Your Client Is Considering Transferring $25,000 from His Savings Account

question 106

Essay

Your client is considering transferring $25,000 from his savings account in a local bank paying 2% interest to a bank in Mexico City fully-insured bank paying 3%. What do you advise?

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Definitions:

Deposits In Transit

Funds that have been sent to a bank but not yet recorded in the bank's records, typically due to timing differences.

Bank Statement

A document issued by a bank to its customer listing transactions, including deposits, withdrawals, and fees over a specific period, usually monthly.

Outstanding Checks

Checks that have been written and recorded in a company's books but have not yet been cleared or cashed by the bank.

Deposit In Transit

Refers to money that has been received and recorded by a business but has not yet been recorded by the bank.