial education. ex;
- Digital Transaction Platform
- Retail Agent
Whenever we go for Opening an account in a bank, one thing comes to our mind – which type of account is best suited for us – a saving account, current account, recurring deposit account or a fixed deposit account. As a valued customer, the bank offers innovative products to redefine banking convenience. With their expertise, we can rest assured that our wealth is protected and nurtured at the same time.
Types of Accounts and Deposits
Savings Account: A deposit saving account held at a bank or other financial institution that provides principal security and a modest interest rate. Depending on the specific type of savings account, the account holder may not be able to write checks from the account (without incurring extra fees or expenses) and the account is likely to have a limited number of free transfers/transactions. Savings account funds are considered one, of the most liquid investments outside of demand accounts and cash. In contrast to saving accounts, checking accounts allow you to write checks and use electronic debit to check your funds inside the account. Savings accounts are generally for money that you don’t intend to use for daily expenses. To open a savings account, simply go down to your local bank with proper identification and ask to open an account.
Current Account: A bank deposit account that supports regular money transactions related to business. This account is suitable for business purposes. The current account is an important indicator of an economy’s health. It is defined as the sum of the balance of trade (goods and services), net income from abroad and net current transfers.
A positive current account balance indicates that the nation is a net lender to the rest of the world while negative current account balance indicates that it is a net borrower from the rest of the world. A current account surplus increases a nation’s net foreign assets by the amount of the surplus, and a current account deficit decreases it by that amount. The current account and the capital account are the two main components of a nation’s balance of payments.
Recurring Deposit Account: Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people with regular income to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits. It is similar to making FDs of a certain amount in monthly installments, for example, Rs 1000 every month. This deposit matures on a specific date in the future along with all the deposits made every month. Thus, Recurring Deposit schemes allow customers with an opportunity to build up their savings through regular monthly deposits of fixed sum over a fixed period of time. Minimum Period of RD is months and the maximum is 10 years.
Fixed Deposit Account: In India, Fixed Deposits are one of the most popular ways to save money. They are a safe investment, offer good returns, and are easy to open.
So, what exactly is a Fixed Deposit?
In a Fixed Deposit, you put a lump sum in your bank for a fixed tenure at an agreed rate of interest. At the end of the tenure, you receive the amount you have invested plus compound interest.
FDs are also called term deposits.