Tutorial: Business Academy

Topic: Financial Market and Banks

Prepared by: Ing. Ingrid Ilčíková

Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/04.0002

je spolufinancován Evropským sociálním fondem a státním rozpočtem

České republiky.

the bank acquires foreign capital, becomes a debtor; it is reflected on the liabilities side; after some time the money is returned to the owner; the means are used to provide loans

the deposits are insured by law; the compensation – the protection of deposits at 100%, however up to EUR 50 000

the height of the deposit interest depends on the money amount, the length of the deposit, the situation in the state – on its basis the CNB sets its own rules

the interest on the deposit is always lower than of the loan

the banks are trying to get a lot of clients, therefore offering a wide range of services prepared for various kinds of clients – children, students, citizens, entrepreneurs and small businesses, companies, towns, cities

the deposits may be both in local and foreign currency other possibilities of capital appreciation– see other

bank activities

demand deposits, non-term deposits for the bank an unstable financial resource; a low interest, a

withholding tax; e.g. current account, giro, passbooks the principal deposits money in the account using it for financal

management every day; the amount is cancellable at any time, the situation changes every day

for the bank, these deposits are also advantageous; it follows from the existence of the grounds; the clients rarely run out their account balances to zero

term deposits a more stable financial source, a higher interest rate, a withholding

tax, a more favourable evaluation of the finance-revolving; after the expiry of the agreed period of revolving, the deposit is automatically extended for the next period (of the same length). The interest rate shall be amended only on the day of renewal of the deposit, the deposits for 1, 2 weeks, 1, 3, 6 or 12 months; to manipulate with the finance is possible only on a specific day

certificates of deposit – depository receipts – certificated security, which allows the assessment of available funds. Issuing the certificate of deposit means that the bank agrees to pay its owner the value of the certificate including the interest by the agreed date.

building savings – offered by building societies as purpose deposits; under certain conditions they provide construction loans; monthly or annual installments for a period of 6 years; a fixed interest rate, state aid

loans from central banks – rediscount, Lombard loan, emergency loan

loans from other banks – loans at „one-crown“ rates -PRIBOR (Prague Interbank Offer Rates); often used, operational; day loans; 1-3-6-12 months

issuing bank bonds issuing mortgage bonds

opening and maintenance of accounts non-cash payments both domestic and foreign payment cards – issued to current or Giro accounts cheques direct banking exchanging foreign currencies foreign exchange operations trading bonds and shares for a client safe custody service consultancy building savings contributory pension scheme life insurance

Find out all the services offered by the bank in which you have your account.

You want to achieve a target savings sum of 85.000 CZK; work out the length of the saving time using the idnes.cz calculator and find out the effect of inflation on the savings.

Klínský, P. Ekonomika 3. Praha: FORTUNA, 2004. ISBN 80-7168-826-6.

Synek, M. a kol. Podniková ekonomika. Praha: C.H.Beck,1999. ISBN 80-7179-228-4.

Švarcová, J. a kol. Ekonomie – stručný přehled. Zlín: CEED, 2008. ISBN 978-80-903433-7-5.

Available on http://kb.cz/cs/lide/obcane/vse-co-kb-nabizi.shtml

Available on http://kalkulacky.idnes.cz/cr_kalkulator-inflace.php

Available on http://kalkulacky.idnes.cz/cr_kalkulator-doby sporeni k nasporeni cilove sumy.php