ZIMSEC O Level Commerce Notes: Money and Banking: POSB Bank.

Post Office Savings Banks

  • People’s Own Savings Bank.

Functions

  • It accept deposits from individuals and companies.
  • It operates savings accounts which earn tax free interest.
  • It operates stop order facilities for clients.
  • It lends money to large organisations for example Discount Houses.
  • It invests money into Treasury Bills and municipal stocks.
  • It issues cheques upon request.
  • It provides ATMs (Automated Teller Machines).
  • It provides money orders and postal orders.

Money Order

  • A means of payment suitable for paying large amounts.
  • The sender fills in ink the amount to be sent.
  • He/she states the name of the payee.
  • The sender is given a certificate as a proof of postage.
  • Money is paid at the sender’s post office.
  • Money is transferred to the payee’s nearest Post Office for payment.
  • The payee is paid at his/her local Post Office upon his/her identity being verified.
  • They can be crossed for security purposes.
  • They are a safe way of sending Money.
  • They are valid for 12 months from the date of issue.

Postal orders

  • They are suitable for sending small amounts of money through the Post Office.
  • These documents are issued in lieu of cash.
  • They are printed in fixed denominations.
  • The sender buys the denomination equivalent to the money to be sent.
  • The sender then fills in the payee’s name and posts the order to him/her.
  • Upon receiving the Postal Order, the payee takes the postal order to the named Post Office and cashes it by signing.
  • If it is crossed, the payee will have to deposit it into a bank account.

To learn more about other financial institutions go to this page.

To access more topics go to the Commerce Notes page.

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