FEE BASED RETAIL FINANCIAL SERVICES

By Ankit chauhan(ITM universe)

vadodara

Fee Based ServicesFee based financial services are those services wherein financial institutions operate in specialized fields to earn a substantial income in the form of fees or dividends or brokerage on operations.

The major fee based financial services are as follow:

Credit cards:

A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating.

Card holders normally must pay for credit card Purchases within 30 days of purchase to avoid interests and/or penalties.

Debit cards:An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. This removes the need for bank clients to go to the bank to remove cash from their account as they can now just go to an ATM or pay electronically at merchant locations. This type of card, as a form of payment, also removes the need for checks as the debit card immediately transfers money from the client's account to the business account.

Smart cards:A smart card, typically a type of chip card, is a plastic card that contains an embedded computer chip–either a memory or microprocessor type–that stores and transacts data. This data is usually associated with either value, information, or both and is stored and processed within the card's chip. The card data is transacted via a reader that is part of a computing system. Systems that are enhanced with smart cards are in use today throughout several key applications, including healthcare, banking, entertainment, and transportation.

Automated teller machine (ATM): Computerized machine that permits bank customers to gain access to their accounts with a magnetically encoded plastic card and a code number. It enables the customers to perform several banking operations without the help of a teller, such as to withdraw cash, make deposits, pay bills, obtain bank statements, effect cash transfers. Also called automated Banking machine, automatic till machine, or remote service unit.

Safe lockers: Strong storage container maintained in the vault area of a bank and rented to bank customers for safekeeping of valuables. These boxes are said to be impervious to fire, flood, and theft, and their contents are covered by the bank's insurer. Access to individual boxes is secured through two different keys: one kept by the customer, the other by the bank.

Cheque: Cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of certain person or to the bearer of instrument.

Demand Draft: A method used by individuals to make transfer payments from one bank account to another. Demand drafts are marketed as a relatively secure method for cashing checks

Bancassurance: The sale of insurance and other similar products through a bank. This can help the consumer in some situations; for example, when a bank requires life insurance for those receiving a mortgage loan, the consumer could purchase the insurance directly from the bank. Some critics feel that bancassurance gives the bank too much control. Bancassurance is not legal in all countries, but it is legal in the United States.