Commercial Bank Facilities
Current Accounts
Current accounts can be used by anyone provided they can supply a reference or references. The advantages of the account include cheque payments if there are funds in the account.
Among banking instruments there are bank cards which also act as cheque cards allowing money to be drawn from cash dispensers or ATMs even when the bank is closed.
Although cheques can be drawn immediately, they will take three working days before the amount is debited or credited to the account.
When depositing cash or cheques, a paying- in slip is used to record the deposit, the counterfoil with the bank’s stamp and cashier’s initials being proof that the deposit was made.
It is possible to overdraw an account, i.e. take out more money than there is in credit, but this can be only done with the bank’s manager’s agreement, otherwise the customer’s cheque may not be honoured. However many banks offer special current accounts where overdraft facilities are automatically included, for an extra charge.
As a rule, interest is not paid on current accounts. Credit balances and charges are made for transactions. However, there are special current accounts which have certain requirements, e.g. a minimum balance, which offers interest. Many firms have more than one current account, e.g. N1 account for paying wages and overheads and N2 accounts for paying suppliers.
Deposit Accounts
Deposit accounts do pay interest to a maximum established by the bank, but the customer can be asked to give notice of withdrawal, and can only withdraw on a withdrawal slip handed in at the branch where the account is kept. No chequebook is supplied, and there are no overdraft facilities.
Banks offer various types of other accounts, e.g. a budget account, where the bank will pay a customer’s bill spread over a twelve –month period. And there are numerous savings accounts on which interest is paid according to the credit balance of the account and the period that is left for. With some of these accounts there are penalties for withdrawing money before the agreed date.
Account Statements
Banks will normally give statements to both deposit and current holders about once every three months, or more frequently if required by the account holders. Statements give a detailed account, on a day-to-day basis, of all money and cheques will have either been paid into account or withdrawn from the account.
Credit Cards
Credit cards offer credit facilities to customers making purchases in shops, and for a basic charge plus interest, calculated monthly, the customer can buy goods up to a limit on most cards. Visa, Mastercard and others are internationally recognized and act as a cheque and cash card and can be used for automatic debiting when a customer pays for goods in a shop or effects other payments.
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