Financial Institutions functions
Define each function and explain the differences.
Bank and Building Societies
- This is a form of saving account. The account holder receives interest on the money in the account. Interest on deposit accounts is subject to DIRT.
- Money can be withdrawn only through an ATM or "over the counter"
- Cehquebooks are not used.
Deposit account types:
- Deposit demand accounts. Money can be withdrawn at any time.
- Term or time deposit accounts. Notice must be given to the bank before a withdrawal.
Credit Union deposit account.
A regular share account, which receives a share of the profits earned by the credit union. DIRT is not charged.
A normal deposit account, which operates in the same manner as bank deposit accounts. Interest on these accounts are subject to DIRT.
An Post Saving Schemes:
Saving Certificates are for people who want to save a lump sum of money. These currently offer a 15% rate of interest over a period of five years and six months. The interest is tax free and it is state guaranteed.
Savings Bonds are for people who want to save a lump sum for a shorter period of time. These currently offer a 7% rate of interest over a period of three years that is tax free. The money is state guaranteed.
- Instalment Savings Agreement cater for people who want to save any regular amount between €25 and €1000 per month for a minimum of twelve months. The money is then left on deposit for a further five years and earns 17% tax free. If the money is withdrawn before the end of the term a lower rate of interest is applied.