The different sorts of bank account discussed at length during this article. The details and benefits of each type of bank account constitute an important part of General Awareness.
One major aspect of the banking system is the provision of bank accounts. There are various types of bank accounts that can be opened in any Public or Private sector banks.
This topic essentially forms a very important part of the financial and banking awareness section of the various bank exams.
Given below is the list of bank accounts that we shall be discussing in this article:
- Savings Account
- Current Account
- Recurring Deposit Account
- Fixed Deposit Account
- DEMAT Account
- NRI Account
Initially, there have been only four sorts of bank accounts that were operating in India. These included the Current Account, Savings Account, Recurring Deposit Account, and Fixed Deposit Account. But later with the advancement within the banking sector. Various other sorts of bank account introduce.
As the name suggests, the savings accounts can be opened by an individual or jointly by two people with an aim to save money.
The main advantage of opening a savings checking account is that the bank pays you interest for opening this sort of account with them.
Given below are a few features of the Savings account:
- There is no limit to the number of times the account holder can deposit money in this account but there is a restriction on the number of times money can be withdrawn from this account.
- The rate of interest that an account holder get varies from 4% to 6% per annum
- There is no minimum balance that needs to be maintained for this type of an account
- The savings account holders can get an ATM/Debit/Rupay Card if they want to
- Savings financial balance is additionally partitioning into two sorts: Basic Savings Bank Deposit Account (BSBDA) and the other one is Basic Saving Bank Deposit Accounts Small Scheme (BSBDS)
- The savings bank account is mostly eligible for students, pensioners, and working professionals
The second sort of checking account is that the current checking account. These accounts do not use for the purpose of savings.
Some important pointers associated with the present checking account are discussed below:
- This sort of account is for the most part open by specialists. Associations, Institutions, Companies, Religious Institutions and other business-related works, the present account are often opened
- There is no fixed number of times that money can either deposit or withdrawn from such accounts
- Internet banking is available
- Overdraft facility is available for current bank accounts
- There is no interest that is paid on such accounts
Recurring Deposit Account
Recurring Deposit account or RD account is a form of account wherein the account holder needs to deposit a fixed amount every month until it reaches fix maturity date.
The features of the Recurring time deposit account are discussed below:
- Periodic or monthly installments that need to be added can be as low as Rs.50/- or may vary from bank to bank
- The range of months for which an RD account can be opened varies from 6 months to 120 months
- The interest rate varies depending upon the bank you choose to open an account with
- Premature withdrawal of the amount is permitted, provided a sum of amount is deducted as penalty
Fixed Deposit Account
FD or a fixed store account is another kind of financial balance that open in any Public or Private Area bank.
The list of important things that need to be known with respect to the fixed deposit account has been mentioned below:
- It is a onetime deposit and one time take away account. FD or a fixed store account is another kind of financial balance that can be opened in any Public or Private Area bank.
- The amount deposit in FD account can only be withdrawn all at once and not in installments
- Banks pay interest on the fixed deposit account
- The rate of interest depends upon the amount you deposit and for the time duration of the FD
- Full repayment of the amount is available before the maturity date of FD
Shares and securities which can be held in electronic format constitute the DEMAT account. The DEMAT account also stands for Dematerializ Account.
Given below the points that need to be known by a candidate regarding the DEMAT Account:
- There are only two depository organizations that manage this type of bank account in India.
- This helps facilitate easy trade of bonds and shares
- Helps in conducting stress-free transaction of shares
- KYC is required for opening the DEMAT Account
- Transaction cost is reduced
- Traders can work from anywhere
- The transfer of securities can be done with reduced paperwork’s
To fulfill the bank requirements of a Non-Residential Indian or a Person of India Origin, the option of an NRI account is available.
The NRI Accounts further divide into three types:
- NRO (Non-Resident Ordinary Rupees) Account – This shall allow you to transfer your foreign earnings easily to India. It can be opened in the form of an FD/RD/Current/Savings account. These accounts can be opened by an individual or jointly opened
- NRE Account – When an Indian citizen move abroad to work there, his/her account needs to convert into an NRE account. This account can be jointly opened with an Indian resident.
- FCNR (Foreign Currency Non-Resident) Account – This type of account can be opened to manage an international currency. It can only be in the form of a Term deposit and can be withdrawn after the maturity period only.