Banking Operations: Accounts, Credits, Debits & More

Concept and Classification of Banking Operations

Banking operations are credit operations carried out by a financial institution in a professional manner. They are classified as:

• Passive Operations
• Active Operations
• Service Operations

Types of Banking Products

Common banking products include current accounts, savings accounts, fixed-term deposits, and certificates of deposit.

Characteristics of Opening Bank Accounts

Bank accounts can be opened by individuals or corporations and can be in domestic or foreign currency. Only individuals with the capacity to act can open an account. Those lacking capacity must do so through their legal representatives.

Who Can Open a Bank Account?

People with legal capacity can open a bank account.

Steps in the Process of Opening an Account

• Open request
• Signature roster
• Bastanteos
• Initial entry in the account
• Delivery of documentation

Types of Accounts According to Their Ownership

Accounts are classified as:

• Individual Accounts: Held in the name of one person, who is the sole owner and holder, providing their own funds.
• Group Accounts: Held in the name of two or more people, with all being owners and holders. These are further divided into:
  • Indistinct: Any owner may dispose of the funds with only one signature required.
  • Joint or Common: Require the signatures of all owners to dispose of the funds.

Concept of Credits and Debits

Credits: Annotations to the credit of the account, arising from transactions that benefit the client, such as cash deposits, bank transfers, etc.

Debits: Annotations to the debit of the account, for operations against the client, such as withdrawals, payments, receipts, etc.

Definition of Income or Taxation and Reimbursement

Income or Taxation: Cash deliveries made by the owner to be paid directly into their account.

Reimbursement: Cash withdrawals or checks made by the holder and are payable directly to their account.

Concept of Red Numbers and Account Balance

Red Numbers: This term is used when an account has a debit balance or is overdrawn, and also when there are losses.

Balance: The amount that results from the credits and debits in an account. It can be positive or negative.

Canceling a Bank Account

What Does It Mean and When and How Can You Cancel an Account?

Canceling a bank account means discontinuing the relationship between the bank and the client. It can be canceled in case of death of the individual owner, corporate dissolution of the account holder, or bankruptcy. Bank account contracts are typically of indefinite duration.

What is Liquidating a Bank Account?

Liquidating a bank account involves calculating the interest based on the credits and debits during the liquidation period.

Definition of Current Account in Sight

A current account in sight is a money deposit contract between a bank and an individual or company. The account holder deposits funds, and the bank is obligated to safeguard them.

Current Account Features in Sight

• Ready availability of funds without prior notice to the bank.
• Provision typically orchestrated by check.
• Payment or return on capital in the form of low-rate interest.
• Operations are recorded in bank statements.

Definition of Savings Account to View

Savings accounts are designed to capture and channel the savings of citizens and families.

Features of Savings Accounts in Sight

• Only requires recording taxation and rebates.
• 30-day notice may be required for large withdrawals.
• Higher interest rates than current accounts.
• Fortnightly valuation of interest.

Types of Savings Accounts

• High pay
• Housing
• For companies
• For children
• For young people
• For university

Definition of Fixed-Term Deposits

A fixed-term deposit is a money deposit that is not available until the expiration of a set term. The interest rate is typically higher than that of deposit accounts.

Definition of Certificate of Deposit

A certificate of deposit is a formalized fixed-term deposit receipt that can be transferred by endorsement at any time.