The cashier, therefore, pays John Jones £1 19s. 10d. in cash, and gives him a new receipt, dated 9th December, for £200. A depositor, as a rule, draws his interest twice a year. Some persons, however, leave their receipts from three to five years without disturbing them; and the bank-manager, always anxious to swell the profits of his branch, is careful, when they are presented, to make his calculations at simple interest instead of at compound. Deposit customers, therefore, even when they do not require the interest due to them, should present their receipts six months after date in order to have the interest added to the principal, when both bear interest together.
For instance, assuming that John Jones had not required his interest, then he would have taken a new note for £201 19s. 10d.; but Mr. Jones, who is acquainted with the internal economies of a bank, and who is also aware of the intense frugality of the agent, knows that the companies do not allow interest upon the odd shillings of a deposit-receipt; so, giving the cashier an additional twopence, he takes a fresh note for £202, and walks away very well satisfied with himself. Were he to omit taking this precaution each half-year, and to hold his receipt for, say, five years, then, when he took it in, he would merely get certain rates upon £200 for five years. The larger the principal the greater, of course, is the loss of interest to the depositor.
Should not the depositor reside in the neighbourhood he can, after the expiration of six months, write his name on the back of the note and send it through the post to his banker, with the request that a new receipt be returned to him for the amount of the principal and interest. In the event of his wishing to draw the interest, a banker will send him either a draft or postal orders for the amount due to him, as he may direct. Of course, if he at any time require part of the principal, he will state what amount, and give directions whether the interest is to be added to the new receipt for the balance or to be included with the sum he is withdrawing, while he will take care to write his name upon the back of the note before despatching it. When sending a receipt by a messenger it is usual to write a note to the banker, telling him just what one requires and requesting him to pay the bearer of the letter.
Where interest amounting to £2 and over is withdrawn, the deposit-receipt must have on the back a penny postage stamp, which the depositor should cancel by writing his name across it. This must be done upon each note when the depositor has a plurality of receipts. Where, however, the interest upon any one is less than £2, a stamp is unnecessary. Nor is it required when the depositor adds principal and interest together and takes a fresh note for the aggregate, but where principal and interest or principal or interest amounting to £2 or over is withdrawn, the receipt must bear a penny stamp.
We now come to the question of the seven or fourteen days’ notice on these receipts, and, as previously stated, the banker seldom or never enforces his claim, though, when notice is not given, he occasionally deducts fourteen days if the whole of the principal be withdrawn. When this is contemplated it is better, perhaps, to give the necessary notice, but the manager, should the customer protest against this deduction, generally gives way. Again, if the note be for £100, and the depositor withdraw £50, and take a new receipt for the balance, the banker may deduct a certain number of days from the term on £50 (the sum withdrawn without notice). The customer, by checking his interest, will discover this loss, which the teller, if he remonstrated with him, will obligingly make good. It is also as well to bear in mind that some banks have two rates.
The London depositor, we know, receives 1½ below Bank rate; so assuming that Mr. Jones, of Whitechapel, held a note for £200, dated 5th February, 1903, and took it to the bank to draw the interest on 5th July of the same year, he would want to know how much was due to him at the latter date. First, therefore, he must ascertain whether any changes were made in the Bank rate during the period in question; and upon inquiry he found that the “official minimum” was raised to 4 per cent. on 2nd October, 1902, and lowered to 3½ on 21st May following, and to 3 upon the 18th June next.
Now, from 5th February (exclusive) to 5th July (inclusive) there are 150 days. His banker, therefore, owed him:—
| Bank Rate was from | |||
|---|---|---|---|
| 105 | days’ int. at 2½ p.c. p.a. on £200 | Feb. 5 to May 21 | 4 p.c. |
| 28 | days’ int. at 2 p.c. p.a. on £200 | May 21 to June 18 | 3½ p.c. |
| 17 | days’ int. at 1½ p.c. p.a. on £200 | June 18 to July 5 | 3 p.c. |
| 150 | days |
Here we get three rule-of-three sums, and, perhaps, it were as well to give a statement of the first, viz.:—