•
LAW OF FINANCIAL INSTITUTIONS AND SECURITIES
BLO3405
• Accounts
• Introduction
• Most accounts are either, current, savings or term deposits
• Current account payable on demand
• E banking has blurred the distinction between current and savings accounts
• For accounts in credit – the bank is loaned funds by customer: Foley v Hill (1848)
• 1. Bank accounts
• Savings accounts
• Usually earn interest for customer
• Term deposits
• Term deposits are a type of savings account that require notice before a withdrawal can be
made and they are normally for fixed terms
• Banks can and often do waive the notice requirement
• ACCOUNTS
• Current accounts
• Feature: used for third party payments, Therefore, a functional feature of many types of
what are commonly described as ‘everyday transaction accounts’ e.g cheque accounts,
savings accounts (with card access), and overdraft account
• Current accounts can use an overdraft facility
• accounts
• Overdraft accounts
• An overdraft account is a current account that may have a negative balance
• The bank has a right to charge both simple and compound interest on overdrafts: National
Bank of Greece v Pintos Shipping Co (1990)
• accounts
• Joint accounts
• Three major issues with joint accounts (p123)
• Debt is owed to the customers jointly and severally
• Often joint account holders will be operable with a single signature
• Presumption of survivorship
, • What if one signature is forged?
• See Ardern v Bank of NSW (1956) (p126)
• Accounts
• Term loan
• Overdraft ( Tyree, 4.5)
• Used to provide credit to customers that are businesses (example, or consumers ( example,
up to a specified maximum amount.
• features of overdrafts
• fluctuate from day to day
• repayable on demand
• provides facility to pay third parties (current account features).
• Credit card accounts
• What are credit cards?
• Those that provide continuing credit
• e.g VISA, MASTERCARD
• 2. Trust Accounts
• (a) Is a bank a trustee of its customer’s funds?
• What is a legal trust?
• A trust is a legal relationship where:
• Trustee holds the money or property ‘in trust for’ the beneficiary.
• Trustee has 'legal' title to money or property which it holds ‘in trust’ or for the benefit of the
• ‘beneficiary’.
• Trustee owes special fiduciary duties such as obligations of good faith ( placing
• beneficiary’s interests ahead of its own); duty of care; avoidance of conflicts of
interest;
• duty to account, etc.
• (c) Can money ever be held with a bank under a trust?.
•
• Yes, when
•
LAW OF FINANCIAL INSTITUTIONS AND SECURITIES
BLO3405
• Accounts
• Introduction
• Most accounts are either, current, savings or term deposits
• Current account payable on demand
• E banking has blurred the distinction between current and savings accounts
• For accounts in credit – the bank is loaned funds by customer: Foley v Hill (1848)
• 1. Bank accounts
• Savings accounts
• Usually earn interest for customer
• Term deposits
• Term deposits are a type of savings account that require notice before a withdrawal can be
made and they are normally for fixed terms
• Banks can and often do waive the notice requirement
• ACCOUNTS
• Current accounts
• Feature: used for third party payments, Therefore, a functional feature of many types of
what are commonly described as ‘everyday transaction accounts’ e.g cheque accounts,
savings accounts (with card access), and overdraft account
• Current accounts can use an overdraft facility
• accounts
• Overdraft accounts
• An overdraft account is a current account that may have a negative balance
• The bank has a right to charge both simple and compound interest on overdrafts: National
Bank of Greece v Pintos Shipping Co (1990)
• accounts
• Joint accounts
• Three major issues with joint accounts (p123)
• Debt is owed to the customers jointly and severally
• Often joint account holders will be operable with a single signature
• Presumption of survivorship
, • What if one signature is forged?
• See Ardern v Bank of NSW (1956) (p126)
• Accounts
• Term loan
• Overdraft ( Tyree, 4.5)
• Used to provide credit to customers that are businesses (example, or consumers ( example,
up to a specified maximum amount.
• features of overdrafts
• fluctuate from day to day
• repayable on demand
• provides facility to pay third parties (current account features).
• Credit card accounts
• What are credit cards?
• Those that provide continuing credit
• e.g VISA, MASTERCARD
• 2. Trust Accounts
• (a) Is a bank a trustee of its customer’s funds?
• What is a legal trust?
• A trust is a legal relationship where:
• Trustee holds the money or property ‘in trust for’ the beneficiary.
• Trustee has 'legal' title to money or property which it holds ‘in trust’ or for the benefit of the
• ‘beneficiary’.
• Trustee owes special fiduciary duties such as obligations of good faith ( placing
• beneficiary’s interests ahead of its own); duty of care; avoidance of conflicts of
interest;
• duty to account, etc.
• (c) Can money ever be held with a bank under a trust?.
•
• Yes, when
•
