BANKING

BY:
AATHISH.A
CLASS 10
ACKNOWLEDGEMENT
I, AATHISH of class 10, am glad to present
my Mathematics project on the topic
Banking.
This topic was given by our respected
Mathematics teacher Mr.R.JEYAKUMAR. I
am grateful to him for giving us such an
interesting topic for our project.
I am also thankful to my parents and friends
who helped me in finalizing this project with
a limited time frame.

CONTENT
 INTRODUCTION
 TYPES OF BANK ACCOUNTS
 FIXED DEPOSIT ACCOUNT
 SAVING BANK DEPOSIT
ACCOUNT
 CURRENT DEPOSIT ACCOUNT
 RECURRING DEPOSIT ACCOUNT
 FLEXIBLE ACCOUNT
  JAN-DHAN ACCOUNT
 CALCULATION OF INTEREST
 IMPORTANCE OF BANKS
 CONCLUSION

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. 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.

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.
FIXED 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. The tenure of an FD can
vary from 7, 15 or 45 days to 1.5 years
and can be as high as 10years.
 DICGC guarantees amount up to 100000
per deposit or per bank. They also offer
income tax and wealth tax benefits.

SAVING 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.

Generally, current account holders do not

get any interest on their balance lying in
current account with the bank. Current
account holder gets 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.

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.
`
CALCULATION OF INTEREST
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.
IMPORTANCE OF BANKS
A well-functioning financial system is
fundamental to a modern economy, and
banks perform important functions for
society. They must therefore be secure.
Banks should be able to lend money to
consumers and businesses in both
upturns and downturns. In addition,
payments for goods and services should
be processed swiftly, safely and at low
cost.
If banks fail to perform these tasks, the
consequences for the entire economy
could quickly become so wide-reaching
that even the banking system would be
exposed to large shocks.
It is therefore important that banks are
able to absorb losses and meet their
current payment obligations.
To ensure this, banks must comply with
strict regulatory requirements. Among
these are the capital and liquidity (money
that can be paid on short notice)
requirements applying to banks in order to
ensure that they can meet their current
payment obligations.
The banks’ own payment systems are
also required to be secure and efficient.

.
Conclusion
The Banking System a Database Project
system is more efficient, fast, reliable,
user friendly. Over and above the
proposed system does not have any
possibility of data loss during processing.
Banks play very important roles in the
economic development of nations as they,
to a large extent, wield control over the
supply of money in circulation and are the
main stimuli of economic progress.
Economic development is a dynamic and
continuous process which is highly
dependent upon the mobilization of
resources, investment, and the
operational efficiency of the various
segments of the economy.