What are the common types of deposits

Summary: Bank deposits are monetary funds deposited with banks and other financial institutions by individuals and businesses. The interest rate on time deposits is the rate of compensation paid by the bank to the depositor for the amount of time deposited, as remuneration for deposits placed with the bank in the form of a fixed period of time. How is the interest rate on time deposits calculated? In fact, it is very simple, the interest on our time deposits = principal x interest rate x term. However, due to the external economic environment and the relevant policies of the central bank, the interest rate on time deposits is now reduced. First, the definition of time deposits

Time deposits, refers to the depositor will be deposited in cash in the banking institutions opened in the regular savings account, agreed in advance to a fixed period of time for the savings time, higher than the interest rate of demand deposits in return, the expiration of the period can be received in a form of savings of the principal and interest.

Time deposits are depositors in the conditions of retaining ownership, the right to use the funds or money temporarily transferred to the bank, is the most important source of credit funds. Time deposit is the bank and the depositor of the two sides in the deposit agreed in advance period, interest rate, the maturity of the deposit to withdraw principal and interest. It has the shortest deposit period of 3 months, the longest 5 years, the choice of large, more stable interest earnings characteristics.

If a depositor withdraws a time deposit before the agreed saving period, the bank will usually handle the business as a demand deposit. Depositors are often asked to notify the bank one day in advance to apply for an appointment to withdraw before they need to collect a large amount of deposits, so that the bank can prepare enough cash to cover it.

Two, the calculation of interest on time deposits

Interest rates are divided into simple interest and compound interest:

Interest rate I = P * i * n, in which I represents interest, i represents the interest rate, n represents the number of years of deposits. Our country adopts the simple interest calculation method.

①Single interest method

Interest = principal x interest rate x term.

②Compound Interest Method

(Used to calculate interest in automatic rollover)

F=P×(1+i)^N

F: Compound final value.

P: principal.

i: interest rate.

N: integer multiple of the time the interest rate was acquired.

Three common types of deposits

Deposits can be categorized in a variety of ways, such as according to the generation of the way can be divided into the original deposits and derived deposits, according to the period can be divided into demand deposits and time deposits, according to the different depositors, it can be divided into units of deposits and personal deposits. Individual deposits, that is, residents' savings deposits, are the currency deposited in the bank by individual residents.

Unit deposits

①Enterprise deposits. This is a state-owned enterprises, supply and marketing cooperatives and collective industrial enterprises, as a result of sales revenue with the time of the various expenditures do not coincide with the generation of temporarily idle monetary funds, including enterprises have been withdrawn without the use of the special funds, the most important of which is the depreciation of fixed assets fund, including profit retention. Changes in corporate deposits, depending on the enterprise's production of goods purchases and sales scale and business management conditions production or commodity turnover expansion, corporate deposits will increase, and vice versa will decline; business management improvement. Accelerated capital turnover, enterprise deposits will decrease, and vice versa. The vast majority of enterprise deposits are demand deposits, only a small portion of time deposits.

②Financial deposits. Banks act as the national treasury, all financial revenues and expenditures must be handled through the bank (see the national treasury system). Fiscal revenue and expenditure in time is often inconsistent, in the case of the first after the expenditure, temporarily unused funds on the formation of financial deposits.

3 capital construction deposits for capital construction and has not yet spent the funds formed deposits.

4 institutions, organizations, troops deposits. The above units are centralized from the financial funds have not yet been used in the formation of the deposit.

5 rural deposits. Collective agriculture, township and village enterprises and rural credit cooperatives in the bank's deposits, of which rural credit union deposits account for more than 90%.

New types of deposits are emerging in the world, such as negotiable large-value time certificates of deposit, negotiable payment order accounts, telephone transfer services and automatic transfer services, money market deposit accounts, etc. Among them, negotiable large-value time certificates of deposit have been developed in China to a certain extent.

Time deposits

The term "time deposit" refers to a type of deposit in which the depositor can only withdraw the money on a specified date after the deposit has been made or must notify the bank a number of days before the preparation of the withdrawal, and the term can range from three months to five years, and more than 10 years. Generally speaking, the longer the term of the deposit, the higher the interest rate. Traditional time deposits are available in the form of certificates of deposit as well as in the form of passbooks, the latter of which are also known as passbook time deposits, but which have a basic interest-bearing period of 90 days, with no interest accruing for periods of less than 90 days. Compared with demand deposits, time deposits have a strong stability, and lower operating costs, commercial banks to hold the reserve ratio of the deposit for this purpose is correspondingly lower, therefore, the utilization rate of the funds of the time deposits tends to be higher than that of the demand deposits.

Time deposits are used for settlement or cash withdrawal from time deposit accounts. Customers can make early withdrawals or partial early withdrawals if they need funds temporarily.

Demand deposits

These are bank deposits that can be accessed and transferred at any time without any prior notice by the depositor, and are in the form of checking accounts, certified checks, cashier's checks, traveler's checks, and letters of credit. Demand deposits make up the largest part of a country's money supply and are an important source of funds for commercial banks. Given that demand deposits not only have the function of a means of payment and circulation of money, but also have a strong generating capacity, commercial banks must at all times make demand deposits the focus of their operations. However, because of the frequent access to such deposits, complex procedures, the cost of higher fees, so the commercial banks in Western countries generally do not pay interest, and sometimes even charge a fee.

Notice deposits

Notice deposits are deposits that do not have an agreed-upon deposit period and require advance notice to the bank of the withdrawal date and the amount to be withdrawn.

Individual notice deposits, regardless of the length of the actual deposit period, are divided into two varieties: one-day notice deposits and seven-day notice deposits, according to the length of the period of notice given in advance by the depositor. One-day notice deposits must be notified one day in advance of the amount of deposit agreed to be withdrawn, while seven-day notice deposits must be notified seven days in advance of the amount of deposit agreed to be withdrawn. The minimum starting deposit, minimum withdrawal and minimum retention amount for RMB notice deposit is 50,000 yuan, and the minimum starting deposit amount for foreign currency is 1,000 U.S. dollars in foreign currency equivalent (the starting deposit amount of each bank can be consulted with the local bank).

The currencies of notice deposits can be RMB, HKD, GBP, USD, JPY, EUR, CHF, AUD, SGD (please check with your local bank for specific services and currencies in each province). The interest rates for call deposits in both RMB and foreign currencies are higher than the interest rates for demand deposits, subject to the regulations of each bank.

How to apply

Go to a bank branch with your ID card, open an account that can be linked to a call deposit and deposit a certain amount (usually more than 50,000). The choice of notice deposits can be higher than the interest rate of demand deposits, but also in a short period of time to retrieve the funds, more suitable for a short period of time to have a larger amount of idle funds, but also have an irregular capital needs of the crowd.