Important Financial Terms that Every Banker Should Know
Finance is a vast subject, which is why it has a number of terminologies. However, there are some that are commonly used. These are:
Prime Lending Rate
It’s the minimum short-term interest rate that commercial banks offer to their most loyal and creditworthy clients.
Asset Management Company
An asset management company (AMC) invests its clients’ pooled funds in securities in a way that it meets the declared financial objectives. In this way, they are able to enjoy more investment options and higher diversification than they could on their own.
Pension plans, mutual funds, etc. are all run by AMCs.
AMCs generate revenue by charging a fee to their clients for their services.
Banking Ombudsman is a semi-judicial authority which comes under India’s Banking Ombudsman Scheme 2006. It was set up to act as a middleman between the customers and the banking system. So, if a customer is not able to get a satisfactory response to their complaint from their bank, they can approach the Banking Ombudsman for justice.
Types of Accounts
The following are the various types of accounts an individual can have with a bank:
- Demat Account: This is an account an investor has to open when registering with an investment broker.
- NOSTRO Account: It’s a bank account that’s held by a UK bank with a foreign bank.
- Current Account: It’s a bank account that deals with frequent deposits and cheque-based withdrawals. There is no limit on the number of transactions. However, the account doesn’t earn any interest either.
- Savings Account: It’s the most common type of bank account that’s used opened by individuals. Although it doesn’t offer high fluidity like a current account, it offers a modest interest rate.
- Fixed Deposit Account: It’s a financial instrument offered by the banks under which an investor can enjoy a higher interest rate than a normal savings account by locking a certain sum for a fixed duration.