REASONS WHY BANKS WON’T HONOUR YOUR CHEQUE

A cheque is a written document instructing a bank to debit your account and pay someone. While writing a cheque is quite simple, cashing a cheque can sometime be a nightmare. This write up provide the following as as some of the reasons why a bank will not honour your cheque.

·         You don’t have means of identification (valid I.D Card); Banks have to protect themselves against cheque fraud. Without proper proof of identity, banks can refuse to honour a cheque writing in your name. Always carry valid means of identification such as driving license, national i.d card, passport or voter’s card, when cashing a cheque.

·         Cheque conversion; Bank will not honour a cheque presented by a wrong person. Ensure that the payee on the cheque is the same person that presents it at the counter or the same as the name on the cheque deposit slip. The payee must be the owner of the account into which the cheque is paid. Where the payee is different from the account owner, a proper endorsement must be obtained.

·         The bank branch can’t handle a large transaction without prior notice. Not all banks can handle large cash transactions without prior notice. Smaller branch of a Bank may not have all the necessary cash to clear a very large cheque. Some branches are so small that they cannot keep cash above their limit.  When you have a cheque for a very large amount, call the Manager of the bank branch you intend to visit in advance. The bank Manager can give you proper advice.

·         Stale Cheque. The life span of a cheque is six month from the date it is drawn. If you wait too long to cash a cheque and it is over six months old, a bank can refuse to pay it. Some banks may decide to pay it anyway as a favour to long-time customers, but it is at the discretion of the bank.

·         Crossing a cheque. When two transverse lines are drawn across the face of a cheque with or without the word & co. the cheque has been ‘crossed’. For any crossed cheque to be paid across the counter it must be opened by counter signature across the traverse lines. A bank can dishonor your cheque if it is crossed.

·         Drawer attention requires. A cheque issued to a third party may not be paid by bank if the amount in words and figures are not correct and the same. If the cheque is not sign by drawer or if there is any alteration.

·         Other reasons are; cheque not dated, cheque not properly drawn and if there is notice of drawer’s bankruptcy or liquidation.

FINANCIAL PLANINIG, ANOTHER WAY TO MANAGE YOUR EXPENSES

Money is difficult to earn but it can also speedily disappear if expenses are not managed wisely.

For people who are living independently for the first time, the responsibility of paying for their utilities aside their personal expenses can be burdensome if not managed appropriately.

Professional say the effect of inadequate financial planning may not be felt immediately, but later when there is no steady source of income. They note that understanding how to manage finance will not only help people out personally, but can be of benefit when it comes to business success as well.

A proper financial understanding, according to expert, also helps in setting goal as well as creating fundamental skills in planning and decision making.

Learn financial management.

Every business owner must have at click of mouse, his company’s key financial data such as value of receivable, current inventory level, monthly revenue, monthly profitability, business net asset and balance sheet among others. He says if you are a business owner and you cannot provide these data about your company in minutes, then you have some work to do. ‘Even if you decide to employ an Accountant or Outsource the finance function, it is still essential for business owner to have fair knowledge of finance.’

Stick to your budget

Expert says budgeting is a means of balancing expenses with income. To make it work, they advise that a realistic budget should be developed. According to them, budgeting can be best achieved by tracking how well it is being adhered to each month, which means a continuous tracking of your monthly expenses, coupled with your day- to-day spending.

As part of an effort to adhere strictly to the budget, they advise that people should think in term of their overall accomplishment rather than something that will give them temporary satisfaction.

Control impulsive spending

Impulsive spending according to experts is an act of spending money on items that were not in the original budget. Experts say people who are in the habit of overspending on items or making late payment for the items bought, frequently borrow money from friends and buy things they don’t really need.

Financial advisors also say stress often leads to impulsive spending. Therefore, they recommend ways of reducing stress as a remedy to impulsive spending.

Have an emergency fund.

A specific amount should be set aside for emergency situations because it is when unforeseen expenses or emergencies arise that people tend to spend out of their budget. This can be inform of budget out of  the monthly paycheck for deposit into a savings account, ideally at least 10 percent of each month wages, including extra money earned.

The advantages of doing this is to prevent the necessity of going into debit, it provide peace of mind and freedom of choice.

Explore insurance policies.

Insurance is an important tool for protecting against financial hardships, and the premium paid maybe one of the top household expenses. Interested parties should seek a provider to be sure  they have the appropriate level of protection- that way they will prevent exorbitant payment for coverage. Insurance policies include life and non life insurance. The details of these policies will be discussed in my subsequent posts.

Have a retirement plan.

Having a solid retirement plan, can erase worries and fear related to old age, and keep people in control of their life and their finances. They say it is an act of preparing now in order to enjoy later.

The retirement plan should include social security, medical insurance, pension scheme and good life style choice.

WHY YOU NEED FIXED DEPOSIT

In my last write up, I made comparison between Fixed Deposit and Treasury bills. Though I am yet to receive any comment or question on the post but today I want to explain further why you need fixed deposit account.

 Not too many bank customers have a fixed deposit account. As a matter of fact many people only heard of the fixed deposit account when they were in secondary school. Study have shown that over 75 percent of bank customers operate savings and current accounts, while only about 25 percent do fixed deposit. This implies that so many bank customers are missing out on the benefits of fixed deposit accounts. This is because a fixed deposit account is more of an investment than just running a bank account.

To start with, a fixed deposit account is a financial instrument where an investor gives a certain sum of money to a bank or financial institution and the entity pays interest for the duration of the deposit. A fixed deposit account is an account in which the money is deposited in the beginning of the period and interest is accrued on it, credited and redeemed after the completion of the said period.

It is similar to a savings account. It is a very simple account in which the account holder needs to only invest money one time and get returns for what the account has been opened for. The rate of interest paid varies depending on the amount and tenure. Investors, especially conservative investors, prefer to open fixed deposit accounts as it is a safe investment option and it can be opened easily and quickly.

Encourage savings habit

Fixed deposit accounts require you to keep an amount for a certain period to accumulate the agree interest amount. This encourages a savings habit by an individual, as he will not be tempted to spend the money and find a way to manage his finance more efficiently.

Higher rate of return

The interest rates offers on fixed deposits are higher than that on savings accounts. It is also a safe form of investment where returns are guaranteed.

Guaranteed returns

Unlike investment in stock market or commodity market, fixed deposit are not risky investments as they do not depend on fluctuating market rates. Investors can rest assured that their investments are safe and they will be getting back a guaranteed amount at the end of the investment.

It can be withdrawn easily.

The amount that invested in a fixed deposit account can be withdrawn at any time for small penalty. The investor may have a financial emergency to meet like marriages, illness or when his business is in a loss. The penalty is less than that of selling stocks or real estate as the asset cannot be sold easily because of its high value and if you are in a distressed situation, you will sell it for a much lower rate. Whereas, fixed deposit can be withdrawn at any time and all you lose is a certain interest income.

Flexible in nature

Fixed deposit accounts can be taking for a tenure of one month, three months, six months , one year, two years or even ten years based on your requirement and for whatever amount that you can invest. Fixed deposits can be invested for tenure of your choice. If you have planned for a big event in five years, then you can have a fixed deposit kept for five years to meet your financial needs. You can have various fixed deposits accounts to save for different goals. Some banks provide flexible fixed deposit schemes.

Flexible interest rate pay-outs

Interest rate can be paid at different interval depending on the term you choose.

Disadvantages of fixed deposit accounts

·         Inflation rate of a country may affect return on fixed deposit account. As the price of products are increasing in the market, the inflation rate is also increasing, which does not support the increase in higher interest rates.

·         In most countries, the taxation on fixed account is done as normal taxation and no other benefits are allowed.

·         The benefit of diversification is not available as all the money is invested in one account only, ruling out opportunity to invest in stock market or other instruments.

                                                                                                  

GETTING PERSONAL LOAN FROM YOUR BANK.

You may want to start a home business, or you may want to borrow for a vacation, or you may have some other use for the money. Whatever the reason is, getting a personal loan can give you the money you need. A personal loan, usually unsecured, can provide you with a little extra cash to help you meet your goals.

Actually securing that personal loan can be a bit difficult though. Many people find the process scary, and they don’t know where to begin.

Here are few ways on how to get our personal loan approved.

·         Before you start your loan process, make sure you understand how personal loans work. There are two main type of personal loans; secured and unsecured. A secured loan will usually give you lower interest rates, but you have to put something up as collateral for the loan, which means that if you don’t pay back the loan, they take your collateral. Unsecured loan, don’t require any collateral, but will have higher interest rates.

·         Loan can only be taking on current account except on special consideration by the bank.

·         The other basic thing to know about personal loan is what you will need to get one. The information you will need will vary depending on which technique you use to get loan.

·         You will also need your employment information like your work history and pay slip to verify your income. You will need to provide other source of income.

·         Depending on the loan type and loan amount, the lender may ask for other information and documents.

·         The interest rate on a personal loan at a bank that value you as a customer is usually quite low compare to the alternatives.

·         You must be operating your account for the period not less than six months, depending on your bank’s policy.

·         Your total account turnover within a stated period will determine the amount of money you are qualified to obtain as loan.

SALARY ADVANCE; THE PROCESS OF GETTING IT IN YOUR BANK.

Some banks allow some of their customers to obtain salary advance if their salaries are paid through the bank.

However bank will look at some things such as the kind of organization the individual customer works for and how regular the salary is paid. For a Government worker, the process of taking salary advance is easy as long as the account of the person is domicile to the bank. A customer can walk into the bank and asks for salary advance, but may need to approach his employer to know if he can get the loan request approved.

If you need a few extra naira for an unexpected emergency, there is one source you may not have considered: Your future salary. Depending on where you work, you may be able to get an advance on your salary. Since any loan is really borrowing on future money, this method simply cuts out an expensive middle man; the lender.

Organizations having policy on short-term loans are becoming more common. With salary advance you repay it either out of your next salary or over an agreed time span. Unlike other form of loans, this one requires permission from your employer. Some companies restrict the circumstances under which they will allow such. The most important thing for people to understand is these are real loans. Like a bank or card loan, they have to be paid back on schedule. It is not like borrowing from a friend or family member: saying ‘I will pay you when I can’.

If for whatever reason, you part way with your employer, you will be expected to repay the balance in full when you leave. Before you decide, ask if you need salary advance. Can I pay it back? And what in my financial situation is the real reason I am considering this? Before you take it find out if it is even an option where you work.

Some employers post their pay-advance guidelines on their sites. But if your employer does not, then your next step is the human resource department. Gather information without putting your boss or yourself on the sport before deciding if this is something you want. Expect a little paper work; like fill forms and signing document to acknowledge the loan, specifying the amount and the date you received it and spelling out the payback schedule.

In the event that you terminate your appointment with your employer, and have a severance package or back pay, an employer may simply deduct the reminder of the loan balance from that final cheque. Stick to repayment plan. Nothing will get you sideways with your employer faster than asking for an advance, not being able to pay back and asking for another advance. Send your comment and questions.

INVESTMENT; TREASURY BILLS OR FIXED DEPOSIT, WHICH IS BETTER?

Several people tend to be confused on which of the Investment (treasury bills or fixed deposit) to put their money for maximum interest. To answer the above question, while both are very good, ways to invest your money there have similarities and differences.

When you buy treasury bills you are basically lending money to the Government (through Central Bank of Nigeria) with promise to pay back over 91 days, 182 days or 364 days. With fixed deposit however, you are lending to a bank or investment house with a promise to repay you at the expiration of the tenor (usually between one to twelve months). So, if you do not like to lend money to the government then fixed deposit is better.

What is the risk?

Treasury Bills are backed by the full faith and credit of the government and as such they are seen as almost risk free because it is very unlikely that a government can go bankrupt and not able to pay its loans. Beside the government has a tax revenue stream it can use to repay its borrowings.  I have never heard the CBN defaulted.

Fixed deposit is backed by the credit rating of the bank. Unlike when you borrow from the bank, the bank does not give you any collateral when borrow from you. However, it is obligated to pay you your interest and Principal when it falls due. They can however default when it goes bust as we have seen over in the years past. When a bank fails, depositors may lose all or part of their money, including fixed deposits. If you are weary of the risk the Treasury bills is best for you.

Who gives a better interest rate?

The higher the risk the higher the reward is how financial markets play and as such one will expect Treasure bills rate to be lower than fixed deposit rates. However, other factors do come into play that makes it change. Currently, Treasure bills post a better rate than average fixed deposit in Nigeria despite the latter being the riskier of the two.

How do I get paid interest?

Some banks pay you interest at the end of the period along with the principal. Some also pay interest upfront depending on what you negotiate. Interest on Treasury bills are paid upfront only when the principal comes at the end of the Tenor.

Which one pays the most taxes?

Treasury bills are exempted from taxes, so taxes are not deducted from your interest payments. However, you are likely to pay a fee to the bank for rendering the service on your behalf. The fees are very small and almost negligible. Interest on fixed deposit attract withholding tax rate of 10 percent deductible at source by the banks and to be remitted to the relevant tax authority. If you don’t want to be taxed the treasure bills is it.

Can I roll over my investments (interest and principal)?

Fixed deposits can be rolled over by banks. You simply instruct your bank to roll over the interest and principal when its mature giving you the benefit of compounding interest. It’s also a default way of saving and investing all rolled up one. Treasury bills cannot be rolled over by default. Once the investment matures the CBN pays the money straight into your bank account.

If you are therefore looking for investment you can roll over with ease, I suggest you go for fixed deposit.

Can I get my cash anytime I want?

You can get your cash anytime you want with fixed deposits by liquidating your account ahead of its maturity. All you need to do is to tell your bankers or investment house that you wish to cash in on your deposits. They will however pay you interest for the period that the money was with them instead of the full tenor if you had waited till maturity. You may also incur an early withdrawal charge.

Treasury bills on the other hand are not flexible as fixed deposits. If you wish to cash in on your treasury bills ahead of its schedule tenor, you will have to sell the rights to the treasury bills to the bank or to a willing buyer. The buyer will deduct the portion of the interest remaining for the period between when you terminated the investment and when it matures from your principal.

Basically, you can collect your cash in both instances except that it is perhaps faster and easier with banks.

Can I use it as collateral?              

Treasury bills by their nature can be used as collateral to collect loan from a bank.  This is because it is seen as a near risk free as asset by lenders and is also quasi cash.

Fixed deposit can also be used as collateral however the credit rating of the bank that is holding the deposit may affect the strength of it in the eye of another lender. Some banks may not accept fixed deposit in another bank as full collateral because they don’t consider the bank a strong bank.

If you are looking for investment to use your money as cash collateral, then Treasury bills are more suitable.

Have you invested in either treasury bills or fixed deposits?  What is your experience? Send me your comment.

Tips for minimizing ATM cash dispense errors and protecting your debit cards

There are a number of ways customers can minimize the chances of encountering the ATM dispense error. While the ATM dispense errors are not 100 percent preventable, there a few guide that can help you minimize the rate at which you get caught. Below are some simple tips to do so:

·         Always use a bank’s payment card on its machine, except if absolutely impossible. This help minimize the chances of falling a victim to ATM dispense error.

·         Always check your account balance first before making withdrawals from the machine. This helps you to be aware of possible link problems.

·         Follow on screen instructions well as these will guide you properly.

·         Don’t rush to insert your payment card when you notice that the machine is experiencing network fluctuation on a particular machine.

·         It has been noticed that the ATM dispense error occurs when some ATM runs out of cash. Therefore you may sometimes need to ask bank security operatives which of the ATMs are dispensing cash among the one in the gallery.

·         Sometimes ATMs malfunction and the only way you can know is to ask the bank security personnel on guard.

Protecting your debit cards

Recent enhancements have put the Automated Teller Machine and debit cards in nearly everyone’s wallet. Today, most debit cards have the Visa or MasterCard logo and can be used at millions of locations with a personal identification number.

A purchase at many stores may be like a trip to the bank or the ATM, with PIN pads allowing consumers to make purchases. To avoid becoming a victim of debit card fraud, the following tips will assist you.

·         Check your bank statements immediately after every withdrawal or purchases. Make sure all payments are yours.

·         Periodically, check your account balance and transactions, by utilizing online banking, by telephone alert or by printing interim statements at the ATM.

·         Contact your bank immediately if your card is lost, stolen or subject to fraudulent use.

·         Keep a record of card numbers, PINs, expiration dates for bank so you can contact the issuing bank easily in case of theft.

·         Memorize your PIN. Do not use your date of birth, address, telephone number or social security number.

·         Never put your PIN number and Card together and do not make it available to others.

·         If your receipts have your account number, tear it up or shred it before throwing it away.

·         Knowing your limits. Many banks limit daily purchases and withdrawals for your protection.

·          Do not use an ATM if it looks suspicious, it could be a skimming device.

·         Be wary of those trying to help you, especially when an ATM swallow your card, they may be trying to steal your card number and PIN.

·         Do not give your PIN to anyone over the Telephone,

RESOLVING ATM CASH DISPENSING PROBLEMS.

One of the most frustrating challenges bank customers in Nigeria face is the automated teller machine cash dispense errors. It is one problem most customers detest to have.  Often times some bank customers go to withdraw what can be regarded as their last saving through the ATM and get stuck with the cash dispense error.

This is never a palatable experience. The arrival of the ATMs in Nigeria is meant to make life easier for customers and bank alike. However, the ATM cash dispense error is one downside that customers have to live with, at least till the level of infrastructure improve in the country. The ATM dispense error also occurs in advance countries but not as frequent as we have in Nigeria.

The convenience of getting cash on the go has made many bank account holders to embrace the usage of payment cards. And as such, the issue of the ATM cash dispense error has been on the increase. It is, however, important to know how to resolve the ATM dispense error with ease.

What is ATM cash dispense error?

The ATM cash dispense error is situation where the machine debits (removes money from) your account without actually physically dispense the cash. Sometimes some machine dispense incomplete amount of cash.

Some of the reasons why we have the ATM dispense error;

·         Information and communication technology problem:

Often time, there is always a link or communication problem between the ATM and your bank’s server. This lack of connectivity occasioned by downtime or other factors may lead to the ATM dispense error.

·         Cash jam: there are times when wads of cash jam in the machine. This sometimes happen when the machine is counting the cash preparatory to dispensing it.

·         Power outrage: the ATM is programmed to survive on uninterrupted power supply device. There are times the UPS fails, or for one reason or the other, runs out of power suddenly. This can lead to cash dispense error.

·         Physical machine fault: There are times when the ATM itself develops faults. This usually make the machine to malfunction and causes problem, include cash dispense error.

Steps to resolving ATM cash dispense error.

When ATM cash dispense error occurs, there are steps to take to resolve it. One is to know that you cannot make a report to your bank until 24 hours after the botched transaction.  Banks advise customers to wait for 24 hours because the error is expected to correct itself within that period. A customer can only make a report when the ATM fails to do this within 24 hours.

There are many cases where the machines do the reversal. Most times, the ATM does the reversal almost immediately but in case it fails to do so, the bank will not entertain any request for reversal until after 24 hours. For customers who rely on such cash for immediate use, this can cause a lot of inconveniences, especially if not auto- reversed immediately. However, if the machine does not auto-reversed the deduction within the 24 hours period, here are the steps to take:

·         Visit your bank branch.

Visit any branch of your bank and fill a dispense error complaint form in which you will be asked to give details of the failed transactions. The filled form is used internally by the bank to verify and reverse your money within 24 to 48 hours. If this error happened on the machine of your bank, it does not take much time to resolve it. However, if it happened on the ATM of another bank, it takes more days as it involves inter-bank communication. It may take up to a week or sometimes more. In this case too, you will visit your bank and not the ATM owner bank, to fill the form. The difference is just that in this case, the form/complaint cannot be handled internally by your bank. Your bank will have to forward it to the head office where the inter-bank communication will take place. Hence, it takes longer time.

·         Follow up.

Sometimes, you may need to do a follow up with a visit to any of your bank’s branches. Instead of visiting your branch, you may do the follow up with a telephone call to the call Centre of the bank or your bank relationship officer. You may also send an email to the designated email address of your bank. It is recommended that you follow up with calls if your complaint is not resolve in the shortest time. So, whenever, you have an ATM cash dispense error, do not panic, just follow the due process, and you will get your money back soon.

·         Complain to central Bank of Nigeria.

The Central Bank of Nigeria has directed bank to resolve ATM cash dispense error within stipulated timelines. Should the bank be delaying more than necessary, you can escalate your complaint to the CBN by writing to its Customer Protection Department. This can be done through an email on the CBN website, www.cenbank.org.

ALL YOU NEED TO KNOW ABOUT PROCESS AND PROCEDURES TO OPEN BANK ACCOUNTS

Although Banks offer a wide variety of accounts but these accounts are mostly patronized and open by customers. Most Banks offer all of these types of accounts. Here is a brief description and requirement for opening them.

Savings account

These are intended to provide incentive for you to save money. You can make deposit and withdrawals but you can’t write Cheques. The Banks usually pay interest rate on these accounts. Savings account may be opened on request without taking references and must be operated strictly on cash basis. No Cheque payment order should be received into the account except approved by the bank’s Head of Operations.  Below are requirement to open different type of Savings account.

Requirement for opening of personal savings account

Applicant must be present in the banking premises with proper identification, and two recent passport size photographs.

Proper identification acceptable is;

·         International passport

·         National Driver license

·         National I.D card or voter’s card

·         Identity card of Blue chip company

Opening of joint savings account

This is where a savings account is to be opened for more than one person e.g. friends or husband and wife.

Requirements

·         Obtain account opening form which indicates in clear terms how withdrawals are to be made on account. E.g. ‘all to sign’ or ‘any two to sign’ or Mr. X to sign with one other’. E.tc.

·         Complete signature cards and ensure that all signatories sign the specimen signature card, make reference to the mandate on the card.

·         Obtain three passport size photographs each from all signatories.

Opening of other savings account

In opening a savings account for clubs, societies, unions, associations.e.tc, the procedure is basically the same as in operation for opening of individual savings account except for the fact that a proper mandate must taking before opening the account. The following conditions must be fulfilled in addition to the above:

1.      Obtain the constitution or its rules and regulations or a letter duly signed by the Chairman and the Secretary.

2.      Complete signature card and mark appropriately.

3.      Ensure that all signatories to the account are present to sign their specimen signature in the presence of bank officer.

4.      Obtain a letter authorizing the signatories to operate the account and also photographs of each signatory.

Opening savings account for minors

A savings account can safely be operated for a minor. Where the minor is 17 years old or less. The account will be opened and operated by an adult on behalf of the minor as a trust account.

Procedures

·         In this case, the opening of account signature card must be completed in the name of the adult.

·         As soon as the minor is 18 years of age, he should be properly introduced to the bank as an account holder in his own right,

·         Birth certificate or proof of age of the minor must be obtained before opening the account.

·         Passport photographs of both the account operator and the minor must be obtained.

Current Accounts;

This offer comprehensive set of services at cost. You are usually able to write an unlimited number of cheques. The interest rate on these accounts depends on how large the balance in the account is. It charges a monthly service fee if your balance falls below a pre-set level.  Types of current account and requirement to open them are hereby stated.

Opening of Current Account for Individual

Requirements:

·        Completion of account opening form

·        Proper Identification Cards (international passport, National or Voter’s card or valid driver’s license.

·        Two passport photographs

·        Two duly completed referee forms

 Limited Liability Company

Requirements:

·         Completion of account opening form

·         Photocopy of certificate of incorporation- original to be sighted and marked.

·         Photocopy of form CO7- original to be sighted and marked.

·         Copy certified memorandum and articles of association duly dated, sighted and witnessed.

·         Extract of the company Board’s Resolution authorizing opening of the account with the bank and signatories appointed- on the company letter headed paper.

·         Two duly completed referees forms, the names of the referees, signature, their banker/branch and account numbers must be clearly stated on the form.

·         Two passport size photographs of each of the signatories and copy of resident permit if foreigner.

·         Two duly completed signature cards on each signatory to the account.

Opening of current account for Partnership.

Procedure is as under individual account since all members of the partnership are regarded as having joint liability for the debits of the partnership. It is therefore important to note that for any action to be binding on all members, they should all sign any agreement including any debit authority. This is the position of the law, except stated otherwise by the partners in writing or clearly stated in their deed of partnership.

Requirement for opening account

·         Deed of partnership.

·         Completion mandate form C

·         Two duly completed referee forms on all signatories

·         Photocopy pages 1-5 of the applicants’ International passport or photocopy of driver’s license.

·         Two duly completed signature cards and letter committing the partners to joint and several liabilities should be obtained.

Opening account for clubs and associations

Where a club or association has not been duly registered the customer should be advised to open a join account in the name of their Trustees.

Requirements

·         Certificate of registration of club or association.

·         Extract of minute authorizing the opening of the account with the bank on their letter head paper, this extract should among other things state the club’s trustees and appointed signatories to the account and limit of their authority.

·         Completion of mandate form E.

·         Two duly completed referee forms of all signatories, the name of the referees, signature, their banker and account number must be clearly stated on the form.

·         Two passport photographs each of the signatories.

·         Photocopy pages 1-5 of the applicant international passport or photocopy of driver’s license.

·         Two duly completed signature cards.

·         Copy of constitution, rules and regulations, if there is none, a letter duly signed by the president and secretary to that effect and that when ready will be submitted to the bank.  

Fixed / Certificates of deposit:

 These are also known as TIME DEPOSIT, because the account holder has agreed to keep the money in the account for a specified period of time, from a month to six years. Because the money will be inaccessible, the account holder is rewarded with a higher interest rate. The rate increase as the duration increases. There is a substantial penalty for early withdrawals so don’t open this account if you think you may need the money before the maturity date. The basic requirement for opening this account is completion of authorization form and proper Identification.

COMMON BANKING TERMS YOU NEED TO KNOW

Some banking words that an account holder should be familiar with to be able to understand how Banks operate.

Customer: A person(s), society, firm or company can become a customer when he makes an offer, which the bank accepts.

Standing order:  A writing instruction that you give a bank to take a particular amount of money out of your account in a stated date of a month, to pay a person or organization for you.

Stress test:  A test used to find out if a bank or other financial institution is likely to fail or have serious liquidity problems in a difficult economic situation.

Strong room: A room in a bank, for safe keeping of money and other valuable items from being stolen or burn in fire.

Telebanking: A way of doing business with a bank by using your telephone or computer.

Unsecured Loan:  Loan that is collected without the use of property as collateral. It is also called personal loan.

Vault: A strongly protected room in a bank where money, gold and other valuable things are kept.

Withdrawal: The process of taking an amount of money from your bank account or the amount of money you take out.

In Credit: This is when money in your account is more than what you have taken out.

In red: When you have debit balance in your bank account.

Annual percentage rate: The percentage that a bank make you pay in interest when you borrow money from it, calculated over a period of a year.

Balance: The amount of money you have in your bank account.

Bank Statement: A document that shows all the money that went into or out of your bank account during a particular period of time.

Bank rate: This is the interest rate at which central bank lend money to commercial banks, often in form of short-term loans.

Bank draft: This is also called Banker’s cheque. It is an instrument provided to a customer of a bank for remittance purposes that is drawn by the bank, and payable through or at a bank.

Bank internet payment system: An electronic system for making payment by moving money directly into a bank account over the internet.

Borrower: Someone who borrow money from a bank.

Cardholder: Someone who owns a credit card or debit card for buying things.

Cash back: Money from your bank account that you can get from a shop when you pay for goods with a debit card.

Collateral: Property that you agree to give to a bank if you fail to pay back the money that you have borrowed.

Commission: An extra amount of money that you have to pay to a bank or other organization when they provide a service for you.

Credit: An arrangement to receive good from a shop or money from a bank and pay later. It can also mean the amount of money you add to an account.

Credit limit: The maximum amount of money that a customer can borrow using a current account or credit card.

Credit line: An amount of money that a person or a company can borrow from a bank or other financial institution.

Credit rating: Financial information about someone that a bank or shop uses for deciding whether to lend them money or to give them credit.

Credit transfer: A payment made directly from one bank account to another.

Debit: An amount of money take out from a bank account.

Deposit:  An amount of money you pay into a bank account.

Depositor: Someone who pays cash into a bank.

Direct debit: An order to a bank to regularly pay money from your account to a person or an organization.

Discount rate: The rate of interest that a Central bank charges another bank that borrows from it.

Interest rate: The percentage that a bank charges or pays you in interest when you borrow money from it or keep money in an account.

Internet banking: A system that allows you to use the internet to communicate with your bank, check your account and pay bills and do other transactions.

Lending rate: A percentage that a bank charges a customer who borrows money.

Mortgage: A legal agreement in which you borrow money from a bank in order to buy a house. You pay back your mortgage by making monthly payments.

Online banking: A system that allows you to communicate with your bank on the internet.

Overdraft: An agreement with your bank that allows you to spend money when you have no money left in your account. It can also be amount you owns your bank because you are into an agreement.

Overdrawn: This is when you take more that amount of money you have in your bank account.

Safe deposit box: A small box that is usually kept in a bank and use for storing valuable possessions.

Saver: Someone who regularly put money in a bank or cooperative society so that they can use it later.

Savings: money that you have save in a bank or invested so that you can used it later

SORT CODE: A number that is use on cheques to recognize the particular branch of a bank where customers keep their account.