Types of Bank Accounts

 

Types of Bank Accounts in India.

This article has gone into great detail on the many types of bank accounts. The specifics and benefits of each form of bank account are an important part of the General Awareness syllabus for the country's major government exams.

The supply of bank accounts is a crucial part of the banking business. Bank accounts of various types can be opened in any public or private sector bank.

This topic is primarily an important part of the financial and banking knowledge segment of numerous bank exams.

The following are the bank accounts that will be discussed in this article:

1. Savings Account
2. Current Account
3. Recurring Deposit Account
4. Fixed Deposit Account
5. DEMAT Account
6. NRI Account

Initially, there were just four types of bank accounts available in India. The Current Account, Savings Account, Recurring Deposit Account, and Fixed Deposit Account were among them. However, as the banking industry advanced, numerous more types of bank accounts were established.

Savings Account

Savings accounts, as the name implies, can be opened by an individual or jointly by two persons to save money.

The biggest advantage of creating a savings bank account is that the bank will pay you interest for doing so.

The following are some of the features of the Savings account:

• There's no limit to how many times an account user can deposit funds into this account, but there is still a limit to how many times money can be withdrawn from this account.
• The annual interest rate that an account holder receives ranges from 4% to 6%.
• There is a minimum balance that must be maintained for this sort of account, which varies by bank.
• If they like, savings account holders can obtain an ATM/Debit/Rupay Card.
• Savings bank accounts are further classified as Basic Savings Bank Deposit Account (BSBDA) and Basic Saving Bank Deposit Accounts Small Scheme (BSBDS) 
• Students, pensioners, and working professionals are the most likely to benefit from a savings bank account.

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Current Account

The current bank account is the second type of bank account. These accounts are for savings, these accounts are generally used by business organizations or firms.

The following are some significant considerations for a current bank account:

• Businessmen are the most likely to open this type of bank account. Associations, institutes, enterprises, religious institutions, and other businesses can have a current account.
• We can withdraw money as many times as we want because there is no limit on withdrawal
• Internet banking is provided
• This sort of bank account has no set maturity date.
• Current bank accounts can have an overdraft facility.
• An overdraft facility is available for current bank accounts.

Recurring Deposit Account

A recurrent Deposit account, often known as an RD account, is a type of account in which the account holder must deposit a predetermined amount every month until the account reaches the fixed maturity date.

The following are the benefits of the Recurring deposit account:

• A recurring deposit account can be opened by either an individual or an institution, either alone or jointly.
• Periodic or monthly instalments may be as little as Rs.50/- or may vary from bank to bank.
• An RD account can be opened for a period ranging from 6 months to 10 years.
• The interest rate varies depending on the bank with whom you open an account.
• For RD accounts, a nomination facility is also accessible.
• These bank accounts come with a passbook.
• Premature withdrawal of the amount is authorised, but a sum equal to the amount is deducted as a penalty.

Fixed Deposit Account

Another sort of bank account that can be opened in any public or private sector bank is a fixed deposit account.

The following are some of the most crucial things to understand about fixed deposit accounts:

• It is a one-time deposit account as well as a one-time takeaway account. The account holder must deposit a specified amount sum (as desired) for a fixed period under this sort of account.
• The funds deposited in the FD account can only be withdrawn in one lump sum, not in instalments.
• Banks offer interest on fixed deposit accounts.
• The interest rate is determined by the amount you deposit and the term of the FD.
• The entire sum is repayable before the FD's maturity date.

DEMAT Account

The DEMAT account is made up of shares and securities that can be stored electronically. DEMAT accounts are also known as Dematerialized Accounts.

The following are the points that a candidate should be aware of about the DEMAT Account:

• In India, there are just two depository organisations that administer this type of bank account. National Securities Depository Limited and Central Depository Services Limited are two examples.
• This facilitates the easy trading of bonds and stocks.
• Assists in completing stress-free share transactions
• KYC is required to open a DEMAT account.
• The transaction costs are decreased.
• Traders can work from any location.
• Securities transfers can be completed with minimal paperwork.

NRI Account

An NRI account is available to meet the banking needs of a Non-Resident Indian or a Person of Indian Origin.

NRI Accounts are further classified into three types:

1. Account for Non-Resident External Rupees– When an Indian citizen relocates to another country to work, his or her account must be changed into an NRE account. This account can be formed in collaboration with an Indian resident.
2. Account for Non-Resident Ordinary Rupees – This will allow you to simply move your international earnings to India. It can be opened as an FD/RD/Current/Savings account. These accounts can be opened individually or jointly.
3. Foreign Currency Non-Resident (FCNR) Account – This type of account can be used to manage foreign currencies. It can only be withdrawn after the maturity period if it is in the form of a term deposit.