1. TYPES OF BANK ACCOUNTS

2. DEFINITION
a bank account is a monetary account with a banking institution recording the balance of money for a customer
they can have a positive/credit balance where the bank holds money on behalf of the customer
or a negative/debit balance where the customer owes the bank some money
banks send statements of account to their clients to inform them about the state of their account
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3. I. DEPOSIT ACCOUNT
the bank holds money on behalf of the account holder
some banks charge a fee for this service, others pay the client interest on the deposited funds
the account holder holds rights to the deposit
the withdrawal of money depends on the terms and conditions of the account and the bank
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4. TYPES OF DEPOSIT ACCOUNTS
checking account
money market account
savings account
term deposit
long term deposits
short term deposits
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5. a) CHECKING ACCOUNT
held at a bank or other financial institution in order to provide quick access to funds
money is available on demand
bank does not offer interest
it is not suitable for saving money
customer can withdraw money any time and in what amount he wants depending on the funds
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6. b) MONEY MARKET ACCOUNT
has a relatively high rate of interest
when the client needs to withdraw money short notice or no notice is needed
typically used in the USA
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7. c) SAVINGS ACCOUNT an account which is maintained by a bank
cannot be used directly as money
is suitable for saving money
some savings accounts require funds to be kept on deposit for a minimum length of time
all financial transactions are listed in a passbook or a bank statement
to withdraw money you have to give notice to the bank in advance
bank pays interest rate to the client
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8. d) TERM DEPOSITS
cannot be withdrawn for a certain term or period of time
when the term is over, money can be withdrawn or held for another term
the longer the term, the better the interest
to withdraw some money it is necessary to give notice to the bank
long-term deposits – have higher interest
short-term deposits – have lower interest
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9. II. CURRENT ACCOUNT
is an account which enables to withdraw many any time in various ways (electronic payment, money order, ATM)‏
all financial transactions are listed in a bank statement or a passbook
on the credit side there are deposits, salaries, incomes of the account holder
on the debit side there are payments, money transfers, regular payments (for rent, electricity)‏
do not have high interest
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10. CURRENT ACCOUNT PAYMENTS
cash money (banknotes)‏
cheque and money order (a paper promise to pay)
giro (funds transfer, direct deposit)
direct debit (pre-authorized debit)
standing order (automatic funds transfer)
debit or credit card (cashless direct payment at a store or merchant)
SWIFT - International account to account transfer
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11. ACCESS TO CURRENT ACCOUNTS
branch networks – allow the clients to receive a wide offer of banking and financial services
cash machines (ATM) – automated machines which are used to withdraw cash and check account balances
Internet banking – clients can use the bank's secure website to look at balances and statements, perform transactions and payments
telephone banking – a call centre or automated service, provided on a 24 hour basis
mail banking
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12. BANK OVERDRAFT
occurs when withdrawals from a bank account exceed the available balance
this gives the account a negative balance and the bank is providing credit
banks also offer overdraft facility – it is credit limit on which bank and client agree on the opening of the account
if the amount overdrawn is within this authorised overdraft, then interest is normally charged at the agreed rate
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13. CURRENT ACCOUNT COSTS
banks charge a fee for doing financial transactions per item or on a monthly basis
youths, students, senior citizens or high-valued customers do not pay fees for basic financial transactions
in some countries, transaction fees do not exist, but extremely high lending rates are the norm
©Lenka Lexová