What are the different types of Bank Accounts?
In this article, we are going to know about the different types of bank accounts in Banks. Most banks and financial institutions supply the account holders with free or affordable services, thus bank accounts are cheaper.
It is a simple process to grow cash. Having a checking account is favourable as banks offer the ability to access credits to their customers for personal loans, home loans, education loans, etc.
One major side of the banking system is the provision of bank accounts. There are different types of bank accounts that might be opened in any Public or Private sector bank.
Initially, there have been only four types of bank accounts that were operating in our country. These included the current Account, savings account, recurring deposit account, and fixed deposit account. However later with the advancement within the banking sector, numerous types of bank accounts were introduced.
What are the different types of Bank accounts?
The different types of bank accounts are as follows
- As the name indicates, the savings accounts are opened by a personal or collectively by 2 individuals to save cash.
- The main advantage of opening this account is that the bank pays you interest for opening this type of account with them.
Savings account features
- There is no limit to the number of times the account holder will deposit cash in the savings account however there's a restriction on the number of times cash is withdrawn from this account.
- The interest rate that an account holder get varies from 4% to 5% depending on the bank, once a year. Best interest-paying Bank
- There is no minimum balance that must be maintained for this sort of an account
- The account holders will get an ATM/Debit/Rupay Card if they require to
- The savings account is additional divided into 2 types: Basic Savings bank deposit Account (BSBDA) and also the different one is Basic Saving fund Accounts small Scheme(BSBDS)
- The savings bank account is usually eligible for college kids, pensioners, and dealing professionals
The second type of account in a bank is the current account. These accounts aren't used for the aim of savings.
Current Account Features
- The current account is usually opened by businessmen. Associations, institutions, Companies, spiritual establishments, and different business-related works.
- There is no fixed number of times that cash will either be deposited or withdrawn from such accounts
- Internet banking facility is available
- This type of current account doesn't have any fixed maturity
- Overdraft facility is obtainable for current bank accounts
- No interest's paid on such accounts
Recurring Deposit account or RD
A recurring deposit account or RD account is a type of account whereby the account holder must deposit a fixed amount monthly till it reaches the fixed due date.
- Any individual or an institution will open an RD time deposit account either one by one or more collectively
- Periodic or monthly instalments that require to be further are as low as Rs.50/- or might vary from bank to bank
- The number of months that an RD account is opened varies from 6 months to 5 years.
- The rate varies relying upon the bank you select to open an account with
- A nomination facility is additionally obtainable for accounts
- A bank passbook is issued for this type of account.
- Premature withdrawal of the amount is allowable, provided a sum of the amount is subtracted as a penalty
FD or a fixed deposit account is another type of account offered by banks that may be opened in any Public or private sector bank.
- It is a one-time deposit and a one-time takeout account. below this sort of account, the account holder must deposit a fixed total amount(as per their wish) for a fixed period
- The amount deposited in the FD account will solely be withdrawn all quickly and not in instalments
- Banks pay interest on the fixed deposit account
- The rate of interest depends upon the amount you deposit and also the time length of the FD
- Full compensation on the amount is obtainable before the maturity of FD
Shares and securities which may be controlled in electronic format represent the DEMAT account. The DEMAT account conjointly stands for Dematerialized Account.
DEMAT ACCOUNT FEATURES
- There are mainly 2 depository organizations that manage this type of bank account in India. They are
- National Securities depository limited
- Central depository Services limited
- This helps facilitate the simple trade of bonds and shares
- Helps in conducting stress-free transactions of shares
- KYC is needed for opening the DEMAT Account
- Transaction cost is reduced
- Traders will work from anyplace
- The transfer of securities is through with reduced work
To fulfil the bank requirements of a Non-Residential Indian or citizen of India, the choice of an NRI account is obtainable.
The NRI Accounts are additional divided into 3 types:
NRO ( Non-Resident ordinary Rupees) Account
This allows the customer to transfer their foreign earnings simply to India. It is opened in the type of FD/RD/Current/Savings account. These accounts are opened by a private or collectively opened
NRE ( Non-Resident External Rupees) Account –
Once an Indian citizen moves abroad to figure there, his/her account must be reborn into an NRE account. This account is collectively opened by an Indian resident
FCNR ( Foreign Currency Non-Resident ) Account –
An FCNR account is opened to manage a global currency. It will solely be within the sort of a Term deposit and might be withdrawn when the maturity amount is sole.
These are the different accounts provided by Banks, these accounts can help the customers to increase their income.