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# Learn Financial Freedom Step by Step

CASA Ratio is very important ratio for Bank and Shareholders who are interested to invest in banking business System. CASA Ratio is the relationship between Current and saving account deposits and total deposits in bank. If CASA Deposit is Rs. 20,000 and total deposit is Rs. 1,00,000, then CASA Ratio is

20%.

Formula

CASA Ratio = Current and saving account  DEPOSIT / Total deposits X 100

Now to understand What is best for banks and what is best for you as shareholders

1. If there is high CASA Ratio, it means, on current account, bank needs not pay interest and on saving account needs only low interest 3%  to 4%. So, if loan is given from it, profit margin of bank will high.

2. Customer can withdraw money any time, so, it is the risk fulfill same amount to customer and in case FD, it is sure, customer will not come before maturity.

For Shareholders

Very high CASA Ratio is not very good and very low is not very good. If it is already high and it decreases, then shareholder will assure that bank will earn money long run and EPS will receive long run also. See following project report which send me by my broker to choose this bank's shares.

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