Банкеръ Weekly



Time deposits are maybe the only banking product for which credit institutions do not rely on profits from hidden fees and commissions. The most important requirement to the depositors is to maintain a floor amount on it. Every bank has different demands in this aspect. BULBANK and HVB Biochim, for example, receive savings of BGN20 and BGN50, while the minimum deposit size in UBB is BGN1,000.Most banks do not collect fees and commissions when they open deposit accounts or when the client draws money from his deposit on maturity. Fees are not collected even when the withdrawn amounts in cash are above the limits, defined by the respective bank. In other transactions like withdrawals from current accounts credit institutions collect a commission of 0.2% for sums over the limits. BULBANK charges this commission when the client wants to take in cash more than BGN2,000, SG EXPRESSBANK has a ceiling of BGN3,000, while Allianz-Bulgaria has determined a limit of BGN5,000. In case of drawing money in cash from deposit accounts no such commission is charged, but only in case the client asks for a part or the total amount of his funds on the date of maturity. For example, if the deposit contract is signed on February 28 and has one month to maturity, money should be received on March 28 or any other following month on 28, otherwise on the amount received will be charged a fee for a cash transaction. This request may seem extortionate for most customers but in banking view it is reasonable enough. Every bank will register good financial results only in case it assesses correctly the money inflows and the funds paid on its daily liabilities, including individual deposits. This process is known as liquidity management. Along with the risk management the two activities are amongst the most important and complex for managers. Because the credit institution stability depends on them.Ahead of term deposit withdrawals, however, infringe the banking management assessments for its money flows and that may cause losses. As if more individuals decide to break their saving accounts before maturity, the bank should sell equities before the term set or take its deposits from other credit institutions. All these actions lead to income losses from those investments. For to compensate this loss, the bank penalises the client who asks for his money before the maturity with not paying a part or the total interest negotiated and collects fees for a cash withdrawal. These requirements, however, are clear to every customer who has deposited money with a credit institution. However, for to be absolutely honest with their clients banks should write down these penalties in their brochures and on the special boards where interests are shown. Because not every customer has in mind to ask the bank employees for the penalties in case of ahead of term deposit withdrawals. Moreover, nobody is obliged to seek these clauses in the banking Internet sites or in the detailed (up to 100 pages) and too complicated Tariffs for Fees and Commissions.

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