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Call deposits

Category: Concept of the Bank and the Banking System

Call deposits are represented by different accounts to which their owners can get cash on demand by the statement of cash and payment documents. For Call deposits in domestic banking practices include:

— Funds held in the settlement and current accounts of public joint-stock enterprises, and various small commercial structures;

— Funds of funds for various purposes during the period of their use;

— Means in the calculations;

— Local budgets and local budgets;

— Balances on correspondent accounts with other banks;

— Call deposits.

The advantage of demand deposit accounts for their owners is their high liquidity. Money into such accounts are credited and removed with the implementation of economic and other operations, reflected in terms of money in those accounts. The main drawback — the lack of payment of interest on the account or a very low percentage. Thus, the features of a deposit account demand can be summarized as follows:

— Depositing and withdrawing money made at any time without any restrictions;

— The account holder pays the bank a fee for use of the account in the form of a solid monthly rate or a percentage of debits;

— A bank for deposit funds in call deposit accounts pay lower interest rates or do not pay (funds in the calculations);

— The bank on Call deposits allocates higher rates to fund the required reserves at the Central Bank.

In the world of banking practice, along with the regular deposit account at call widely developed these types of deposit accounts on demand, as the now-account and certified checks (USA).

NOW-account — a deposit account demand, which can prescribe the settlement documents to third parties. These accounts combine the principle of liquidity with the ability to generate revenue as a percentage. These accounts are open only to individuals and nonprofit firms.

Accounts certified checks — this demand deposit accounts, which are isolated funds to pay for certified checks. The latter are checks on which the bank makes a special note about the availability of funds to pay for them. In domestic practice, this kind of settlement checks had the name «settlement checks, accepted by the Bank.» Currently, the analog of these accounts can be considered as accounts on which stores cash checks for payment of limited checkbooks.

In countries with developed market economies, the share of Call deposits accounted for about 30% in the amount of borrowed resources.

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