Mathematics Project Class X

Project 1
Introduction:

Banks play a huge role in our daily lives and the global economy. They provide a safe place to
store money, help people and businesses with loans, and make financial transactions smooth
and efficient. Imagine trying to buy a house, start a business, or even shop online without banks
—it would be a lot more complicated.

At their core, banks take deposits, lend money, and offer various financial services. They act as
a bridge between those who have extra money and those who need it. Over time, banking has
expanded beyond just savings and loans. Today, banks offer investment opportunities, online
banking, and even global money transfers, making them an essential part of our interconnected
world.

Banking isn’t just about storing money; it’s about keeping the economy running. A strong
banking system ensures businesses can grow, people can access credit, and financial stability
is maintained. In short, banks help keep the financial world in balance.

History of Banking:

The idea of banking isn’t new—it goes back thousands of years. In ancient Mesopotamia
(around 2000 BCE), temples and palaces acted as early banks, storing wealth and lending
money. Similar practices existed in ancient Egypt, Greece, and Rome, where merchants and
moneylenders helped trade by offering credit.

Fast forward to the medieval period, Italian banks in cities like Florence and Venice introduced
new financial tools, such as early versions of checks and credit systems. In 1694, the Bank of
England was established, formalizing modern banking and introducing paper money.

The Industrial Revolution completely changed the game. With industries growing, banks
expanded, stock markets emerged, and the financial system became more structured. In the
20th and 21st centuries, technology took banking to a whole new level. Today, with online
banking, mobile payments, and global transactions, banks continue to evolve, shaping how we
manage money in the digital age.

Functions of Banks:

Banks are important for the economy because they help people and businesses manage
money. Their services can be divided into two main types: primary functions and secondary
functions.
Primary Functions:

1. Accepting Deposits

Banks keep people’s money safe and allow them to withdraw it when needed. They offer
different types of accounts:

● Savings Accounts: Help individuals save money while earning interest.

● Current Accounts: Used by businesses for frequent transactions, but they don’t earn
interest.

● Fixed Deposit Accounts: Money is locked in for a set time and earns higher interest.

2. Lending Money

Banks give loans to people and businesses for various needs, like education, personal
expenses, or business growth. They charge interest on these loans, which is one of their main
ways of making money.

Secondary Functions:

1. Agency Functions

Banks also act on behalf of their customers to perform tasks such as:

● Transferring Money: Moving funds between accounts or different banks.

● Collecting Payments: Handling things like salaries, pensions, and dividends.

● Cheque Processing: Ensuring customers receive money from deposited cheques.

● Managing Investments: Helping customers buy and sell stocks.

2. Utility Functions

These services make banking more useful:

● Letters of Credit & Traveler’s Cheques: Help with international transactions.

● Safe Lockers: Secure storage for valuables and documents.

 ● Currency Exchange: Changing money for international trade.

● Helping Businesses Raise Money: Assisting in selling company shares.

Other Banking Services:

Banks also offer various ways to access their services:

● Branch Banking: Visiting a bank in person.

● Online Banking: Using the internet for transactions.

● Mobile Banking: Managing accounts through a phone app.

● Telephone Banking: Handling banking over phone calls.

Types of Bank Accounts:

A savings account and a fixed deposit (FD) account are two common types of bank accounts,
each serving different financial needs.

Savings Account:
A savings account is a bank account where you can deposit money, keep it safe, and withdraw
it whenever needed. It also earns interest, making it a good option for regular savings and daily
expenses.

Key Features:

● Easy Access: You can withdraw money anytime, making it useful for emergencies.

● Interest Rates: Banks usually offer 3% to 7% interest per year, depending on the bank
and account type.

● Convenience: You can use ATMs, online banking, and mobile apps for transactions. You
can also pay bills directly.

● Safety: Your money is protected by the government up to a certain limit (e.g., ₹5 lakh in
India).

Fixed Deposit (FD) Account:

A fixed deposit (FD) account is a type of bank account where you deposit a lump sum of money
for a set period at a fixed interest rate. It offers higher interest than a savings account but
requires you to keep the money locked in until the chosen time period ends.

Key Features:

● Higher Interest: FDs offer better interest rates than savings accounts, usually 5% to 8%
per year.

● Lock-in Period: Money is locked in for a fixed time (a few months to several years). Early
withdrawal leads to penalties.

● Guaranteed Returns: The interest rate is fixed, so you know exactly how much you will
earn.

● Auto-Renewal Options: Many banks offer auto-renewal features that automatically

reinvest your principal and accrued interest upon maturity unless instructed otherwise.

Name of the Bank: Savings account interest Fixed deposit account

rate: interest rate:

State Bank of India 2.70% - 3.00% p.a 3.00% - 3.50% p.a

HDFC Bank 3.00% - 3.50% p.a 4.50% - 7.00% p.a

ICICI Bank 3.00% - 3.50% p.a 4.50% - 6.90% p.a

Axis Bank 3.00% - 3.50% p.a 5.75% - 7.00% p.a

Bank of Baroda 2.75% - 3.05% p.a 5.50% - 6.50% p.a

If I had to take a loan, I would choose SBI (State Bank of India) because:

1. Low Interest Rates – SBI offers loans at lower interest rates compared to many other banks,
making it more affordable.

2. Government Support – Since SBI is a government bank, it is stable and trustworthy.

3. Different Loan Options – SBI provides various loans like personal, home, car, and education
loans, with flexible repayment plans.
4. Easy Access – With the largest number of branches and ATMs in India, SBI makes loan
processing and repayments more convenient.

5. Special Discounts – SBI gives lower interest rates to women, senior citizens, and salaried
individuals, helping them save money.

Practical Application

1. Visiting a Bank:

I visited [Bank Name] to learn about different types of bank accounts and loan facilities.

I observed how customers deposit and withdraw money.

I interacted with a bank employee who explained the process of opening a savings account.

2. Opening a Bank Account:

I assisted my parents in opening a savings account for me.

I learned about the required documents like Aadhaar card, PAN card, and passport-sized
photographs.

I understood how interest is calculated on savings accounts.

3. Using Digital Banking Services:

I explored mobile banking apps and learned how to transfer money using UPI, NEFT, and
RTGS.

I created a digital wallet (Paytm/Google Pay/PhonePe) and used it for small transactions.

I set up internet banking to check account balances and pay utility bills online.

4. ATM Transactions:
I learned how to use an ATM to withdraw cash, check balance, and deposit money.

I understood the importance of keeping the ATM PIN secure to prevent fraud.

5. Applying for a Loan Inquiry:

I inquired about education loans and personal loans at a bank.

I compared the interest rates of different banks before selecting a suitable one.

Conclusion:
Banks play an important role in the economy by providing financial services that help
individuals, businesses, and governments. They accept deposits, give loans, make payments
easier, and offer investment options. These services help the financial system run smoothly and
promote economic growth.

This project explored key aspects of banking, such as what banks are, their history, functions,
and the types of accounts they offer. It focused on savings and fixed deposit accounts,
explaining their features, benefits, and the interest rates different banks offer. Comparing these
rates helps customers choose the best option for their financial needs.

When applying for a loan, choosing the right bank depends on factors like interest rates,
repayment options, customer service, and extra benefits. Choosing the right bank can lead to a
better borrowing experience and financial security.

Understanding banking services helps people manage their money better and take advantage
of available options. Whether saving for the future or borrowing for immediate needs, banks
provide solutions for various financial goals.

Banks are essential for helping individuals and businesses achieve their financial goals. By
making smart choices and staying informed about savings accounts, fixed deposits, and loans,
customers can improve their financial health and help the economy grow.

Acknowledgment:
Firstly i would like to thank my parents for taking me to the bank and allowing me to enquire to
the bank manager and in helping me by giving me the required materials in the completion of
this project.
Secondly I would like to thank my maths teacher for giving me the work on this project of
banking. I learnt alot about different types of loans, accounts and their interest rates.

Thirdly i would like to thank my friends for sharing their ideas in this project.

Bibliography:

rbi.org.in
sbi.co.in
hdfcbank.com
icicibank.com
axisbank.com
bankofbaroda.in
finmin.nic.in
wikipedia.org/wiki/History_of_banking