William Bransah
School of finance & Financial Management | Business University of Costa Rica
Abstract
Deposits can be divided into two types. The first type is time deposits in which an account holder gives the bank money for a fixed period of time and therefore does not have any right to ask for money before the maturity date has been reached. On the other hand, there are certain types of deposits that a bank holds for which there is no maturity date. These are the types of deposits that can be withdrawn when required almost instantaneously. These deposits are called demand deposits and form a significant portion of the deposits that are held by a bank. Since these deposits are by definition unstable, the pose some very peculiar risks to the banks operations. In the studied that there are two types of deposits that banks use to fund their lending operations. I studied in detail about the different types of demand deposits. However, demand deposits are considered to be vulnerable sources of finance. Depositors are likely to pull out the funds that form a part of demand deposits at the slightest sign of trouble. To the contrary time deposits form a more stable source of funds. They form the solid foundation based on which banks can continue their lending operations. In this article, I will study about the various types of time deposits products that are offered by banks to their depositors.
Keywords: Retail Banking, Demand Deposit Product, Time Deposit Product, Economic management, Development Economics
