How many types of Bank Accounts are there
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How many types of Bank Accounts are there ?
On the basis of the purpose they serve in banks, we can classify the Savings Bank deposit accounts into the following categories:-
- Savings bank accounts.
- Current deposit account.
- Fixed deposit account.
- Recurring deposit account.
- Flexi deposit account.
- Demat account.
- NRI account.
- NRO ACCOUNT or Non resident ordinary rupee account.
- Non resident external savings account for fixed deposit accounts.
- Foreign currency non resident account.
Saving bank account.
The type of account that can be opened with the minimum initial deposit amount that varies from bank to bank is called saving bank account.
Features of Saving Bank Account
- With the aim of saving money and an individual or jointly by two or more people can open savings bank account.
- In such account money can be deposited anytime, withdrawals can be made either by signing of withdrawal form or by issuing the cheque or by using ATM card issued by the bank.
- There is no limit of number of deposits made by the customer into the bank.
- There is a restriction or the number of withdrawals are Limited on such kind of bank account.
- Rate of interest on such account varies from bank to bank generally it is between 3 to 6%.
- There is a need of maintaining minimum balance on such accounts.
- The bank issues ATM debit or rupay card to the customer of such account.
Current deposit account.
These accounts are not meant for the savings.
Features of Current deposit account.
- Some People are required to make payment on their daily basis through bank account like a big businessman, macro companies, schools, college and hospitals, and since the number of withdrawals in savings bank accounts are limited so they required a bank account in which they can made withdrawal in any numbers. For this purpose bank open current account for them.
- Like saving bank account this account also requires certain minimum amount of deposit while opening an account which varies from banks to banks.
- On such deposit Bank does not pay any interest to them rather it charges a certain amount each year as operational charges.
- For convenience of bank account holders, Bank also allowed them extra facility called bank overdraft facility, which allowed them to withdraw certain sum of money which is actually not in account but they can take and use it for as if now and will have to pay back the bank later.
Fixed deposit account or Term Deposit Account
These accounts are meant for Long term Savings.
Features of Fixed deposit account or Term Deposit Account.
- If you want to save money for long period, and also want a higher rate of interest over it then fixed deposit account or term deposit account is for you.
- The period of deposit major changes from 7 days to 10 years or more during which no withdrawals is allowed.
- However on requested depositor are allowed to do the withdrawal of the money before maturity.
- But in such case the pre-described rate of interest gets lower.
- You can also take a loan by giving a fixed deposit receipt as a security to the bank.
- At the end of the period the deposit may be withdrawn or renewed for the period.
Recurring deposit account.
These Type of account are open with the purpose of Regular Savings
Features of Recurring deposit account.
- If you save on regular basis and expect to a fair return on the deposit over a period of time then the recurring deposit account is for you.
- For opening recurring deposit account you have to agree to deposit a fixed amount once in a month for a certain period. The total deposit along with the interest therein its payable on maturity.
- However in case of emergency you are allowed to withdraw the money from your account before maturity with the interest till that period.
- Recurring deposit account allowed u a higher rate of interest than the Savings Bank deposit account.
Flexi deposit account.
This is a combination of on demand and fixed deposit account.
Features of Flexi deposit account.
- In such account agreement is made between the customer and a bank. Once the balance in savings bank or the current bank account crosses a Pre-agreed level then the surplus amount is automatically transferred to the fixed deposit account of pre determined maturity.
- The amount deposited in FD account can only be withdrawn all at once only, and not in instalments.
- Banks pay interest on the fixed deposit account which varies from bank to bank.
- The rate of interest depends upon the amount you deposit and for the time duration.
Demat account.
Shares and securities which can be held in electronic format constitute the Demat account.
Features of Flexi deposit account.
- Demat account is short term used for Dematerialized account.
- Shares and securities which can be held in electronic format constitute the Demat account.
- Trade of bonds and shares become easy because of Demat account.
- KYC is mandatory for opening Demat account.
- Transfer of security become easy due to less paperwork.
- Transaction cost reduced.
NRI account.
To fulfill the requirement of non residential Indian are the person of Indian Origin the energy accounts are there.
Features of NRI account.
The NRI accounts can be further divided into these three types.
- NRO ACCOUNT or Non resident ordinary rupee account.
- Non resident external savings account for fixed deposit accounts.
- Foreign currency non resident account.
Non resident ordinary rupee account or NRO ACCOUNT.
- This kind of account allowed the person to transfer their foreign are names easily to India.
- It can be open in the form of fixed deposit account, recurring account, current account or savings account.
- When money deposited in such account it immediately gets converted into INR at the prevailing exchange rate.
- The income earned on NRO account is taxed.
Non resident external savings account for fixed deposit accounts.
- This account is similar to NRO account and the Amount deposited in this account are maintained in Indian currency.
- The interest earned on this kind of account is not taxed in India.
- Nro account can be jointly opened with an Indian resident.
Foreign currency non resident account.
- Unlike the other two NRI account foreign currency non resident account are maintained in foreign currency.
- Income on on these accounts are taxed in India.
- This kind of account are open to manage and international currency which is in the form of term deposit and can be withdrawn after the maturity period only.
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