Basic Bank Products
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Trifan_DumitruBasic Bank Products
Uploaded by
Trifan_DumitruBasic Bank
Products
March 21, 2012
Introduction
Importance of bank products in the modern world
Saving money – in the past and in the present
Bank product – usually not tangible
Retail bank vs. Commercial bank
Privately owned vs. Publicly owned
Basic retail bank products
Checking account
Most common
Deposit, withdraw money without limits
Money is very liquid – narrow money
Money for immediate use
Small or no fee for usage, small interest
Basic retail bank products
Savings account
To save money, pays higher interest
Regular deposit of portion of salary
Money not needed for immediate expenses
Restrictions on number of withdrawals
Taxation of interest – offshore savings accounts
Basic retail bank products
Money market account
Alternative to savings account; pays generally higher
interest
The interest reflects rates paid on the money market
Not considered as transactional account
Restriction on number of transactions
“larger-than-normal deposits“
Basic retail bank products
Debit card
Customers must have savings or checking account
Purchase of products & services in lieu of cash –
automatically deducted
Immediately transferred
No transaction without finances
Convenient, save (code identification)
Basic retail bank products
Credit card
Efficient way to obtain credit
Bank makes loan to buyer, send money to merchant
immediately
Buyer repays the loan monthly – whole sum
Fraction of the loan – usually very high interest on
the rest
Single payment for many purchases
Buyer does not have to have account
Basic retail bank products
Mortgage
Purchase of real estate for living
Extension of the payment over time – more
affordable
Down payment – usually 20% of real estate value –
can vary
Repayment for decades
Collateral – another real estate
Basic retail bank products
Personal loan
Different purposes
Different type of interest rate (fixed, variable),
length of repayment, Annual Percentage Rate (APR)
Usually repaid monthly or lump sum
Tangible collateral – personal/ property
Basic retail bank products
Time deposit
Similar to savings account – fixed interest rate
Pre-set maturity of the account
Money cannot be withdrawn before maturity –
announcement in advance or fee
Useful tool for money investment for individuals
Conclusions
Many characteristics - competitors differentiate
products
Difficult comprehensive description
Conditions of products depend also on client’s
financial performance
Customers should consider many possibilities
Services of banking advisers
Thank you for your attention!
References
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