MATHS PROJECT 10 GRADE

SYNA SHAH
27

10 F

BANKING

BONAFIED CERTIFICATE

PG.NO CONTENT

4 INTRODUCTION

5-11 TYPES OF BANK ACCOUNTS:

1. FIXED OR TIME DEPOSIT ACCOUNT
2. SAVING BANK DEPOSIT ACCOUNT
3. CURRENT DEPOSIT ACCOUNT
4. RECURRING DEPOSIT ACCOUNT
5. FLEXIBLE ACCOUNT
6. JAN-DHAN ACCOUNT

13 PREVAILING RATE OF INTREST BY STATE BANK OF
INDIA

13 PREVAILING RATE OF INTREST BY PUNJAB
NATIONAL BANK

14 CALCULATION OF INTREST

15 RECURRING BANK QUESTIONS

16 COMPARISION BETWEEN FD AND RD

17 BIBLOGRAPHY

INTRODUCTION:

What is banking?

Banking is an industry that handles cash, credit, and
other financial transactions. Banks provide a safe
place to store extra cash and credit. They offer savings
accounts, certificates of deposit, and checking
accounts. Banks use these deposits to make loans.
These loans include home mortgages, business loans,
and car loans.

How does it work?

Banks are a safe place to deposit excess cash.
The Federal Deposit Insurance Corporation (FDIC)
insures them.1 Banks also pay savers a small percent
of the deposited amount based on an interest rate.
Banks are currently not required to keep any percentage
of each deposit on hand, though the Federal Reserve can
change this. That regulation is called the reserve
requirement. They make money by charging higher
interest rates on their loans than they pay for
deposits.2

TYPES OF BANK ACCOUNTS

Traditionally banks in India have four types of deposit
accounts, namely Current Accounts, Saving Banking
Accounts, Recurring Deposits and, Fixed Deposits.
However, in recent years, due to ever increasing
competition, some banks have introduced new products,
which combine the features of above two or more types
of deposit accounts. These are known by different
names in different banks, e.g 2-in-1 deposits, Smart
Deposits, Power Saving Deposits, Automatic Sweep
Deposits etc. However, these have not been very
popular among the public.

1. FIXED OR TIME DEPOSIT ACCOUNT
2. SAVING BANK DEPOSIT ACCOUNT
3. CURRENT DEPOSIT ACCOUNT
4. RECURRING DEPOSIT ACCOUNT
5. FLEXIBLE ACCOUNT
6. JAN-DHAN ACCOUNT

FIXED DEPOSIT OR TIME DEPOSIT ACCOUNT:

A fixed deposit (FD) is a financial
instrument provided by banks or NBFCs which
provides investors a higher rate of interest than a
regular savings account, until the given maturity
date. It is known as a term deposit or time deposit
in Canada, Australia, New Zealand, India and The
United States, and as a bond in the United Kingdom
The interest rate varies between 4 and 7.50
percent.[1] The tenure of an FD can vary from 7, 15
or 45 days to 1.5 years and can be as high as 10
years.DICGC guarantees amount up to ₹100000 per
depositor per bank.They also offer income
tax and wealth tax benefits.

SAVING BANK DEPOSIT ACCOUNT:

A savings account is an interest-bearing deposit
account held at a bank or other financial institution.
Though these accounts typically pay a modest interest
rate, their safety and reliability make them a great
option for parking cash you want available for
short-term needs. Savings accounts have some
limitations on how often you can withdraw funds, but
generally offer exceptional flexibility that’s ideal
for building an emergency fund, saving for a
short-term goal like buying a car or going on vacation,
or simply sweeping surplus cash you don’t need in your
checking account so it can earn more interest
elsewhere.

CURRENT DEPOSIT ACCOUNT:

Current bank account is opened by businessmen who have
a higher number of regular transactions with the bank.
It includes deposits, withdrawals, and contra
transactions. It is also known as Demand Deposit
Account.Current account can be opened in co-operative
bank and commercial bank. In current account, amount
can be deposited and withdrawn at any time without
giving any notice. It is also suitable for making
payments to creditors by using cheques. Cheques
received from customers can be deposited in this
account for collection.In India, current account can
be opened by depositing Rs.5000 to Rs. 25,000. The
customers are allowed to withdraw the amount with
cheques, and they usually do not get any interest.
Generally, current account holders do not get any
interest on their balance lying in current account with
the bank.Current account holder get one important
advantage of overdraft facility.

RECURRING DEPOSIT ACCOUNT:

A recurring deposit is a special kind of term
deposit offered by banks which help people with
regular incomes to deposit a fixed amount every month
into their recurring deposit account and earn interest
at the rate applicable to fixed deposits. It is
similar to making fixed deposits of a certain amount
in monthly installments. This deposit matures on a
specific date in the future along with all the deposits
made every month. Recurring deposit schemes allow
customers an opportunity to build up their savings
through regular monthly deposits of a fixed sum over
a fixed period of time. The minimum period of a
recurring deposit is six months and the maximum is ten
years. The recurring deposit can be funded by standing
instructions which are the instructions by the
customer to the bank to withdraw a certain sum of money
from his savings/current account and credit to the
recurring deposit account.

FLEXIBLE ACCOUNT:

A flexible spending account (FSA), also known as a
flexible spending arrangement, is one of a number of
tax-advantaged financial accounts, resulting in
payroll tax savings.[1] Before the Patient Protection
and Affordable Care Act (PPACA), one significant
disadvantage to using an FSA was that funds not used
by the end of the plan year were forfeited to the
employer, known as the "use it or lose it" rule. Under
the terms of the Affordable Care Act, a plan may permit
an employee to carry over up to $500 into the following
year without losing the funds. The most common type of
flexible spending account, the medical expense FSA,
is similar to a health savings account (HSA) or a
health reimbursement account (HRA). However, while
HSAs and HRAs are almost exclusively used as components
of a consumer-driven health care plan, medical FSAs
are commonly offered with more traditional health plans
as well.

JAN-DHAN ACCOUNT:

Pradhan Mantri Jan Dhan Yojana is a financial inclusion
program of the Government of India open to Indian
citizens (minors of age 10 and older can also open an
account with a guardian to manage it), that aims to
expand affordable access to financial services such as
bank accounts, remittances, credit, insurance and
pensions. This financial inclusion campaign was
launched by the Prime Minister of India Narendra Modi
on 28 August 2014. He had announced this scheme on his
first Independence Day speech on 15 August 2014. Run
by Department of Financial Services, Ministry of
Finance, under this scheme 15 million bank accounts
were opened on inauguration day.The Guinness Book of
World Records recognized this achievement, stating:
"The most bank accounts opened in one week as a part
of the financial inclusion campaign is 18,096,130 and
was achieved by the Government of India from August 23
to 29, 2014".By 27 June 2018, over 318 million bank
accounts were opened and over ₹792 billion were
deposited under the scheme.

`

PREVAILING RATE OF PREVAILING RATE OF INTREST

INTREST BY STATE BANK OF BY PUNJAB NATIONAL BANK:

INDIA:

Tenure FD Rates

Tenure FD 7 days to 14 days 3.00%
Rates

7 days – 45 4.50% 15 days to 29 3.00%
days days 3.00%
3.25%
46 days – 179 5.50% 30 days to 45 4.00%
days days 4.40%
4.50%
180 days – 5.80% 46 days to 90 4.50%
210 days days

211 days – 5.80% 91 days to 179
364 days days

180 days to 270
days

271 days to 364
days

333 days

444 days 5.25%

1 year – 1 6.10% 555 days 5.25%
year 364 days

1 year 5.25%

2 years – 2 6.10% 1 year 1 day to 2 5.25%
years 364 6.10% years
days
2 years 1 day to 3 5.25%
3 years – 4 years
years 364
days

CALCULATION OF INTREST:

IF WE INVEST 10000 FOR 8%P.A. FOR 5 YEARS, THEN WE
CALCULATE INTREST AS: PRT/100
THIS IS FOR SAVINGS ACCOUNT
FOR A RECURRING ACCOUNT, WE CALCULATE INTEREST AS,
I=(x*n(n+1)*R)/(2*12*100)
‘x’STANDS FOR THE MONTHLY INVESTMENT
‘n’STANDS FOR THE TENURE
‘R’STANDS FOR THE RATE OF INTEREST

CALCULATION 1
X=240
N=15 MONTHS
MATURITY VALUE=3840
I=(X*N(N+1)*R)/2*12*100
I=(40*15(15+1)*R)/2*12*100
I=(240*15*16*R)/2*12*100
I=24R
MATURITY VALUE=NX+I
3840=(15*240)+24R
3840=3600+24R
3840-3600=24R
240=24R
R=240/24
R=10%

CALCULATION 2
M.V=7875
R=9%P.A
T= 2 YEARS= 24 MONTHS
I= P*(N+1)/2*12*(R/100)
= P*(24*25/2*12)*(9/100)
= 9P/4
M.V=P*N+I
7875=(24P/4)+(9P/4)
7875=(96P/4)+(9P/4)
7875=(96P+9P)/4
31500=105P
P=31500/105
P=300

COMPARISION

FD ACCOUNT
P=60000
T=1 YEAR
R=10% p.a.

I= PRT/100
I=(60000*10*1)/100
I=6000

AMOUNT= 60000+6000
= 66000

RD ACCOUNT
x= 5000
n= 1 year= 12 months
r=10% p.a.
I= (x*x(n+1)*R)/2*12*100
I= 5000*12(12+1)*10/2*12*100
I= 5000*12*13*10/2*12*100
I= 3250

MATURITY VALUE= nx+I
=(12*5000)+3250
= 60000+3250
= 63250

BIBLOGRAPHY

https://www.google.com/search?q=types+of+bank+accounts+in+india&oq=TY
PES+OF+BANK+ACCOUNTS&aqs=chrome.0.69i59j69i57j0l6.8294j1j7&sourceid=c
hrome&ie=UTF-8
https://www.google.com/search?q=fixed+or+time+deposit+account&oq=FIXE
D+OR+TIME+DEPOSIT+ACCOUNT&aqs=chrome.0.0l8.10439j1j7&sourceid=chrome&
ie=UTF-8
https://www.google.com/search?q=SAVING+BANK+DEPOSIT+ACCOUNT&oq=SAVING
+BANK+DEPOSIT+ACCOUNT&aqs=chrome..69i57j69i60.8845j1j7&sourceid=chrom
e&ie=UTF-8
https://www.google.com/search?q=current+deposit+account&oq=CURRENT+DE
POSIT+account&aqs=chrome.0.0l7j69i60.6110j1j7&sourceid=chrome&ie=UTF-
8
https://www.google.com/search?q=recurring+deposit+account&oq=RECURRIN
G+DEPOSIT+ACCOUNT&aqs=chrome.0.0l7j69i60.743j0j7&sourceid=chrome&ie=U
TF-8
https://www.google.com/search?q=flexible+account&oq=FLEXIBLE&aqs=chro
me.1.69i57j0l7.3564j1j7&sourceid=chrome&ie=UTF-8
https://www.google.com/search?sxsrf=ALeKk01mvpMLPJqDe4zxzeYz8t7GWDeWN
g%3A1599112245039&ei=NYRQX4aLAseQ4-EP-fmosA8&q=jan+dhan+account+means
&oq=jan+dhan+account&gs_lcp=CgZwc3ktYWIQARgBMgQIABBHMgQIABBHMgQIABBHM
gQIABBHMgQIABBHMgQIABBHMgQIABBHMgQIABBHUABYAGDgrgNoAHABeACAAQCIAQCSAQ
CYAQCqAQdnd3Mtd2l6wAEB&sclient=psy-ab
https://groww.in/p/fixed-deposit/sbi-fd-interest-rates/
https://www.myloancare.in/fixed-deposit/fd-interest-rates/pnb