It is a combination of a number of components.
a) The rate paid out to the depositor
b) The Central Cash and Reserve Liquidity Requirement
c) The compensation paid to the branch or the sales team that booked the deposit
d) Any additional tangible or non-tangible incentives offered or paid to the depositor or the sales team
When you combine these factors across all products and deposits across the bank you get the cost of deposit for the bank.
cost of deposits= Interest paid on Deposits/Total deposits
Customers deposits in a bank are the bank's liabilities because they are OWED to the customer.
It acts as an insurer of bank customer deposits. A+
A Bank Teller
$100,000This is sort of complicated. Per www.fdic.gov:"The basic insurance amount is $250,000 per depositor, per insured bank."The $250,000 amount applies to all depositors of an insured bank."Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank."Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $250,000 at one insured bank and still be fully insured."
cost of deposits= Interest paid on Deposits/Total deposits
Customers deposits in a bank are the bank's liabilities because they are OWED to the customer.
In 1995, $2.7 trillion was held in American bank deposits
Subordinated debt is a debt that ranks lower than bank deposits. From this point of view subordinated debt can't be deposits
It acts as an insurer of bank customer deposits. A+
A Bank Teller
The deposits bank on further invests!
In bank deposits.
Answering "What steps can a bank take to deal with a significant outflow of deposits?"
Existing customer referrals. Tell a friend. Ask existing customers to refer friends and family.
$100,000This is sort of complicated. Per www.fdic.gov:"The basic insurance amount is $250,000 per depositor, per insured bank."The $250,000 amount applies to all depositors of an insured bank."Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank."Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $250,000 at one insured bank and still be fully insured."
what are the disadvantages of bank deposits secrecy