In the finance language world over, bank deposits are a fundamental way money moves through an economy. A bank deposit is the placement of funds in an account with a bank.
Some bank deposits at commercial banks (demand deposits) are part of the M1 money supply (a country’s physical currency plus demand deposits and other liquid assets held by the central bank and calculated by it.
There are two types of bank deposits: demand deposits and times deposits. Demand deposits are the placement of funds into an account that allows the depositor to withdraw his or her money from the account without warning or with less than seven days’ notice.
Checking accounts are demand deposits. They allow the depositor to withdraw funds at any time, and there is no limit to the number of transactions a depositor can have on these accounts (although this does not mean that the bank can not charge a fee for each transaction).
In banking terms, savings accounts are time deposits, meaning a bank can require the account holder to give notice before withdrawing the funds or impose a penalty for withdrawal before a specified date.
Although banks do many things, their primary role is to take in funds–called deposits–from those with money, pool them and lend them to those who need funds.
Since banks are intermediaries between depositors and borrowers, the amount banks pay for deposits and the income they receive on their loans are both called interest.
In banking, depositors can be individuals and households, financial and nonfinancial firms, or national and local governments. Deposits can be available on-demand or with some restrictions such as savings and time deposits.
Banks pay depositors less interest than they receive from borrowers. That difference accounts for the bulk of banks’ income in most countries.
The financial result of 2019 reveals that customer deposits increased from Shs19.6 trillion in December 2018 to Shs23.2 trillion in December 2019.
Uganda Bankers Association (UBA) said during the year 2019, the shillings deposits stood at 14.2 trillion (62.8per cent) while foreign exchange (FX) deposits were recorded at Shs8.7 trillion (37.2%)."Growth in the total number of accounts was recorded at 15.4m as at December 2019 compared to 12.17m as at December 2018, representing a 21 per cent growth," UBA said.The former UBA chairman, Mr Partick Mweheire said the growth of access channels, specifically, agent banking points across the country increased to 12,154 by end of December 2019.In the previous years, the […]