Features of Current Account

Current account is a type of bank account which is generally opened for commercial use by individuals who are doing business and it is not for salaried class. Given below are some of the features of current account –

1. There is no limit to the number of times one can deposit or withdraw funds from this account and that is the reason why business class prefer this as there are numerous bank transaction during a year if you are doing a business.
2. Account holder does not receive any interest on the amount of deposit he or she has, so for example if you have kept 5000 rupees in this account for 1 year then also you will not receive any interest.
3. The account-holder can avail overdraft facility under this account; however the amount that can be overdrawn is fixed. For example if you have overdraft facility and the amount fixed by bank is 50000 rupees than you can overdraw up to 50000 rupees only and not more than that.
4. One has to maintain minimum balance in this account depending on the bank with which you are dealing, unlike saving account which can be opened with zero balance also.
5. One can issue numerous cheques under this and one does not need to worry about the additional charges.

Joint Account Basics

Many people are confused about the term joint account and also about various rules related to joint account. A Joint account is a bank account which involves more than 1 person, or in other words joint account is an account which is shared by 2 or more people. Given below are some of the basics related to joint account –

1. A joint account application must be signed by all the joint account holders who are opening the joint bank account.
2. Joint account is in the name of more than one person and also there is no ceiling to the number of joint account holders.
3. Under joint account any joint account holder can withdraw the money, which will be allowed under operating instructions of all the joint account holders and also any joint account holder can stop the payment of cheque.
4. In case of death of one of the joint account holders the representative of that joint account holder can claim the deceased share from joint account.
5. Joint account holders can nominate the person who will receive the money in case of death of all the joint account holders.
6. Banks take extra care before opening joint bank account, because many people try to take advantage of these accounts in order to save taxes.

Apart from above there are many other factors which are there depending on the bank and country in which one is opening the joint bank account, which is the reason why one should look those factors also before opening the joint bank account.

RTGS Transfer

RTGS or Real Time Gross Settlement is a transfer mechanism where transfer of money takes place from one bank to another on a real time and on gross basis. It is the fastest possible money transfer system through the banking channel.

Under RTGS transfer the transactions are settled as soon as they are processed. The beneficiary branches receive the funds in real time as soon as funds are transferred by the remitting bank. The RTGS window for customer’s transactions is available from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 12.30 noon on Saturdays. RTGS is usually done for big amounts and not for small transactions. The remitting customer has to furnish the following information to a bank so that RTGS transfer can be made -

1. The Amount which customer wants to be remit.

2. The account number of the customer who is remitting the amount to beneficiary so that his or her account can be debited

3. Name of the beneficiary bank in which the beneficiary account is there.

4. Name and account number of the beneficiary customer to which the customer wants to transfer the money.

5. The IFSC Number of the receiving branch

Wire Transfer Process

In this electronic age everybody wants to have their work quickly and same applies to transfer of money between two parties. Wire transfer refers to process by which banks transfer money from one account to another account through electronic medium. The process through which bank effect the wire transfer is explained below -

1. Wire transfer process starts when the person or a company approaches the bank and request or order the bank to transfer certain amount of money into the account of other person or a company.
2. Banks then demands the account number and IFSC or BIC codes so that bank can transfer the amount to the beneficiary.
3. After bank receives the code and account number it transmits the message through SWIFT which is the acronym for Society for Worldwide Interbank Financial Telecommunication, to the bank in which the beneficiary account is there.
4. After receiving this message which contains the payment instructions, the receiving bank will begin the process of transfer of money from sender’s account to beneficiary account, which may take 12 hours to 48 hours.

For effecting the wire transfer both sending bank and receiving bank should have mutual account with each other so that receiver does not have any problems, Banks charges fees from clients for providing wire transfer facility.

Types of Retail Loans

Retail loans are those loans which are given by the banks to individuals so as to meet there personal needs, retail loans are smaller in size as compared to corporate loans. Given below are various types of retail loans which are given by the banks -

1. Housing Loans – Most individuals take housing loans and when it comes to retail loans, housing loans is right there at the top. Banks give housing loans to individuals so that can buy apartment or construct new house if they already have the land.
2. Educational Loans – This type of loans is given by the banks to students so that they can pay for the tuition fees, hostel expenses, foreign education and other such expenses.
3. Vehicle or Auto Loans – This type of loans are given to individuals who are looking for buying cars whether new or second hand, auto loans are also given for two wheelers to individuals.
4. Personal Loans – Personal loan are the loans which are given to individuals for purposes such as marriage, traveling to abroad, loans for covering hospital expenses and other such loans which individual may need depending on his or her needs and situations.

Advantages and Disadvantages of Credit Cards

A credit card in simple words is a plastic card which can be used as substitute for cash. It is widely used by people for make payment whether it is a small sum involving buying a movie ticket or big sum like purchasing some furniture or payment at hospitals. Let’s look at some of the advantages and disadvantages of credit cards –

Advantages of Credit Cards

1. First and foremost advantage of credit card is that individual does not have to carry cash with him or her all the time as it is acceptable at all places and therefore it reduces the need for carrying cash.

2. Credit cards companies offer additional benefits such as additional insurance cover on purchases, cash back etc… which can be an additional benefit for the individuals who make credit purchases frequently.

3. Since credit cards allows one to buy now and pay later it gives a lot of flexibility to the buyer when there is festival season and buyer needs more money to buy the goods.

Disadvantages of Credit Cards

1. Due to credit card people tend to overspend and they end up buying those goods which they do not really require and therefore person using credit cards should keep this thing in mind that credit card does not give goods or services for free but they only delay the payment.

2. If a person is not able to repay the credit card installment then it will lead to trouble for him or her as interest rate on credit card is much higher than interest rate normal loan or borrowing.

3. Credit cards are more prone to fraud or theft and therefore person should keep this thing in mind before using the credit card.

What is Unsecured Credit Card

A credit card is a plastic card which enables the buyer of a good or service to buy them now and pay for it later. Banks all over the world provides this facility of credit card to their customers. An unsecured credit card is one which is issued without any security from the customers; it is generally issued to those customers who have good credit history.

The limit which is given on unsecured credit card depends on the customer to which it is being issued. Unsecured credit card has the advantage that a person who has unsecured credit card has to pay fewer charges when it comes to interest rate and upfront fees, unlike normal credit card which has higher interest rate charges. However unsecured credit cards are given only to select customers who have excellent credit rating which is decided by the bank on certain fixed parameters which differs from one bank to another. Unsecured credit cards are prevalent in western countries like USA and UK and are not popular in other parts of world.

Functions of a Bank

Banks are the key contributors towards the well being of the economic system as a whole, without banks there cannot be any economic activity possible as banks are one of major pillars of smooth economic activity, given below are some of the functions of a bank –

1. Banks makes possible transfer of consumption to future by accepting deposits from the public, imagine if there was no banking system then you have to either store your money in your house or spend on goods and services immediately after receiving the money.
2. It helps in creating entrepreneurs because talented individuals do not always have the money with them to execute their plans and for them banks by providing loans can to them helps them in carrying out their dream.
3. It enables individuals and companies to transfer money from one place to another without any hassles and within short period of time, a person can transfer money from one place to anywhere in world within 1 or 2 days.
4. It also provides various facilities like merchant banking, ATM, personalized banking and so on to the customers.
5. It also helps in maintaining the flow of funds from household in the form saving to companies in the form of loans and thus stimulating the overall economic activity of a country.
6. It also helps people in paying money later for current consumption by providing credit cards and letter of credit facilities to its customers.

Uses of Credit Rating

Credit rating refers to assessment of the financial position of the company based on various parameters, in simple words credit rating refers to the ability of a company or an individual to repay its debt on time. Given below are some of the uses of credit rating –

1. Credit rating is used by the investors for making investment decision about the debt or equity of company, based on the credit rating which company has received from credit rating agency.
2. Credit rating is also used by a company; because a company which has received good credit rating can raise funds easily from either capital markets in the form of issue of equity shares or from debt markets in the form of bonds.
3. Credit rating has regulatory importance also because if company is going for initial public offering than it is compulsory for it to get credit rating before issuing shares to public, so that investors know about the company before applying for the initial public offering.
4. Credit rating is also used by companies when they take loan from the banks or other financial institutions.
5. Credit rating is also used to judge about the overall operational efficiency and efficiency of the top management in running the business of a company.

Advantages of Online Banking

Online banking is the result of tremendous development which has taken place in the field of technology in the past few decades. Now almost every bank provides the facility of online banking to its customers. Given below are some of the advantages of online banking –

1. The first and foremost advantage of it is the ease and convince which it gives to the customers, one can transect from anywhere in the world without visiting the bank premises.
2. In this age where everyone is in a hurry it has become a necessity rather than a luxury because no one wants to waste his or her time standing in a queue to pay bills or deposit cash into the bank.
3. It is more cost efficient for both bank as well as customers, because banks have to deploy less staff and customers also get this facility without any extra charge.
4. One can check his or her account statement anytime which helps the customers in knowing the exact amount of money which he or she has in account and therefore can plan their expenses accordingly.
5. One can keep watch himself or herself on the account and therefore one can keep a close watch over the transactions which in turn can help in averting any fraud which is not possible in case of normal banking where if you have to see transactions you have to go to bank which can be a cumbersome task.

How to Deposit a Cheque

Depositing a cheque can be a problem if one does not have any idea how to deposit a cheque in the bank. It is simple to deposit a cheque in the bank, one has to fill up pay in slip in which details of cheque such as name of the account holder, name of the branch, cheque number, date of the cheque, amount etc are to be filled up. Once you have filled all the details than you can deposit a cheque in the bank.  There are 4 ways of depositing a cheque -

1. One can personally deposit the cheque on banks counter and obtain receipt on counterfoil of pay in slip.
2. The cheque can be dropped in the drop box which is available at all branches at the entrance of branch of bank.
3. Cheque can also be deposited in ATM of the concerned bank where also drop box facility is available.
4. One can send the cheque through post to concerned bank also.

Full Form of ICICI

ICICI is the Indian private sector bank which provides diversified financial services like banking, insurance, stock broking, mutual funds and so on. Full form of ICICI is Industrial Credit and Investment Corporation of India; established in the year 1996 it has gone on to become the largest private sector bank of India. The bank has branch network across the breadth of the country and also has branches in many other countries of the world.