Essay on Financial Services Provided by Bank of America

Introduction 

The Bank of America is a multinational financial services and investment bank holding company. Its headquarter is based in North Carolina. The bank was launched in North Carolina. Bank of America is the second biggest banking and financial institution in the US, behind JP Morgan Chase Bank, and the 8th biggest bank globally (Haralayya, 2021). It is one of the largest banking and financial institutions in the US. Bank of America serves about element per cent of all bank deposits in the United States, in competition with Wells Fargo, Citigroup, and JP Chase. Its main financial services involve investment banking, wealth management, and commercial banking.

Financial Services

The Bank of America is an internal part of the business world. Given its primacy, it is unbelievable for any business company to carry out business without a banking transaction and a bank account (Haralayya, 2021). The five financial services offered by The Bank of America includes wealth management and investment banking; foreign exchange, import and export exchange facilities; payments and remittances; credit facilities; and deposit facilities.

Deposit facilities

Term deposit, savings and current accounts services entail liabilities owned by Bank of America to the depositors. These accounts involve introduction formalities, payment of periodical interest, stop payment instructions, death claims, nomination facilities, issue of cheques and account opening.

Credit facilities

Credit facilities are a liability to a business organisation or an asset to the bank. The bank of America extends different credit facilities including letters and guarantees of credit, retail loans, corporate credit, agriculture loans, vehicle loans, bill discounting, cash credit, and loans. These involve one-time settlements, requests for enhancements, services charges, regulation of interest rates, sureties and services and credit requests.

Payments and Remittances

Payments and Remittances are considered to be assets to the Bank of America. These involve the transfer of money from one bank account to another bank account, from one State to the other Cheques collection, and payments of bills.

Foreign exchange, import, and export facilities

These facilities are both assets and liabilities to the Bank of America. The Bank of America provides both domestic banking services and international banking facilities. Import and export credit, remittances from foreign countries, currency exchange, cross country payments, foreign credit and such banking services are provided to business entities and individuals.

Wealth Management and Investment Banking

Wealth management and investment banking is an asset to the Bank of America. Wealth management involves the process of selling, maintaining, operating and cost-effectively developing wealth. Wealth management is used For firms such as Bank of America that manage wealth on behalf of other entities or individuals. Therefore, the Bank of America shareholders can know and recognizes available assets to be utilised to provide maximum returns. The assets owned by Bank of America fall into two major categories: current assets and fixed assets. None current or fixed assets include assets acquired by Bank of America for long term utilization, while current assets refer to those assets owned by Bank of America that can be easily converted into liquid in a short time.

Interest Rates offered by Bank CDs

The CD accounts of Bank of America come in 5 CD terms, that range from 7 months to thirty-seven months. The CD rates of Bank of America are lower than the best rates of CD from online banks (Bernal et al., 2014). The Bank of America provides 0.05 per cent APY from teems and balances on its Featured CDs, with the $ 10,000 opening deposit.

The opening balance seems to be relatively high, taking into consideration the low rates paid by the bank. Other financial institutions tend to pay higher APY, and at the same time requiring a low minimum deposit. The bank also provides Standard Term CDs, allowing individuals to pick any term from twenty-eight days to ten years. CDs of Standard Term have the lowest deposit of $1000 and provide 0.03 per cent APY on all balances and terms.

Interest on the CDs of Bank of America is compounded monthly as well as credited to the individual account monthly.

The penalty is charged for early withdrawal. For the bank CD terms of ninety days to twelve months, the penalty of early withdrawal is ninety days’ of rate on the money withdrawn. The penalty for early withdrawal for CDs terms of twelve to sixty months is one hundred days of interest on the withdrawn amount.

The CD yields of Bank of America are further down than the yields of the best rates of CD. The rates of banks are much lower than the average CD rates nationally. Thus one can find an alternative and better deal on rates of CD than what is offered by Bank of America. The Bank of America stipulates a minimum deposit of $10,000 that is a big commitment and sacrifice in exchange for low returns.

Reflection on Financial Services

Financial services provided by Bank of America is considered part of the financial systems providing various types of finance via different financial services, products, and credit instruments. In financial instruments provided by Bank of America, we came across letters of credit, debt instruments, promissory notes, Bill’s and cheques.

I also noticed that the financial products provided by Bank of America include different forms of mutual funds that extend different forms of investment opportunities. Again, the Bank of America also extends many financial products including debit cards and credit cards.

The Bank of America is also strategic in its services including hire purchase and factoring, and this makes it possible to acquire forms of assets on a lease or ownership.

I was fascinated by the services provided by the Bank of America, for instance, investment-related services and safe deposit boxes because they are the same financial services provided by my local bank.

I learnt that it is the presence of financial facilities and services provided by Bank of America that makes a country enhance its economic condition in which there is more production in each sector that lead to economic growth.

The economic growth benefit is reflected on individuals in the form of financial prosperity whereby people enjoy a better and improved standard of living, for instance, the standard of living in the United States of America is high due to financial prosperity. It is here that that the financial facilities provided by Bank of America enable a person to obtain or acquire different consumer products via hire purchase. As a result, Bank of America also earns profits. The presence of Bank of America promotes saving, production and investment.

References

Bernal, O., Gnabo, J. Y., & Guilmin, G. (2014). Assessing the contribution of banks, insurance and other financial services to systemic risk. Journal of Banking & Finance, 47, 270-287.

Haralayya, D. (2021). Study of Banking Services Provided by Banks in India. International Research Journal of Humanities and Interdisciplinary Studies (IRJHIS), 2(6), 6-12.