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A, B, C - Specialised Accounting - 1

The document discusses various types of bank accounts including current accounts, savings accounts, certificate of deposit (CD) accounts, and credit card accounts. It explains the key features and purposes of each type of account such as current accounts being used for day-to-day transactions, savings accounts earning interest over time, CD accounts requiring funds to be locked up for a set period, and credit cards allowing purchases to be paid back over time.

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محمود احمد
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172 views12 pages

A, B, C - Specialised Accounting - 1

The document discusses various types of bank accounts including current accounts, savings accounts, certificate of deposit (CD) accounts, and credit card accounts. It explains the key features and purposes of each type of account such as current accounts being used for day-to-day transactions, savings accounts earning interest over time, CD accounts requiring funds to be locked up for a set period, and credit cards allowing purchases to be paid back over time.

Uploaded by

محمود احمد
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 12

LECTURE 3

(Part of) Chapter 1


2

Second: Bank Acounts:


There are more specialized accounts we talk about in this
section, but they are mostly either a renamed version of
one of these core accounts OR a specialized version of
one for a specific situation. Different types of bank
accounts serve different needs.

1- Current Accounts:

The normal banking account, running from day to day, a


balance being shown at the end of the day if there has
been any transaction on the account. The balance should
be credit all the time.
3

•They are usually free to open and use, but some


have fees and some bear interest on the balance.
•They are often used to pay bills
•People may draw money from cash machines
•They usually come with a bill pay and transfer
function
•Most current accounts have an online function these
days
4

There are a new basically account which has a


combination of current and savings accounts. Its
name in Egyptian banks is Al Modgher or Twefer.

You get the higher interest rates than the current


account with the ability to withdraw money
without penalty. However, these types of accounts
typically require you to maintain a higher monthly
minimum balance to either get the extra interest
or avoid a monthly fee.
5

Direct Debiting / Standing Orders:

Here the creditor of an installment payment makes, by


arrangement with the debtor, a direct claim on the
debtor’s account. This procedure saves time and
money and is very suitable for large creditors such as
insurance companies, mortgage and building
societies, The customer has to approve the
arrangement before any transfers are made, and
authorize his banker to meet the claims. Regular
payments so authorized continue until further notice
by the customer. The customer should be aware about
his account balance should be enough on the time,
otherwise, a charge and fines will be applied.
6

Cash Dispenser: (ATM)


A machine designed to give the customer access to a
small amount in notes, principally intended for use
during the closing hours of the bank. It consists of a
safe let into the outer wall of the bank with a keyboard.
The customer is issued with a cash card having an
electronic check by the machine. If this is satisfactory
the customer is then enabled to key his personal code
number on the keyboard, which will prompt the machine
to deliver required amount in EGP. 10 or any amount in
notes.
In some machines there is a possibility to provide
deposits cash or cheques.
7

Collection of cheques:

The customer receives cheques from his debtors and


pays these into his bank either over the counter, or by
post.
The cheques are sorted by the recipient bank and at the
end of the day are dispatched to their Cairo office, who
presents them to the drawee banks through the Clearing
House. The clearing procedure takes three working days
and if a cheque is dishonored the collecting branch will be
notified. The customer’s account is credited on the day
that he pays the cheque in, but he should not draw
against them until they are cleared (unless he has an
agreement with the bank that he may do so).
8

2- Saving Accounts:

Money is put on deposit accounts to earn interest.


Deposit interest is paid at a rate determined by the
bank’s base rate. No cheque book is issued. Interest
is credited to the current account, if there is one,
half-yearly, otherwise it is added to the balance of
the deposit account.

A customer may have to wait a few days before the


funds are released, or you may be unable to retrieve
your money until a pre-arranged and pre-agreed
date. There are many banks that will allow you to
withdraw the money early, but it usually comes with
a fee.
9

• Not typically used to pay bills or buy things


• May be used by people wishing to build wealth
• Usually an interest bearing account
• Often structured to encourage saving and punish
withdrawals
Competition among banks creates variety of features in
these accounts, to a customer the best savings accounts will
usually offer you the following:
• Easy access to any funds
• Interest rates that are competitive
• Online access
• Mobile friendly
• Fixed deposits of larger sums can be arranged for an
agreed term at rather better rates. For example:
Certificate of Deposit (CD)
10

3- Certificate of Deposit (CD)

A CD account usually allows you to earn more than any of


the accounts listed above. You have to keep your money in
the CD for a certain amount of time. For example, you might
use a six-month CD or an 18-month CD, which means you
have to keep your funds locked up for six or 18 months. This
type of account is good For a customer to invest money that
he/she does not need to spend any time soon. However, if
the customer want to pull funds out early, he/she has to pay
a penalty. In rare cases, banks refuse to honor early
withdrawal requests, and will have to wait until the term
ends.
11

Budget scheme:

This is a scheme whereby a customers’ regular


payments out over a year are evened out and debited to
him by equal monthly sums. The customer advises his
bank of the details of his expected outgoings (e.g.
electricity, gas, telephone, fuel, insurance, licenses,
school fees, holidays, clothing, subscription,
maintenance, etc). The bank totals the annual cost,
opens a budget account for the customer, and issues
him with a special budget account cheque book.
Thereafter the bank will debit the customer’s ordinary
current account, and credit the budget account, with a
monthly sum equal to one-twelfth of the annual total.
The service costs a few pounds per year.
12

4- Credit Cards:

Credit cards are similar in size and general appearance


to Debit cards, and contain similar details. The best
known cards in this country are Visa, and American
Express. With the credit card, goods can be bought in a
shop, hotel bills paid, meals out paid for, air fares met,
in many parts of the world. The retailer sends in his
account to the card company which sends out monthly
statements to each cardholder. The cardholder should
pay the statement during 45-60 days.

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