Deposit Accounts:
A deposit account in a banking institution allows money to be deposited or withdrawn by the customer. Deposits and Withdraws are called transactions in a bank and for a bank deposits are recorded as liabilities, depending on type of deposit accounts different interest may be or may not be given to customer.1. Savings Accounts:
These are intended to provide an incentive for you to save money. These accounts are paid less interest as compared to Fixed deposits. Check books are allocated to these accounts.
Some savings accounts have a passbook, in which transactions are logged in a small booklet that you keep, while others have a monthly or quarterly statement detailing the transactions.
Some savings accounts charge a fee if your balance falls below a specified minimum.
These accounts usually do not pay interest, and they may restrict or impose additional fees for excessive activity, such as writing more than a certain number of checks per month.
These accounts are used for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels. Because money is available on demand these accounts are also referred to as demand accounts or demand deposit accounts.
3. Fixed Deposits (FD) or Certificate of Deposit (CD):
These are also known as "time deposits", because the account holder has agreed to keep the money in the account for a specified amount of time, anywhere from three months to Ten years.
Because the money will be inaccessible, the account holder is rewarded with a higher interest rate,
with the rate increasing as the duration increases.
Attributes of Deposit Accounts:1. Interest Rate
2. Deposit Amount
3. Term/Maturity Period
4. Interest Accrual
5. Interest Payment
6. Interest Disbursement
7. Interest Adjustment
Loan Accounts:
In a loan, the borrower initially receives or borrows an amount of money called principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time with some interest on principal. Loans are the major source of income for banks.Banks accepts money in deposit accounts and that money they can lend to customers on higher interests with some additional charges.
Usually borrower has to pledge some asset as security for loans.
Attributes associated with loan accounts:
1. Principal amount
3. Installment amount
4. Payment Term
5. Interest Calculation
6. Payment frequencies
7. Billing
8. Escrow amount