Service of Transaction Deposit

Service of Transaction Deposit

Commercial bank is a profit seeking the business firm, dealing in the money and credit . it is financial institution dealing in money in the sense that it accept deposit of the money from the public to keep them in its custody for safety. Bank create credit by making advance out of the fund receive as deposits to need people. It thus, function as a mobile of saving in the economic. And can help the poor people to growth up with new job and invest. The bank is very important for the trader and investor especially area people. For the bank there are many service in the bank but now I will show the special service and function that microfinance and banking usually use it for operation and invest the money. 

            There are 4 type of Deposit:

1.      Current Deposits: these deposit can be withdraw at any time. Generally, no interest is allowed on current deposits. These deposit are kept by businessmen and industrialist who receive and make the large payment through bank. And show the  benefit from these service of current account:

-         Businessmen have to receive and make number of payment everyday. It is difficult to handle cash. The cheque facility remove the difficulty.

-         There are no restrictions on the number of  check or not the amount to be drawn at the time by on check.

2.      Saving Deposits: saving deposit account is meant that for the small businessmen and individual who wish to save a little of out their current income to safeguard their future and also to earn some interest on their saving. The benefit from the saving deposit accounts, saving deposit account are very popular among the general public because of the following advantage:

-         A saving account can be opened with the little amount. It help people to the small mean saving for their future.

-         The balance lying in the saving bank earn some interest. The customer is benefit as his money grows with the bank.

-         The money lying with the bank is quite safe, there is no fear of theft or loss.

-         The money can be withdrawn conveniently from the saving account.

3.      Fixed Deposits: these deposit are also known as time deposit. These deposit cannot be withdrawn before the expiry of the period for which they are deposited or without giving a prior notice for withdrawal. If the depositor is in need of the money, he has to borrow on the security of his account and pay a slightly higher rate of interest to the bank . they are attracted by the payment of interest which is usually higher for the long period, fixed deposit are liked by depositor both for their safety and as well as for their interest. In Cambodia they are accept between three months and ten years. The following are the special characteristics of fixed deposits: 

-         Suitability: Fixed deposit are usually chosen by people who have surplus money and do not require it for some time. These deposit accounts are also favored by the bank because fixed deposit fund can be utilize by them freely till the due date of the repayment.

-         Rate of interest: bank use fixed deposit for the purpose of lending or investments. So they pay higher rate of the interest on fixed deposit.

-         Payment before due to date: bank also permit encashment of a fixed deposit even before the due date, if the depositor so desire. But the interest agreed upon on such deposit shall be reduce.

-         Advance against Fixed  deposits: the banker may also grant a loan to the depositor on the security of the fixed deposit receipt.

4.      Recurring Deposit Account: the recurring deposit account has gained wide popularity these days. Under this, the depositor is require to deposit a fixed amount of money every month for specific period of time. Each installment may vary from $100 to $500 or more per month and to ten years. After the completion of the specified period, the customer get back all his deposits along with the cumulative interest accrue on them. Recurring deposit account offers the following benefits to the public.

-         Provide a good way to save the small amount for use in the future, Education of children, marriage of children.

-         People having low income may open a recurring deposit account with a commitment to deposit account with the commitment to deposit as low as $100 every .

-         The recurring deposit account can be opened for any period ranging from 12 month to120 months.