Categories of Business services and their meaning

There are many Categories of Business services that provide intangible products to the customers in the form of various functions according to the type of business. These services are broadly classified as under:

What is Business Services?

Business services are those which are connected with Banking, transport, warehousing, Insurance communication etc. and are helpful for the smooth running of the businesses.

Classification of Categories of Business services:

The various categories of the business services are classified as under:

1. Banking:

Banking services are related to money. A bank is a buyer and seller of money. Banks provide services which include accepting deposit of money from the public for investment purpose.

According to the Indian Baking regulation,1949 baking means:

“Accepting deposits of money from the public for the purpose of lending or investment.”

Banks provide a number of services to the customers related to:

1. Saving deposit account:

In these services, customer can withdraw or deposit the money anytime whenever needed. Bank issue passbook and cheque book and also record all transactions related to the account of the customer.

2. Current deposit account:

These services are given by the banks to the businessmen. In this, businessmen can avail the services related to depositing money withdrawals, overdraft and credit facility.

The statement of every transaction is sent to the account holder every week/month.

3. Recurring deposit account:

In this, category depositor can deposit a fixed amount of money on regular basis for a fixed period of time. And then get the interest along with the amount deposited at the time of maturity. The depositor gets a higher rate of interest than the saving account.

4. Fixed deposit account:

This is for the longer period fixed deposit account. In this category, a depositor deposit a fixed amount of money for a long period. Suppose Mr Amit deposited 1 lakh Rs. for six months. Like this, the depositor can deposit his money for up to five(5) five years. The banks provide the highest rate of interest in F.D.

5. Other services:

Bank overdraft facility is given by the banks. The customer who is having the current account can withdraw more than the balance in his account. Loan facilities,  Credit facilities, e-banking (which includes online payment of transfer of money from one account to another etc.)

Debit card, Credit card facility, ATM also provide by the bank to reduces the risk of carrying a huge amount of money.

2. Insurance:

Insurance is the contract between the insured and the insurer in which the insurer agrees to pay for the loss insured at the time of the event happening in consideration of the regular payment by the insured.

• The Firm/individual who agrees to pay the compensation is called the Insurance company.
• The individual who gets the compensation is called an insured.
• The amount of regular payment by the insured is called the premium.

Definition of insurance:

“Insurance is a social device providing financial compensation for the effects by misfortune, the payment being made from the accumulated contribution of all parties in the scheme.”

-D.H.Hausell

3. Communication services:

These are related to the exchange of ideas messages between two or more persons. There are two types of services which are as follows:

a) Postal services- includes post offices which are controlled by the government.

b) Telecom services-includes radio, cellular mobile services, cable services DTH services.

4. Transportation:

It means to move material goods from one place to another. It includes: Airlines, Roadway, Railways, Waterways these are very helpful for the businessmen to make the transportation or movement of material goods easier.

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1. https://tutorstips.com/financial-accounting/
2. https://tutorstips.com/advanced-financial-accounting-tutorial/