Complete guide of Bank account in INDIA
Types of
Bank account in INDIA
Dear Friends,
There are multiple types of accounts provided by bank which
caters to the various needs of the customers. Today we will go through the details
and features of such accounts.
1.
Savings
Account:
·
This is the most common type of bank account. It
is the sophisticated form of the Piggy bank which we all would have used in our
childhood. Savings account allows us to withdraw or deposit money multiple
times. There are some added facilities like ATM card, Cheque books, Withdrawal
forms which help us to do monetary transactions. There are limited numbers of
transactions available in savings account.
·
Savings account is generally used to keep our
money in a bank. It earns us an interest of 4-6% per year. Most PSU banks give 4% interest but some
private players have made the market better for customers by giving 6 to 7%
interest (based on some conditions).
·
Most banks keep a minimum amount limit which
must always be maintained in account else the customer needs to pay some
penalty.
·
Savings account can be opened individually or
jointly with a partner.
Some
sub-varieties of Savings account
A.
Salary
account: This is a variety of Savings account where the monthly salary of a
person is getting credited to a Savings account and if the bank and the company
have some tie-up then the person will be entitled to some benefits like lower
home loan rate, lower or no NEFT / RTGS/ IMPS charges.
B.
No Frills
account: In No frills account the minimum balance requirement is not there.
There is no penalty levied on customer even if the amount in account becomes
Zero.
C.
Sweep-in
account: This is the best form of Savings account which provides the
liquidity of Savings account and returns of a fixed deposit. In this type of account,
User can select the maximum amount that he/she wish to keep in Savings account
and move the surplus amount in automatic Fixed deposits. User is given the
option to choose the tenure for which the FD needs to be created. Once user
provides all this input, the surplus balance is converted to FD. But the best
thing is, whenever user need the money he can readily withdraw the amount
without waiting for the FD to break in a day or two.
2. Current Account:
·
Current account is not meant for savings. It is
used to park money for short term.
·
It is mostly used by businessmen or Firms.
·
There are no restrictions on the number of
transactions done through these accounts.
·
Generally, No interest is paid for parking money
in Current account. Rather the bank charges some Annual fee for maintaining the
Current account.
·
Cheque book facility is available for current account
also.
3. Recurring deposit: (RD)
·
Recurring deposit are small saving account where
we need to put a fixed amount monthly and earn interest on the deposited
amount.
·
Banks usually provide the time duration from 6
months to 10 years to serve a RD.
·
Minimum amount which need to be deposited in a
RD is Rs. 100 and its multiples thereafter.
·
Now, some banks give the option of flexible RD
also where we can add some amount as per our wish on top of the monthly fixed
amount that we deposit. One such example is iWish account facility provided by
ICICI bank.
·
Interest earned in RD is from 4 to 8%
4. Fixed deposit: (FD)
·
Fixed deposits are the deposit accounts used by
customers to lock their money for “fixed” time duration. This money deposited
earns interest in tune of 4 to 8%.
·
This is one of the favorite saving options of
Indian household. Simple and easy to use.
·
If user wish to take out the money before the
fixed duration is over, then he needs to pay a penalty of 1% to withdraw the
money.
5. Demat Account:
·
This account is used to keep the Shares of a
company in dematerialized form. This account is not used to keep any direct
money.
·
If a user wishes to do trading in share market
he needs Demat account to buy and sell shares. He just needs to provide the
information to his broker about his Demat account.
·
There are various charges associated with Demat
account like Account opening fee, Annual maintenance Charges, Transaction
charges etc.
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