When Accounts Are Closed

At every branch transacting a large savings bank business there are always a number of depositors who withdraw their balances and close their accounts from time to time. One or more of these withdrawals might take place any day. Whenever interest has accrued on such an account, since the last date fixed for crediting interest on all accounts, it is necessary to calculate what is due upon it and to make a special entry for the interest payment.

The calculation of interest should be checked by another officer before the cheque or receipt is drawn up. When it has been, the most convenient method of getting the customer's receipt for his money is to take his signature on a cheque or receipt form, on which the principal sum, or balance shown at his credit, and the amount of interest about to be allowed him are both set down in figures and added together, the sum of the two being written in the body of the form.

When the item arrives at the cash book there would be two entries to go on the debit side - the amount shown as principal would be a debit for the customer's account under the head, "Savings Bank Accounts," and the amount shown as interest would be a debit for "Interest Paid," the two together representing the amount paid out by the teller.