Bank Accounts Types
These are the different Bank Accounts types:
A current account is a deposit account for traders, business owners, and entrepreneurs, who need to make and receive payments more often than others. These accounts hold more liquid deposits with no limit on the number of transactions per day. Current accounts allow an overdraft facility, that is withdrawing more than what is currently available in the account. Also, unlike savings accounts, where you earn some interest, these are zero-interest bearing accounts. You need to maintain a minimum balance to be able to operate current accounts.
A savings bank account is a regular deposit account, where you earn a minimum rate of interest. Banks offer a variety of savings accounts based on the type of depositor, features of the product, age or purpose of holding the account, and so on. There are regular savings accounts, savings accounts for children, senior citizens or women, institutional savings accounts, family savings accounts, and so many more. You have the option to pick from a range of savings products. There are zero-balance savings accounts and also advanced ones with features like auto sweep, debit cards, bill payments, and cross-product benefits. A cross-product benefit is when you have a savings account with a bank and get to avail yourself of special offers on opening a second account such as a Demat account.
Recurring Deposit Account
The features of the Recurring deposit account have been discussed below:
- Any individual or an Institution can open a recurring deposit account either separately or jointly
- 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
- A nomination facility is also available for RC accounts
- Passbook is issued for this type of bank account
- Premature withdrawal of the amount is permitted, provided a sum of amount is deducted as a penalty
Fixed Deposit Account
FD or a fixed deposit account is another type of bank account that can be opened in any Public or Private sector bank. The list of important things that need to be known concerning the fixed deposit account has been mentioned below:
- It is a one time deposit and one time take away account. Under this type of account, the account holder needs to deposit a fixed amount of sum (as per their wish) for a fixed time period
- The amount deposited in the 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 Dematerialized Account. DEMAT Account Features
- There are only two depository organizations that manage this type of bank account in India. This includes: National Securities Depository Limited and Central Depository Services Limited
- 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
The NRI Accounts are further divided 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 ( Non-Resident External Rupees) Account – When an Indian citizen moves abroad to work there, his/her account needs to be converted 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.
These are several Bank Accounts types.