also about savings bank a/c,fixed deposits and everything related to these like bank loans..
why does the bank ask 4 interest while repaying loans?
2007-02-27 01:59:43 · 8 answers · asked by Anonymous in Business & Finance ➔ Credit
what is the difference bw DD and cheque?
2007-02-27 02:01:07 · update #1
A bank or any lender wants interest on loans because that is what keeps them in business. If they did not have interest they would not make any money and in hand would not be able to pay people to keep there bank going. The difference between direct deposit and a check is that direct deposit is a wire transfer from one financial institution to another. This means you would be able to withdrawl the full amount of the check the day it is deposited because the wire is like cash. If you cash a check it usually takes 3 to 5 days for the check to clear.
2007-02-27 02:05:02 · answer #1 · answered by Shmesh 3 · 0⤊ 0⤋
I will answer just one or two... Why does the bank ask 4 int while repaying loans...Your loan installment is consist of the loan capital +interest
Ex.. Inst amount $500 ( capital-$400 + Interest $100)
So they cant demand for more than your monthly commitment unless you were unable to repay a number of intallments before...
Capital : The loan amout you have obtained
Are you clear about it>>>//
Savings a/c ; Bank pays you for your savings deposits if you own a savings account. interest is paid by the bank per annum..
Fixed Deposits: Bank pays you an attractive int for your fixed deposits may be matured in one month,3 months, 6 months, 12 months even to the extent upto 5 years.. ( namely short term fixed dep & Long term fixed deposits))
But if you are withdrawing cash before the maturity you are unable to get the full advantage of depositing your money under Fixed deposits...
You also can get loans against Savings acc & Fixed deposits up to a certain % not the 100%)vary from bank to bank... & conditions apply...
You have anywhere banking (ATMs), 24*7 banking,interenet banking , ,
2007-03-04 10:03:27 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Savings A/c to help you build up savings but interest is low.A/C is used for drawing small payments etc A Fixed Deposit is deposit kept with Bank or finance co for longer maturity as per the agreement .You may choose different periods and maximise your returns.
A cheque is an instrument drawn by the a/c holder either to withdraw money or make payment to a third party.A demand draft is an instrument drawn by a Banker payable to the named person but is drawn on the branch of the same bank
Stop payment of a cheque is possible but not that of a draft
2007-03-06 01:36:16 · answer #3 · answered by vnkulkarni2003 1 · 0⤊ 0⤋
Banking is set up to accept deposits and lend money to the general public. Deposits accepted are divided into savings, fixed etc depending on tenure they remain with the Bank. Savings is repayable anytime on demand. Fixed deposits are for a certain predefined and mutually agreed period.
Since a customer makes use of Banks money , he should pay a charge for utilising the same known as "interest" in the same way a bank pays interest to a depositor.
2007-02-27 10:09:48 · answer #4 · answered by Santosh 3 · 0⤊ 0⤋
You ask a lot there.
To learn about the US banking system, find an economics book on it. There are literlly hundreds.
As for why banks charge interest...three reasons:
1) It is a risk for them to loan you money (ie you may not pay it back) and to cover that risk they charge a premium...interest.
2) It is a profit stream from the impatient. If you aren't willing to save up enough cash to purchase the big ticket item, then you will pay the bank a premium to get the big ticket item now ie a loan. Note, this also encompasses number one above.
3) They can. If you want their money you will pay for it.
2007-02-27 10:09:25 · answer #5 · answered by jw 4 · 0⤊ 0⤋
By the way, DD stands for demand deposit. There is no difference between a demand deposit account and a checking account.
2007-03-06 19:10:19 · answer #6 · answered by khill 2 · 0⤊ 0⤋
hello friend,
at begining bank was started to collect funds from the wealthy persons and the bank will lend to person who requires money,
they will collect the deposit at lower interest and lend at higher interest. so the bank will get the profit by difference between deposit and credit
saving bank acc
it means you can deposit your own money at your own name as savings, for this acc bank will give some percentage of interest for balance in bank,
current acc
it means you can run this acc in companys name, bank dont provide any interest for balance in account.
fixed deposit or FD
it means you can deposit amount for fixed days for fixed interest.
bank is asking to pay interest to get their profit , and to pay interest to their deposit holders
2007-02-27 12:33:37 · answer #7 · answered by thiyanes 2 · 0⤊ 0⤋
Look it up, it's too much information to say in an answer
2007-03-06 16:58:12 · answer #8 · answered by Anonymous · 0⤊ 0⤋