Types of bank accounts. Image credit bet.com

Types of bank accounts. Image credit bet.com

ZIMSEC O Level Commerce Notes: Money and Banking: Types of Bank Accounts

Savings accounts

  • Are used to keep the customer’s money safe.
  • Are suitable for small saves with regular incomes.
  • Have a low opening and minimum balance usually $0.
  • Withdrawals are on demand.
  • Cash can be obtained through the ATM or by filling out a withdrawal slip.
  • Deposits are made by filling deposits slips.
  • Customers are required to fill forms in order to open an account and to present identification documents as well.

Deposit Account

  • Keeps money not wanted for immediate use.
  • Higher interest is paid on monies held in these account.
  • Interest is dependant on the amounts deposited.
  • Withdrawals require 7 days notice.
  • No ledger fees are charged on these accounts.

Fixed Deposits Accounts

  • There is a set minimum deposit amount.
  • Deposit are held for a fixed period of 1 to 12 months.
  • The customer is not expected to make a withdrawal until this period has lapsed.
  • The interest payable on the deposit is fixed for the entire period under which the deposit is held.
  • These accounts earn a higher interest rate.

Budget account

  • A customer adds up all his/her bills for the whole year.
  • The total is then divided by 12 (months) to get the cost of bills for each month.
  • At the end of every month one twelfth of the bill’s annual total is transferred from the customer’s current account to his budget account.
  • Some banks issue special cheque books for budget accounts.
  • The customer uses the budget account cheques to pay their monthly bills.

Current Account

  • Opened by both businesses and ordinary people.
  • Allows customers to use cheques when making payments.
  • Current account holders do not need to carry cash around.
  • Account holders can make and receive stop orders, credit transfers or direct debits.
  • Cheques may be used as receipts for payments made.
  • Account holders have access to overdraft facilities.
  • Interest is received on credit balances.
  • Banks send statements on a regular basis to account holders.
  • Bak offers trade references to account holders.
  • Account holders are provided with night safe facilities

To access more topics go to the Commerce Notes page.