Essence, classification and role of deposits.

In the economic literature there are a large number of definitions of deposit, but there is no generally accepted definition of deposit, which could serve as a starting point for analysis.

Let’s consider the comparative theoretical approaches to the definition of "deposit".

Ricardo defines a deposit as attracted resources as required capital of the bank. The bank would never have been established if he had made a profit only from the use of equity. The real benefit of the bank obtained only when it uses someone else's capital. "

Pigou gives the following definition: "deposit is real value of the population."

James Keynes: "Deposit is the share of income that people prefer to keep in cash."

In the book "The banking portfolio," the authors, referring to historical information, explain that the original form of deposit operations was deposited on monetary yards from me, etc. gold coins for their better preservation. For possession of gold coins owner had to pay a fee to the keeper, the latter guaranteed by the client returns just those coins that were given to him for safekeeping. Of course, in such circumstances, the money-changer could not perform loan business with the received coins, could not make a profit, from which they would have to pay the owners of the money rate of interest. Historically, the owners of money ceased to demand the return of the same coin, returning only the amount of money placed. Lengthened and storage time. Only then you can use these loans for credit, get a loan to pay the interest and the amount of their owner’s money. If before the moneychangers in the provision of loans to rely only on equity, but now they can also use the borrowed funds, given the conditions of the premises of the depositors for deposits. /2, p.275/

Interpretation of the term "deposit" in the economic literature is complex. In the foreign literature deposits are defined as all time and demand deposits from customers of the bank, with the exception of saving deposits.

According to Section I "of the Law on Banks and Banking Activities in the Republic of Kazakhstan" deposit is defined as money transferred from one person (depositor) to another person - the bank (including - National Bank) under the terms of their return in nominal terms irrespective of whether they should be returned on demand, or through any time in whole or in part, with a predetermined premium or without it, directly or transferred to the depositor, on behalf of third parties. /3/

Economic category of the deposit is the main part of the category of savings. However, if the savings, in general, are related to the distribution and redistribution of income and savings deposits that cover only the area of redistributive relations.

Savings can be any type of investment. Deposit is one of the forms of savings.

We can distinguish following essential features that characterize deposit:

1. Deposits are closely linked with the capital as part of personal income. The occurrence of such redistributive relations is caused by the fact that the deposit generates income because at the time of withdrawal of deposit money is returned with interest paid.

2. Deposits are characterized by a variety of terms of withdrawal. They may be the immediate investments and investments for the long term and demand deposits.

Deposit operations reflect the activities of the bank as an intermediary between investors and users of funds in purchasing resources for the free money market. Through deposit, the bank extends the possibility of credit investments to clients, other banks, creating a base for revenue. On the basis of deposit operations the largest part of credit resources of banks is formed, they are one of the important traditional banking operations directed towards mobilization of temporarily free funds of legal entities and individuals. The subjects of deposit operations on the one hand as debtors are commercial banks, on the other hand as creditors are public and private companies and organizations, commercial banks and other lending institutions, public organizations and foundations, financial and insurance companies, investment and trust Companies and Funds: some individuals and their associations. /4, p.64/

In banking practice deposits are classified according to several criteria: type of withdrawal, category of investors, purpose, and the degree of profitability.

Demand deposits are funds deposited on current accounts of investors indefinitely. They can be withdrawn or transferred to the investor to another account at any time without prior notification of the bank. These include settlement and current accounts and subaccounts of clients, republic and local budgets, public organizations, and other extra-budgetary funds.

Features of demand deposits lie in the following:

-Depositing and withdrawing money is implemented partly and completely at any time without any restrictions;

-Money can be withdrawn from the account in cash or by check;

-The account holder shall pay a fee for use of the account in the form of a fixed or a monthly rate for each check written out;

-For demand deposits, the bank is obliged to keep a minimum reserve in the National Bank of Kazakhstan in a higher proportion than for fixed-term deposits.

The main advantage of demand deposits is high liquidity, the possibility of their use as a means of payment. These deposits are primarily intended for current accounts. The money on these accounts are credited and removed with the implementation of economic and other activities, reflected in the terms of money in these accounts. The main disadvantage for the investor is the lack of payment of interest on the account or a small percentage. /6, p.432/

In the U.S., the law prohibits banks pay interest on demand deposits. Commercial banks in order to keep their investors offered them a new type of savings account - now-account, which, on the one hand, it would provide a high level of liquidity, the ability to use it for payment, and on the other hand, would allow investors to get some income. It opens only for individuals. It is a deposit account on demand, which can be calculated to write a bill, similar checks. On it you can receive income in the form of interest payments at the market rate.

Time deposit has a clearly defined period on it a fixed rate is paid. As a rule there are restrictions on early withdrawal of deposits. Time deposits are funds of individuals, businesses enterprises placed in bank accounts for a predetermined period of time but, as a rule, at least 1 month.

Features of time deposits are:

- Funds in the accounts are not intended for payments and are not writing checks;

- Funds in the accounts turn slowly;

- Time deposits pay a fixed rate. A maximum interest rate, in some periods, can be regulated by the National Bank;

- For time deposits is set lower form of mandatory reserves than demand deposits. For bank depositor the meaning of long-term investment of money lies in getting higher percentage. For a bank time deposit is also advantageous because it can use these funds for a longer time for making loan to the borrower and receiving high interest rates. Time deposits are generally not used for current payments. /7, p.441/

With reference to our banking system, the most typical form of time deposits is savings deposits of individuals, money that can be withdrawn with certain restrictions (for example, with advance notification).

Bank interest paid on time deposits of depositors should be lower than the interest received by the bank for the use of these deposits as loans. The difference between the interest earned on loans and paid the client for the deposit is bank's profit. Commercial banks carry out deposit transactions in accordance with the Constitution, the Law "On Banks and Banking Activities in the Republic of Kazakhstan" dated August 31, 1995. № 2444, the Tax Code, the Law "On Currency Regulation", the Charter of the Bank and the National Bank of the instruction "On the order of opening, maintaining and closing bank accounts of customers in banks," March 4, 1997, № 6, laws and regulations.

In international banking practice intermediate place between time deposits and demand deposits is occupied by savings deposits. Savings accounts have no fixed term. The most common types of personal savings accounts are regular savings deposits. They are characterized by the following:

- The lack of a fixed term of storage of funds;

- Does not require notification of withdrawal of funds;

- And when you make withdrawals from the account a savings book is presented, in which the movement of funds is reflected.

On fixed savings deposits either a fixed term is set or a period at the end of which, the contribution may be removed. Time deposits pay the highest interest in comparison with other types of savings deposits. On savings deposit with additional contributions pre-negotiated amount of money is contributed and cumulative savings are paid that certain date. Current savings deposits allow free entry and withdrawal and are mainly used for transfer of wages, pensions, and regular payments. On these deposits the minimum interest rate is accrued. In Western practice, these accounts can be "linked" to the time deposit for automatic reinforcement balance, in case of lack of funds to make payments on the account.

Savings deposit with the book allows the investor to monitor the growth of the savings and it suits the absence of a fixed period, and penalties for withdrawal of money. For banks savings accounts with a book are connected with additional costs: processing operations are time consuming, it is required to keep double counting - on the account and in the book, there are differences of records, books are exposed to loss.

Deposit or savings certificate is written evidence of the bank - the issuer of the contribution of funds, certifying the right of the depositor or its assignee to receive cash at maturity and interest.

Deposit certificates are issued in amounts and are acquired by entities. Non-negotiable certificates of deposits are kept by the depositor and presented them to the bank at maturity. Transmitted certificates of deposit are issued for a period of 14 days to 18 months. Savings certificates are designed for realization mainly to individuals. Circulation term of fixed savings certificates may not exceed 1 year and 3 years, if the conditions of their issue are coordinated with the National Bank. If the date of receipt of contribution is expired, then the certificate will become demand document. The bank is obliged to pay the amount indicated on document on demand of the owner. Savings certificates may be transferred only to an individual.

Deposit operations are based on the following principles:

- Assistance in receiving of banking profits and creation of the conditions for a profit in the future;

- Implementation of flexible deposit policy in order to maintain operational liquidity balance of the bank;

- Paying attention to time deposits, the most supportive liquidity balance of the bank;

- Providing linkages and synergies between deposit operations and operations on making loans on the terms and amounts;

- Taking measures directed at the development of banking services, attracting deposits.

Bank for its operations use up to 90% of the cash resources through borrowed funds, i.e. they accumulate temporarily free funds of their clients. Traditionally, the largest part of these funds is deposits.

Individuals, companies and organizations put their money in commercial banks for several reasons:

- Banks provide stronger guarantees of deposits;

- Depositors at any time, not only can claim the return of their investments, and obtain loans that exceed them;

- These contributions are profitable.