Banking Awareness
Discover Banking services in India
Shikha Adya
shikha
September 1, 2015

Banking is not everyone’s cup of tea. When you enter into accounting, there is n number of things you have to learn and compare. Especially while dealing with deposit and loans, Assets, liabilities, equality are some of the terms you must be aware of. Once you understand the meaning, you would be able to grasp the whole scenario in your mind. Then no hurdle can hinder your way to success.

Let’s have a look at these three Terms…..

Bank_services
  1. Assets: Asset is something you or your company owns in the form of the value of the item that can pave your way with economic benefits in the future. It may available in tangible or intangible items. It contributes to the value of the company and helps to maintain endurance in the market. Advancing loans and Investments come under the assert category which further divided into:
    • Secured/Unsecured Loans
    • Short and Long Terms loan

      A loan is a system in which a borrower borrows money from a money lender or any institution and assured to give it back in a fixed time period with a fixed interest rate. Regarding the Interest rate, it is determined at the time of the loan accorded.

      Types of Loans:
    • Secured/Unsecured Loans: Secured LoansUnsecured Loans
    • Subsidized/ Unsubsidized Loans: Subsidized LoansUnsubsidized Loans
    • Open-ended/ Close-ended Loans: Open-ended LoansClose-ended Loans
    • Short term/ Long term Loans: Short term LoansLong term Loans
  2. Liabilities: Liabilities are the obligations in the form of debt or payments you owe to some other company. Every year company balance sheets cover liability as legal debt or accrual that tells approximately how much you have to pay. It accepts Deposits like:
    • Demand Deposit
    • Term Deposit

      DepositsBanks usually offer the facility of opening various types of accounts in which deposits can deposit their money and without at the time of financial needs. Depending on the nature of accounts money can be withdrawn. 

      There are two types of deposit: Demand DepositsDemand Deposits are payable on account holder’s financial requirements. The money always stays in saving accounts such as a medium of exchange. Via Cheques, ownership of demand deposit can be shifted from one person to another. It has no fixed term of maturity.

      There are two types of demand deposits:

    • Current Account: A current account is also called demand deposits because the account holder can withdraw his/her money when required and the bank is always obliged to pay the money on demand.
    • Saving Account: This account is meant for people who have limited necessities and intended to save their money with less withdrawal.
    • Pay in Slip: Pay-in-slip has printed forms with perforated foil used for deposition cash or cheques. IT usually contains the name of the account holder, account number, amount deposit, and signature of the person depositing it.

CASA Deposits

Current Account Saving account (CASA) Deposits. As the name suggests it is a mixed form of both current and savings accounts. Through CASA, various services like salary accounts to company, encouraging merchants to open current accounts, etc are available. CASA deposits are low-interest deposits compare to other deposits but The Bank with a high CASA ratio is more than low CASA ratios.

Time Deposits

In Time deposits, money is saved for the fixed time period whereas payable on or after maturity of the fixed period. No more cheque facility available during the deposit term. Money only paid on maturity at a particular time. Three types of Time Deposits are:

Time Deposits
  • Fixed Deposits: Some amount of money is deposited for a fixed time period at a fixed rate of interest. The time period for fixed deposits starts from 7 days to 10 years. After the specific time, the depositor can withdraw the money or can renew the FD for the further specified time.
  • Re-investment Deposits: In recurring deposits, the amount is compounded quarterly and the procedure contains the payment on the day of its maturity along with the deposit’s principal amount. In the FD amount in saving deposit account outside a fixed limit is changed into the term deposit.
  • Recurring Deposits: FD amount is deposited regular intervals for fixed-term and the repayment of principal and accumulated interest is made at the end of the term. These deposits have usually targeted the repayment of principal and accumulated interest is made at the end of the term. These deposits are usually targeted at the person who is salaried and receive other regular income. The time period for RD starts from 6 months to 120 months.
  • EquityEquity comes by subtracting the value of the assets and the total expenses on the liabilities. In general, equality brings up when a company buys and holds a share in the Stock market. In the terms of real estate, the difference between a property’s current value and the amount of mortgage the owner owes. Take an example of a bike or car which is totally your own and you sell it anytime for the sake of money without any debt.

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