The difference between time deposit and demand deposit:
Time deposit and demand deposit are two common deposit forms in banks. The following are the main differences between them:
1, different types
Time deposit is a deposit with principal and interest withdrawn after maturity, and demand deposit is a deposit that can be withdrawn at any time.
2. Different interest rates
The longer the term of time deposit, the higher the interest rate. Demand deposit is a kind of deposit with no term, and usually the interest rate is low.
3. Different access conditions
Time deposit from 50 yuan, current deposit 1 yuan.
4. Different deposit methods
There are several forms of time deposits: lump-sum deposit and withdrawal, lump-sum deposit and withdrawal, principal deposit and withdrawal, and lump-sum deposit and withdrawal. Different forms of deposits have different interest rate calculation rules. No matter how you save, the interest rate of current deposit is fixed.
Derivative deposit:
Derivative deposits refer to deposits created by commercial banks by issuing loans and buying securities. After absorbing the original deposits, commercial banks only keep a part for cash preparation and deposits, and the rest can be used for lending and investment. Under the condition that non-cash settlement is widely used, customers who have obtained bank loans or investment funds do not (or do not) withdraw cash, but transfer it to their bank deposit accounts. In this way, a new deposit is formed on the basis of the original deposit. Commercial banks that accept this new deposit can not only keep part of it as reserve, but also use the rest for lending and investment, thus deriving deposits. If this process continues, a large number of derivative deposits can be created.
Necessary conditions for creating derivative deposits:
1, creating credit circulation tools
Credit creation refers to the increase of money supply caused by the expansion of demand deposits in the process of using excess reserves for loans or investments in the whole banking system, also known as "money manufacturing". When a commercial bank receives a sum of cash, except the statutory reserve, the rest will be used to issue loans or buy securities, but the payment method is to increase the current deposit of the borrower or securities seller in the bank account accordingly. Thereby generating derivative deposits. The payee deposits the check in another bank he contacts, and the second bank still lends it in the same way, which will generate another derivative deposit. And so on. The banking system can create derivative deposits that are several times the original deposits. The performance of currency manufacturing is influenced by legal reserve, but it is actually influenced by objective economic development.
2. Partial reserve system
The amount of reserves is directly related to the amount of derivatives deposits. The ratio of reserve drawn by banks to total deposits is called deposit reserve ratio. The higher the deposit reserve ratio, the more reserves are withdrawn, the less funds are available to banks, and the amount of derivatives deposits is correspondingly reduced; On the other hand, the lower the deposit reserve ratio, the less reserves are withdrawn, the more funds banks can use, and the amount of derivatives deposits increases accordingly.
3. Non-cash settlement system
Under the modern credit system, banks lend money to customers by increasing the balance of their deposit accounts, and customers complete their payment by issuing checks. Therefore, when banks increase loans or investments, they also increase deposits, that is, they create derivative deposits. If customers get loans from banks by withdrawing cash, derivative deposits will not be formed.