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the monetary resources of enterprises, organizations, and the population which are deposited in credit institutions.
In capitalist countries deposits constitute one of the sources of loan capital. Deposits are made by industrial, commercial, and financial capitalists and are kept mainly in the major banks, which facilitates the centralization and concentration of capital and reinforces the domination of large capital. Savings and temporarily free capital owned by various sectors of the population, especially the petite and middle bourgeoisie, are also deposited in banks, particularly savings banks. The capital thus accumulated is used to a considerable extent by the state for investing in government securities, financing military expenditures and covering budget deficits, and crediting monopolies. The movement of deposits is subject to the spontaneous laws of capitalism, which are manifested especially sharply during periods of economic crisis, when large-scale withdrawals of deposits are accompanied by the financial collapse of banking institutions and the ruin of holders of small deposits.
In the USSR and other socialist countries, deposits in savings banks and Gosbank (State Bank) are a form of storing and protecting the money saved by the working masses. The growth of deposits, which are by their very nature labor savings, depends on the continuous development of the socialist economy, the rising material welfare of the people, and the growth of real income among the population. The attraction of the population’s deposits helps to strengthen money circulation and serves the needs of expanded socialist reproduction. The sum total of deposits and the growth of the population’s material welfare are increasing steadily in the USSR. Thus, the amount of deposits in savings banks almost tripled between 1960 and 1968. By early 1970 the total amount of deposits had risen to more than 38.4 billion rubles, and the amount of a single account averaged 526 rubles.
Soviet law specifies the right of citizens to keep their capital in credit institutions, dispose of the deposits freely, receive income on the deposits in the form of interest or lottery chances, and make noncash transfers. Deposits may be of the demand, time, lottery, or conditional type. Demand deposits are accepted and drawn (completely or partially) at any time upon request of the depositor. They may be payable to a named person or to the bearer. These deposits earn income at the rate of 2 percent annually. Time deposits, which are accepted for not less than six months, earn income at the higher rate of 3 percent annually. Lottery deposits earn income in the form of lottery winnings; drawings take place twice a year. Conditional deposits are payable to depositors upon observance of specific conditions, for example, when the depositor graduates from a university or reaches full legal age. Deposits are drawn on the basis of documents verifying the fulfillment of the conditions established for the account.
Deposits are accepted in unrestricted amounts and for un-restricted periods of time. The deposits and the income earned on them are free from taxation and duties. The state guarantees the secrecy and protection of deposits, as well as payment upon the first request of the depositor. The accounts of citizens are inviolable. Citizens may make deposits in the form of both cash and checks, or as noncash transfers. Non-cash transfers to accounts in savings banks have been developed to handle the wages of industrial and office workers, the monetary income of kolkhoz personnel, and pensions. In addition to deposits from the population, savings banks also accept deposits from several organizations, such as village soviets, kolkhozes, local trade union committees, and mutual insurance funds. The capital attracted by savings banks as deposits, with the exception of the necessary cash reserve, is used by the Gosbank of the USSR for crediting the national economy.
M. L. KOGAN